Unemployment, income inequality, and a host of other economic challenges have all been blamed on the so-called “skills gap.” But addressing this gap requires first correcting a fundamental misdiagnosis of the problem that has plagued so-called “low-skill” workers.
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This misconception is not new. It has existed for years – and it was the impetus behind The Words of the Workforce, a new field guide aimed at “shed[ding] light on the way that critical terms are (and are not) used, so that journalists, analysts, and advocates can move toward a shared lexicon for an increasingly critical issue in the national discourse.” After all, as Ashley Putnam, director of the Federal Reserve’s Economic Growth & Mobility Project, observed: “Terms shape our policy decisions. When we frame job seekers as low-skill, we seek to address the skills gap without addressing the larger opportunity gap. Our terms are often informed by our biases, and thus limit solutions.”
Putnam is one of the hundreds of workforce leaders that joined Opportunity@Work and partner organizations in a recent Twitter chat – which generated 33.6 million potential impressions and more than 1,100 Tweets from 190 contributors – to #TalkAboutWork and shed light on how inaccurate terms can have damaging impacts on workers, employers, and the economy as a whole.
This misconception – that “low wage” is synonymous with “low skill” – unfairly devalues workers, making “low wage” a self-fulfilling prophecy and perpetuating inequality. It exacerbates racial and economic inequalities, since Black, Hispanic, and rural American workers are disproportionately likely to face unwarranted “low wage” bias. But it also means that many of the employers currently seeking 10.9 million workers are looking in the wrong place — and many of the skills they seek are available in the population of roughly 9 million job-seekers right in front of them.
Our analysis of more than 130 million job transitions shows that skills are the currency of the labor market, in that there’s a clear relationship between the skills a worker possesses and the job transitions they make. The shorter the “skills distance” between one job and another, the more likely a worker will be able to navigate the transition successfully.
The trouble is that, according to our report, Navigating with the STARs, workers who are Skilled Through Alternative Routes (or STARs), rather than through a bachelor’s degree, are not able to leverage their skills the way their peers with four-year degrees do.
Consider LaShana Lewis, who was repeatedly denied opportunities to make the move from customer service to software engineering — and missed out on opportunities to prove her considerable technical skills during the hiring process — solely because she lacked a degree. It was only after participating in LaunchCode’s CoderGirl talent development program that LaShana was able to gain recognition for her skills, make the leap to software engineer, start her own business, and even file a patent of her own.
Stories like LaShana’s illustrate how the opportunity gap can bend STARs’ career trajectories, leaving them behind in terms of opportunities as well as wage growth — and undermining prevailing ideas and assumptions about upward economic mobility.
Far from being an isolated phenomenon, our findings show that this “opportunity gap” is pervasive — and has played a role in shaping our economy, and fueling inequality between STARs and degree-holders, for at least the past four decades.
According to a new NBER working paper by researchers from Harvard University, the University of Michigan, and Opportunity@Work, STARs “need 30 years of work experience to earn as much as their peers with a four-year degree earned right out of college.” Which illuminates why the “low wage/low skill” misconception is so pernicious: because it reflects a bias on the part of employers “that the most important years of work-related skill development are the four years of college — not the 12 years of school before college nor the 30 to 40 years of learning on the job during a worker’s career in the labor force.”
The findings show this is simply not the case. Not all STARs have the same level of skills, but even Forming STARs have skills that enable upward mobility. Workers at every stage of their careers learn transferable skills through experience and on-the-job training — and these skills often have considerable overlap with the skills required for higher-wage roles.
The bias that equates low wage with low skill, and therefore low value, contributes to an unnecessarily steep climb for STARs – and also keeps employers blind to the talent they desperately need. This not only limits career opportunities and wage growth potential for individuals; it has a significant and systemic impact on the U.S. economy. For example, the computer and information technology sector — one ripe with job opportunities for STARs — is projected to grow 11% between 2019 and 2029. Yet, for every individual day an IT job remains vacant, the average organization can expect to lose more than $400.
Part of the solution lies with the more than 70 million STARs working today. They represent more than half of the active U.S. workforce, including more than two-thirds of the essential workers who have kept America’s economy going during the COVID-19 pandemic. Opening new pathways to upward mobility for STARs will both unleash the potential of workers like LaShana and better enable businesses — like those facing costly shortages of IT workers — to put their considerable skills to use.
Closing the opportunity gap will depend upon a wide range of factors, policies, and practices. But it starts with getting the language right, and employers in particular (with resources like our new field guide to assist them) must take a leadership role. Rethinking the perceived “skills gap” — by casting the real problem in clearer terms, as the opportunity gap it is — would be an important step in the right direction.
