2020 Occupational Outlook Shows Some Surprises

By: George Erickcek, W.E. Upjohn Institute for Employment Research

In a previous blog, I reported that forecasters at the Bureau of Labor Statistics (BLS) see little change in the demand for skilled workers during the next 10 years. Just as today, they predict that 26 percent of the jobs in 2020 will be filled by high school dropouts and more than 40 percent will require no more than a high school diploma. These projections run counter both to other recent studies and to the view of most workforce specialists.

One study that has gained broad attention was released by the Center on Education and the Workforce at Georgetown University in June of 2010. In their report, Help Wanted: Projections of Jobs and Education Requirements through 2018, Anthony P. Carnevale, Nicole Smith, and Jeff Strohl predict that 63 percent of the jobs in 2018 will require postsecondary training completion. This is in sharp contrast to the 32 percent predicted in 2020 by the BLS. Thus, the three researchers claim that the nation will be facing a severe labor shortage of college-educated workers in the future.

Carnevale, Smith, and Strohl argue that the BLS has historically underestimated employers’ demand for workers with postsecondary training and will continue to do so for two reasons:

  • The BLS’s forecast holds the education level within occupations constant, which does not reflect the dynamic changes that will occur as businesses demand greater skills for workers in nearly all occupations. 
  • The BLS determines the educational demand for each occupation by examining recent evidence on the level of education or training required for these occupations, and not by the educational attainment of the current job holders.

 Not so fast, say Northeastern University economists Paul E. Harrington and Andrew M. Sum in College Labor Shortages in 2018?, a November 2010 article in the New England Journal of Higher Education. They argue that it is the Georgetown researchers who got it wrong, because they did not consider the fact that many college graduates could be woefully underemployed, working at jobs that do not require their level of training. The Georgetown study, they claim, mistakenly uses the number of college graduates in each occupation as an indicator of skill demand, when for lower-skilled occupations it should be seen as a sign of underemployment. So, in the example used in their report, Harrington and Sum argue that BLS analysts would not include bartenders as an occupation requiring a bachelor’s degree because the skills and training required for the position do not require a BA; however, the Georgetown researchers would because there are a substantial number of bachelor-degreed bartenders.

In an argument this interesting — and, I would say, important — others have quickly weighed in. David Neumark, Hans Johnson, and Marisol Cuellar Mejia, in their August 2011 article “Future Skill Shortages in the U.S. Economy? Sorting Out the Evidence,” suggest that the congestion in the labor market will clear. They believe that the demand for highly educated workers will rise at a rate that is greater than the BLS projects; however, they also see that this increase in demand will be adequately met by the rising education level of future and current workers.

George Erickcek can be reached at Erickcek@upjohn.org. Originally posted March 14, 2012 on the Upjohn Institute blog.