Gauging the Education and Training Demands of Minnesota Jobs

by Dave Senf - david.senf@state.mn.us
September 2011
 

The Minnesota Department of Employment and Economic Development (DEED) biennially releases long-term employment projections that attempt to project what Minnesota’s job picture will look like 10 years down the road. Minnesota’s long-term employment projections start with U.S. long-term employment projections developed by the U.S. Bureau of Labor Statistics (BLS).[1]  The national projections are customized to the state’s industrial and occupational mix and to economic trends in Minnesota that differ from national trends. When DEED releases updated projections the first question asked is: “What occupations are projected to grow the fastest?”  The second question asked is: “What are the education and training requirements of projected employment growth?”

The answer to the education and training question has been debated on and off since BLS first started looking at future job prospects more than 60 years ago to help World War II veterans find work. The debate flared up again in the mid-1990s when BLS began to publish education and training requirements at the detailed occupation level using an 11-category system of education and training requirements. The system assigns each occupation the educational or training category that best describes the background that most workers need to become fully qualified for the occupation.

The categories range from short-term on-the-job training to professional degree. Five of the categories require a bachelor’s degree or higher:

• Professional degree
• Doctoral degree
• Master’s degree
• Bachelor’s or higher degree plus work experience
• Bachelor’s degree

Two of the categories involve some college or postsecondary work:

• Associate degree
• Postsecondary vocational award

Four categories are assumed to require high school graduation or less educational background:

• Work experience in a related occupation
• Long-term on-the-job training
• Moderate-term on-the-job training
• Short-term on-the-job training

The 11-category system produces projections of education and training requirements that have in the past and continue to be criticized as sharply underestimating the future demand for postsecondary education. The latest challenge to BLS’s 11-category method is the Help Wanted study published by Georgetown University researchers last year.[2] 

The Georgetown study faults BLS’s 11-category method for assigning all employment in an occupation to a single category. Survey data from the Current Population Survey (CPS) and American Community Survey (ACS) show that for many occupations workers have varied education backgrounds. The end result is that when education and training requirements are summed across all occupations, the 11-category method projects significantly less demand for postsecondary and higher education than when an alternative method, based on educational attainment data, is used to project future educational and training needs. The Georgetown study uses the educational attainment method with two related results. First, it does a better job at accounting for the upskilling evident within occupations. Second, it leads to higher projected demand for workers with postsecondary education than the BLS method.

Figure 1 summarizes the ongoing education and training requirements debate by comparing education and training levels for Minnesota’s 2.8 million jobs in 2009 using the two different methods. DEED has been publishing education and training projections since the mid-1990s utilizing the BLS 11-category method customized to reflect the education and training environment in Minnesota’s job market more accurately.[3]  

The Minnesota-customized 11-category system raises the education and training requirements of Minnesota’s jobs relative to the national system by accounting for occupations in Minnesota that clearly require more education or training than in the BLS system. For example, the national requirement for police and sheriffs’ patrol officer training is long-term on-the-job training. In Minnesota the most significant single source of education or training for newly hired police and sheriffs’ patrol officers is an associate degree. 

Minnesota’s 11-category method also assigns two or more categories to roughly one-fifth of the occupations while the national system limits each occupation to only one category.  Many occupations have more than one possible source of education or training that qualifies workers for the job. Assigning occupations multiple education and training pathways better matches the actual education and training backgrounds of individuals employed in the various occupations. For example, the national system identifies an associate degree as the background required for computer support specialists. In the Minnesota-customized system computer support specialist jobs are split between bachelor’s degree (25 percent), associate degree (50 percent) and postsecondary certificate (25 percent).

DEED also followed BLS’s lead in the mid-2000s when BLS, responding to criticism of their 11-category system, developed a second education and training classification system, the educational attainment cluster system. The educational attainment system, like the Georgetown method, utilized educational attainment data first from the Current Population Survey (CPS) and later from the American Community Survey (ACS). Figure 2 compares the 2009 workforce education and training requirements estimated by the Minnesota-customized category system to actual 2009 workforce attainment as reported for Minnesota workers in the ACS data.[4]

There is significant difference between the two methods with the education attainment method showing much higher education levels than the 11-category system suggests.  Under the education attainment data 64 percent of the 2009 jobs were held by workers with  postsecondary education (postsecondary certificate, some college, associate degree, bachelor’s or higher degree) yet only 46.2 percent of the 2.8 million jobs required postsecondary education according to the Minnesota-customized category system.

Evaluation of the education and training required for future jobs is challenging for a number of reasons. For many occupations there is more than one way to qualify for the job, as evidenced by the mix of actual education attainment revealed in the ACS data. 

Predicting future education and training needs is further complicated by upskilling and over-credentialed/under-employed issues. The upskilling issue revolves around education and training requirements for an occupation increasing over time. The Georgetown study uses changes in the education and training background of auto mechanics over time as an example of upskilling that the study claims is constantly boosting demand for more educated workers. In the late 1960s, 40 percent of auto mechanics had either a high school degree or some postsecondary education. That percentage increased to 77 percent by the mid-2000s as autos became more sophisticated, requiring auto mechanics to upgrade their training beyond just on-the-job training.

