A matter of degrees

HR Magazine, Jan, 2006 by Jennifer Schramm

Although the United States has the highest proportion of workers over age 40 with a college degree, it may lose that edge in coming years to nations that are showing faster growth in educational attainment.

Such a trend should be a warning sign for employers. Some economists maintain that industrialized nations' economic competitiveness is tied to the percentage of workers with university degrees. The United States can ill afford a slowdown in academic achievement just when it needs an increasingly educated workforce to sustain its leadership in a competitive global economy.

In a recent report, the National Center for Public Policy and Higher Education, based in San Jose, Calif., said gaps between the percentages of minority groups and the percentages of whites with bachelor's degrees have been widening over the past 20 years.

The organization found that the U.S. population groups with the lowest levels of education are also those with the highest growth rates. This means that if current demographic and education trends continue, the proportion of workers without a high school diploma will increase in almost all states, according to the report. And if levels of U.S. educational attainment begin to slip, so will Americans' personal income.

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Since failure to complete high school is an obstacle to earning a college degree, strategies to improve the education levels of U.S. workers are likely to include efforts to help at-risk young people earn a high school diploma.

But lack of a high school diploma is only one of the barriers to a college education. For almost all young Americans, another major obstacle is the rising cost of higher education--up an astonishing 63 percent at public institutions and 47 percent at private colleges in the past decade and a half, according to a recent Business Week report.

Higher-education costs have had major implications for the career, financial and personal decisions of an entire generation. A study by the student lending institution Nellie Mae found that 55 percent of all student loan borrowers feel hampered by debt in some way and that student debt is increasingly leading young people to change career plans, delay marriage, postpone having children and put off buying a home.

In addition, student debt may influence the nation's competitiveness by discouraging young people from obtaining advanced degrees. A lack of advanced-degree holders appears to be especially critical in mathematics, science and engineering.

If more young people forgo obtaining higher-level degrees to avoid the burden of debt, there could be a significant impact on the kinds of research and innovation that lead to economic competitiveness. Employers may increasingly see the results of these education trends in the quality of their workforce and, conversely, in that of their global competitors.

JENNIFER SCHRAMM IS MANAGER OF THE WORKPLACE TRENDS AND FORECASTING PROGRAM AT SHRM.

Online Resources

For more information on emerging issues, visit www.shrm.org/trends.