COVID-19: A Chance to Build A STARs Powered Economy
Opportunity@Work has spent the last five years thinking about our labor market. Like many who have studied labor trends, we found that even during a period of strong economic growth, the economy was not working for the majority of workers.
Wages remained stagnant, many workers were shut out of economic mobility and the younger generations of the workforce became the first to be financially worse off than their parents. The economy was also not working for many companies: productivity grew at a snail’s pace, the war for talent intensified and employers collectively complained that there were not enough skilled employees to carry their companies into the future. If we hope to rebuild our economy for the future of work, we must see its current shortcomings with clear eyes.
Take, for example, Pam Ramsey, a home health aide in Pennsylvania, profiled by the New York Times. She originally graduated from trade school as a mechanic, but soon had to give that career path up to take care of an injured father. She’s been taking care of people ever since. Her skills are essential to the community — especially during a health crisis that is so damaging to the elderly — but she is paid little more than minimum wage and has limited options for upward mobility. She even struggles to get the basic protections needed to do her job and is forced to rely on whatever supplies she can find in the local dollar store.
The shocks experienced by this new crisis are unprecedented, but they are exacerbated by economic challenges that already existed. Before the pandemic, the economy was not working for most people, especially those without a 4-year college degree. The BLS finds that, between 2008 and 2017, the time period from the last economic crisis through recovery, 74% of new jobs required a 4-year degree, while 60% of the workforce did not have a degree. This meant that 60% of the workforce had access to only 26% of new jobs. A return to such hiring practices would be counterproductive to economic growth as the challenges employers faced during the last economic crisis will reappear with this one. But more importantly, it will be unfair to workers. We owe more to the essential workers who risk their lives during this time, and we can do better by the tens of millions of workers who have already experienced decades of wage decline and are now out of a job. Simply put, a recovery that undervalues the majority of the workforce is not a sustainable recovery for anyone.
We can’t go back to “normal.” Instead, we now have a chance to rehabilitate the labor market to be healthier, stronger and more equitable than before, creating an economy that works better for more people.
All workers deserve a labor market that provides stability and upward mobility, including those workers without college degrees. In March, Opportunity@Work published our landmark work on STARs, the 71 million workers in the U.S. labor market who are Skilled Through Alternative Routes. Our analysis (seen in Figure 1) revealed that 30 million STARs have valuable skills, honed on the job, that would allow them to earn an average of 70% more if unnecessary barriers to those jobs were removed. Thirty-six million more have skills that would put them on a path to higher wages with appropriate training.
Valuing STARs will not only improve the lives of tens of millions of workers, but it will also make it easier for employers to recover and develop during this crisis, growing the pool of skilled talent they can put to work as they make plans for their future. As we move towards recovery, we must ensure we have an economy that values the skills and experiences of every worker, regardless of where or how they’ve gotten them.
Throughout this crisis, Opportunity@Work plans to share data, insights and stories about how we can use this moment to build a stronger, more resilient and inclusive economy, powered by work from our STARs Insights Initiative and our partners across the workforce development, corporate and academic fields. This blog series will highlight research and offer our perspective on what an equitable recovery looks like for workers like Pam, and quite frankly, all workers in America. We won’t pretend to have all the answers, but our blog series will ask hard questions and present data and analyses in this fast-changing conversation. We seek to engage with and learn from others who also envision an equitable post-crisis labor market.
This blog post was written by Martin Evelyn, Insights Manager at Opportunity@Work as part of the new STARlight Blog Series.
The STARlight Blog Series shares data, insights and stories, from Opportunity@Work research as well as the research of others in the field, to shed light on barriers to and opportunities for economic mobility for STARs.