The over-credentialed/under-employed issue centers on the education or training necessary to be fully qualified for an occupation as opposed to the actual education or training background held by workers in an occupation. The training required for waitresses and waiters under the 11-category system is short-term on-the-job training, but according to ACS data 52.4 percent of waitresses and waiters in Minnesota have post-secondary education or more, including 8.3 percent with a bachelor’s degree or higher. 

There are 119 occupations in Minnesota that, like waitresses and waiters, require only short-term on-the-job training for workers to be fully qualified. Roughly 825,000 jobs existed in Minnesota in these occupations in 2009 accounting for 29 percent of the state’s job base. From ACS education attainment data 45 percent of the workers in these occupations had at least postsecondary education backgrounds. These occupations are projected to account for 17 percent of job growth (48,000 jobs) over the next 10 years. 

Under the education attainment method, 45 percent or about 22,000 workers with postsecondary education will be needed to fill the openings. Those 22,000 workers account for roughly 11 percent of the 200,000 job growth openings requiring postsecondary training projected under the education attainment method. No workers with postsecondary training will be required to fill the 48,000 job growth openings projected in these 119 occupations under the 11-category method.  

There is no simple answer to the question “What education and training will be needed for future jobs?” because of these and other issues. The Georgetown study has been criticized for inflating demand for postsecondary workers primarily by defining the postsecondary labor market as equal to the total number of employed workers with postsecondary education rather than the total number of jobs in occupations that actually require workers to have postsecondary education.[5] Neither method does a good job of projecting how education and training requirements of specific occupations might change over time from changes in technology and other factors.

DEED has in the past published education and training requirements for projected job growth using both the Minnesota-customized 11-category system and the education attainment system.[6] Figure 2 does the same for the 277,500 job openings projected to be created by job growth between 2009 and 2019. Net job growth is expected to be 246,000 as 31,500 jobs spread across 192 occupations are expected to be lost.

The two methods have in the past been advertised as providing a low and high estimate of the mix of educational and training background needed by workers to fill Minnesota’s jobs of the future. That really isn’t what the two methods provide. The 11-category method provides projections of the education and training backgrounds needed by workers to carry out the new jobs. The education attainment method provides projections of the education and training backgrounds of the workers who will actually fill the new jobs. About 70 percent of the workers who fill the new jobs will have postsecondary education even though only 56 percent of the new jobs in reality need workers with postsecondary education to fill the jobs successfully.

Education and training requirements for workers filling the job openings created by job growth is only part of the story on future education and training needs. New entrants to the workforce will be needed to fill the net replacement openings that will be created over the next 10 years as workers retire or leave the workforce for other reasons. About 640,000 net replacement openings are projected over the next decade. The mix of education and training background for the workers needed to fill the net replacement openings are displayed in Figure 3 along with the education and training mix for 2009 employment, job growth openings, and 2019 employment. 

The education and training requirements of net replacement jobs are less than those required for job growth openings under both methods. Job growth will be occurring in a mix of occupations that require more education and training than the mix of occupations with net replacement openings. The net effect over the 10 years however is a slightly better educated workforce in Minnesota in 2019. Under the education attainment method, the percent of jobholders with post secondary or higher backgrounds increases from 64 to 64.7 percent. Under the 11-category system, jobs that require postsecondary education increase from 46.2 percent to 47.2 percent over the next 10 years.

The Georgetown study ranks Minnesota’s postsecondary education intensity as second highest behind only Washington D.C. by 2018, projecting that 68.8 percent of all jobs in Minnesota in 2018 will require postsecondary or higher education.[7] That is up from the study’s estimate that 67.8 percent of all Minnesota jobs in 2008 required postsecondary or higher education. Minnesota’s one percentage increase in postsecondary education in the Georgetown study is about the same jump as predicted by both the 11-category and education methods.

Minnesota’s higher postsecondary education projections in the Georgetown study can be traced to the use of CPS data as opposed to ACS data and to the practice of forecasting future occupational education and training requirements. Occupational education and training requirements stay constant in the 11-category and education attainment methods, whereas the Georgetown study uses the last two decades of CPS educational attainment data to forecast education  requirements 10 years into the future,  in an attempt to capture future upskilling trends. 
 

[1]U.S. 2008 – 2018 projections are available at www.bls.gov/emp/.  2010-2020 projections will be published in February 2012.  Minnesota’s 2009 – 2019 projections are at www.positivelyminnesota.com/apps/lmi/projections

[2]The Help Wanted study published in June 2010 is available at http://cew.georgetown.edu/jobs2018/.

[3]Education and training requirements for about 170 occupations or 22 percent of the 774 occupations were modified for Minnesota based on input from researchers at the Minnesota Department of Employment and Economic Development (DEED) and Minnesota State Colleges and Universities (MnSCU) system.

[4]The education attainment data is the 2007-2009 three-year average ACS data for Minnesota. Education attainment data by occupation is applied to 2009 base employment.

[5]See “College Labor Shortages in 2018?”, The New England Journal of Higher Education, November, 2010, www.nebhe.org/thejournal/college-labor-shortages-in-2018/#high_1.

[6]See “Methods of Estimating Education and Training Requirements of Growing Occupations,” Minnesota Economic Trends, November 2005.

[7]Percentages in the Georgetown study’s presented in graphs and bullet points differ slightly from actual percentages derived from the study’s tables.

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