What Emerging Knowledge Economy?

It's not uncommon for many college education and STEM advocates to claim that the fastest growing occupations over the next decade will require a college education and/or STEM skills. In this view, the economy is shedding low skill jobs (either from automation or trade) and America is specializing in high-wage, knowledge-based jobs that require a college degree.

But if we are to have a really objective and productive debate about education policy, it's important to base it on reality not wishful thinking. And the reality is that when measured in terms of absolute growth (not percentage change) in job openings between 2010 and 2020, none of the top fastest growing occupations even require a bachelor's degree, and six of them don't even require a high school degree. And collectively these jobs make up more than 20 percent of the expected job openings by 2020 and pay median wages of just $26,150 per year. This by the way, goes a long way in explaining stagnant U.S. wages. The figure below from the U.S. Bureau of Labor Statistics shows these.

These knowledge economy advocates make their case by looking at occupations that have the highest rate of growth (not absolute growth). But if you are worker in 2020 you don't really care if some occupation doubled, if it only added 1,000 jobs; you care about absolute job growth. But even using percentage growth, of the top ten fastest growing occupations in percentage terms, only two require a college degree, and one of these is event planners. (The other is the only real STEM occupation, on the list, biomedical engineers). The fastest growing occupation is actually home health aides, which require someone to have gone to high school, but not completed it.

So does this mean that focus on STEM and college is wrong. Yes and no. The focus on everyone getting a college degree clearly is wrong. With so many jobs of the future requiring no college whatsoever, encouraging everyone to go to college is clearly inefficient from a societal perspective because there will still be the same number of jobs requiring less than a high school degree. Whether or not to go to college is largely a choice based on how lucky one feels that they can beat the odds of being able to find a job that requires a college degree.

How about STEM? As ITIF has shown, very few (around 6 percent) of the U.S. workforce are STEM workers (scientists, engineers, and mathematicians). The reality is that the vast share of American students do not need to know physics, calculus or quadratic equations, despite where the emerging Common Core Standards movement is heading. Nor do we need a "Some STEM for All" strategy that just ends up forcing lots of high school students with no interest in STEM to suffer through four years of math and science (if they are lucky enough to stick with it and actually not drop out first). What we need is an "All STEM for Some" strategy that creates a great educational environment (like more specialty math and science high schools) for the students who are really interested in STEM. And because we are not doing this we actually do have a STEM worker shortage, despite what some skeptics would assert. And that shortage is holding back U.S. innovation, productivity and competitiveness.

For the other fast growing jobs that pay so little, it's time to consider policies for them, such as an increase in the minimum wage, policies to help companies implement high-performance work systems that can support higher wages, and active policies to figure out how to automate some of these low wage jobs.

So let's have a discussion of college and STEM based on the facts, not on wishful thinking. If we don't, getting the policy right will be extremely difficult. But starting with facts, at least increases the odds that we might get the policy right.