Americans without college degrees are struggling the most in this economy

What Morris is experiencing in her job search is playing out across the country. Hiring has rebounded quickly for Americans with college degrees. In recent months, there’s been a noticeable surge in people with two-year associate’s degrees getting back into the workforce, but Americans with only a high school diploma or less remain deep in crisis mode, even as employers claim they are having trouble finding workers.

Nearly 4 million adult workers without college degrees have not found work again after losing their jobs in the pandemic. Only 199,000 adult workers with a bachelor’s degree or higher are in the same situation. (About 2.4 million adults over 25 with associate’s degrees had a job in February 2020 and have not returned to work a year later).

Economists are especially concerned about the sharply divergent situation for college-educated workers versus non-college educated since October. Even as more and more restaurants, hotels and other service sector businesses have re-opened, hiring has continued to backslide for non-college educated workers.

In March, for example, the overall economy added back 916,000 jobs. Only 7,000 went to workers with high school diplomas but no college degree.

“There really is an educational divide in the jobs that are coming back now,” said Diane Swonk, chief economist at Grant Thornton. “Women are coming back into the labor force, but it’s the higher-skilled jobs that are coming back for women.”

This looks increasingly like a two-track recovery. There’s a fast track for the college-educated and a largely slow track for the non-college educated, which only compounds the pain among lower-skilled workers who suffered the most job losses early on in the pandemic as well.

Some analysts suggest it’s time to start talking about the “No-college-degree” recession.

“A lot of people have been calling this the SHE-session, but it’s really the She-minority-less-than-a-bachelor’s-degree recession,” said Michael Horrigan, president of the W.E. Upjohn Institute for Employment Research.

Horrigan’s research has shown that both minority females without college degrees and white males without college degrees are having the hardest time finding work again.

For decades, men without college degrees have struggled as blue-collar jobs went away, leaving fewer opportunities for low-skilled men to make it in the modern economy. Now the pandemic has thrust millions of women into the same situation.

As low-skilled service sector jobs evaporated in restaurants, malls, hair salons, spas, and home health care, women without college degrees are struggling to figure out their next steps. Many are growing frustrated, and the concern is they will simply stop looking for work.

The numbers are striking. After the Great Recession, the share of adult workers with a high school degree who were employed or looking for work hit a low point of 56.9 percent at the end of 2015. This March, only 54.9 percent of workers with a high school diploma were employed or looking for work, raising concerns about whether these workers will recover to even 2015 levels, let alone the 58.3 percent who were in the labor force in February 2020 just before the pandemic struck widely.

“We have to figure out a way to generate employment gains for lower-educated and low-skilled workers, who typically are the slowest to recover,” said Michael Madowitz, an economist at the Center for American Progress, a Democratic think tank.

Some economists think it’s only a matter of time before companies start hiring these workers again. And the Biden administration is pitching its infrastructure plan as a job creator with special funding for re-training workers and boosting Rust Belt communities.

But there’s an eerie similarity to what’s happening at this point in the 2021 recovery with high-school educated workers struggling and what happened in the years after the Great Recession when men without college degrees had some of the hardest time finding work again. Many men after the Great Recession ended up so discouraged that they turned to alcohol, drugs and suicide, what became known as “deaths of despair.”

The problem for policymakers, Madowitz says, is there’s been a lot of thinking in the past decade about how to help men in blue-collar industries, but there’s been little thinking about how to help women in the service sector who suddenly might need to change careers.

“We need to re-skill people for manufacturing jobs of tomorrow, but we’ve never really talk about what you need to do to make service sector employment grow really quickly,” said Madowitz.

The longer low-skilled workers are out of a job, the worse their prospects become. It’s harder to find a new job and, if they switch to a new career after being unemployed for 12 months, low-skilled workers typically suffer a 15 percent pay cut, according to new research by John Bluedorn at the International Monetary Fund.

Some economists see hope that job opportunities in the service sector are coming back. Major employers such as hotels and casinos are hosting job fairs and calling the sales agents at job recruiting websites asking how to boost their ads and make themselves more attractive to potential workers. Reports are surging of “labor shortages,” especially in lower paid jobs.

“Employers are hungry for candidates, but job seekers don’t seem to have noticed that yet,” said Julia Pollak, a labor economist at ZipRecruiter.

But workers are still hesitant to return, partly because they want to wait until they are vaccinated first and partly because they are discouraged after months of not getting any callbacks, says Pollak.

Others say the reason workers without college degrees aren’t flooding back into restaurants and hospitality jobs is because the pay is too low.

“We should be asking how we got to a place where service sector wages are so low and benefits are so nonexistent and workplaces are so unsafe and scheduling practices are so volatile that a mere $300 per week [on unemployment] may be better than the financial benefits and security of a job,” tweeted Elizabeth Pancotti, a senior analyst on the Democratic-led Senate Budget Committee.

The number of Americans who have been unemployed for more than six months has jumped to 4.2 million. Many of these people tried to look for work over the summer and fall and couldn’t find anything. The winter was a particularly slow time for hiring, according to Labor Department data. This can cause people to get discouraged.

A recent ZipRecruiter survey found that high school dropouts were the most likely to agree with this statement: “I’m worried that I may not find a job at all and I’m thinking about giving up.”

Morris, the mom still looking for work in Georgia, hasn’t given up yet, but she is getting demoralized.

“At this point in time, I would take any job I can get that would keep my bills paid,” she said.

Andrew Van Dam contributed to this report.

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