By Harry J. Holzer

Jun 6, 2018

Workers without college degrees in America — especially men — have suffered worsening employment outcomes for years. Adjusting for inflation, their wages have stagnated at best or even declined over time. Millions have withdrawn from the labor force altogether. As their job prospects dwindle, so do their prospects of joining the middle class and achieving the American Dream.

Job outcomes are often worst for those residing in regions that have lost the manufacturing jobs that once enabled non-college workers to comfortably join the middle class. Many former workers face personal barriers to work, such as opioid dependencies or criminal records. And too many have gone on Disability Insurance and permanently stopped working when their job prospects have deteriorated.

What can we do to help such workers improve their job prospects and join the middle class? We need a two-pronged approach: one that helps workers raise their skills and educational credentials while also inducing employers to create better jobs.

To start, most will need some kind of postsecondary education credential that the labor market values. These do not have to be bachelor’s degrees. A range of associate degrees or certificates in high-demand fields like health care, advanced manufacturing, information technology, transportation, and logistics can boost worker earnings and enjoy strong rewards in the labor market, especially when employers are searching for people to fill jobs. Workers can earn these credentials at community and technical colleges or in apprenticeships with employers.

Unfortunately, too many students enroll in community colleges today without completing a credential. Many need stronger support services, including career counseling and stronger guidance on their academic path. Remedial classes and financial aid systems need reform. The institutions they attend need more funding, but should also face stronger accountability based on later student employment — which would hopefully encourage colleges to better tailor their curriculum to the needs of the local economy.

Companies are also part of the solution. Today, too many employers are lowering the quality of jobs by turning their workers into independent contractors, in whom they feel no need to invest in skill-building. Firms increasingly add non-compete or non-disclosure clauses to their worker contracts, choking off their workers’ ability to improve their job prospects with important information and potentially other offers. Unstable work hours in retail or restaurants make it difficult for workers to put in sufficient hours while also caring for their families. And even blatant wage theft by employers seems to be on the rise.

But such practices are not necessary to make firms competitive and profitable. Employers can often succeed by taking the “high road” in employment practices, competing by retaining workers and boosting productivity rather than just paying workers as little as possible. But they may need some public prodding to go that route, with financial incentives and technical assistance from governments at all levels.

How would this work? Public officials should proclaim their commitment to the creation of high-quality jobs. They can reward firms that create apprenticeships and strong career pathways or engage in profit-sharing, through tax credits or economic development grants; they can grant preferences for such firms in contract procurement; and they can provide technical assistance to help firms change their business practices. At the same time, some stricter regulations will help reinforce this message by limiting the use of non-compete clauses, by moderately raising the minimum wage (though not to levels that might destroy jobs), and by strengthening worker rights to organize and collectively bargain.

Of course, some workers and regions will need more help. Targeting federal economic development dollars to distressed regions, through job subsidies and infrastructure projects, will help such areas rebuild their local labor markets. Combating opioid dependency through both prevention and treatment is essential; and helping workers who have been incarcerated make the transition back to work and independent living is key as well. Finally, we will need a system of lifelong learning for workers at risk of being displaced by automation, seeking new training to upgrade their skills and perhaps change careers.

But a strategy broadly centered on improving both worker skills and employer job quality will have the greatest likelihood of improving job prospects for millions of U.S. workers. After all, everyone deserves a shot to join the middle class and achieve the American Dream.