Not All Boats: Why Hispanic STARs Get Left Behind — and How Employers Can Change That
Six decades ago, a speechwriter to then-Senator John F. Kennedy borrowed a slogan from a regional Chamber of Commerce in New England: “a rising tide lifts all boats.” Since then, this aphorism has passed into political cliche — and has been adopted, and coopted, by policymakers on all sides of the public conversation.
The trouble is that, no matter one’s policy agenda or political persuasion, the underlying assumption — that “a rising tide” does, in fact, lift all boats — could hardly be further from the truth. And when the economic tide is ebbing, rather than rising — as during the COVID-19 pandemic — disparities aren’t erased, but significantly exacerbated.
Some boats rise, others fall. Still others run aground.
For instance, the economic fallout from COVID-19 has had a disproportionate impact on Hispanic workers throughout the U.S. labor force. While the average U.S. unemployment rate peaked at just under 15% in April 2020, at the height of pandemic-related shutdowns, the unemployment rate among Hispanic workers soared to nearly 19% that same month — and has stubbornly continued to exceed the national average by nearly two points ever since.
Our new research shows that a crucial subset of this population — Hispanic workers who are Skilled Through Alternate Route (STARs), rather than through a college degree — face unique and particularly acute challenges in this moment. What’s more, it suggests that employers are an essential part of the solution.
According to our findings, 80% of Hispanic workers — including the 13.5 million Hispanic STARs — are screened out of the U.S. labor force by four-year degree requirements. Yet, in nearly one in four of the higher-wage, skills-based job transitions that should be available to Hispanic STARs, employers nevertheless rely on a four-year degree as a proxy for skills.
Our new analysis further indicates that these degree requirements are often wholly unwarranted, as many low- and middle-wage jobs provide on-the-job skills that are directly transferable to higher-wage work. Consider the approximately 114,000 Hispanic STARs currently working as food and hospitality service managers. They have the skills to transition to similar-skilled jobs — as community and social services managers — where the median wage is nearly 50% higher. But employers typically require a degree for these positions, freezing out a significant (and in many ways ideally-qualified) subset of the population.
And they are far from unique. A similar dynamic plays out across occupations and economic sectors. For instance, we commonly see transitions from jobs like customer service representative or front-line sales supervisor to higher wage roles in sales or management — but these latter transitions are among those so often hindered by degree requirements.
In professions where workers face fewer artificial barriers, there is ample evidence that mobility is possible without a degree. Particularly in the trades,we see a large number of successful transitions to higher-wage jobs: the construction laborer who becomes an insulation worker, for instance, and reaps (on average) a 16% wage gain.
Just imagine the wage gains Hispanic STARs might experience if we remove these obstacles, enabling the same level of mobility we see in the trades throughout the broader labor market.
Fortunately — whether the tide is rising or falling — measuring its disparate impacts on different segments of the labor force does more than enhance our understanding of the problem. It can also illuminate potential solutions, including specific actions that employers can take.
For example, our research suggests that removing superfluous degree requirements could have a significant impact, opening pathways to opportunity for the nearly one in four Hispanic STARs who have the skills needed for upward mobility — but are unnecessarily frozen out. And the upside is huge, as it would enable those Hispanic STARs to transition into similarly-skilled jobs where the median wage is a staggering 62% higher.
Contrary to political cliche and conventional wisdom, not all boats rise and fall together. And of course removing degree requirements would not be a panacea, but the first of many important steps.
Still, it represents one direct action employers can take to help open pathways, and unleash potential, for an essential but critically undervalued share of the workforce — and better enable Hispanic STARs to take advantage of a rising economic tide.
This blog post was written by Ashley Edwards, Senior Manager of Insights at Opportunity@Work
