For a person to get a job, there must be a job opening. Call that Step One. Step Two is that the person seeking said job has the requirements to actually do that job. For many U.S. metropolitan areas, Step Two is the hard part.
There are job openings in the U.S. But the people living near those jobs don't have the relevant education or training to get them, according to a new report out today from the Brookings Institution. The report looks at education, job openings and unemployment in the 100 largest metropolitan areas in the U.S. between January 2006 and February 2012 and finds that the overall unemployment picture in metro areas gets a lot worse when the workforce's educational background doesn't match up with the requirements of employers.
Nationwide, only 24 percent of job openings in 2012 were available to people without at least some post-secondary education. A whopping 43 percent of job openings require a bachelor's degree or more. It's easy to see why, as of May 2012, unemployment among those with a high school diploma or less is six percentage points higher than among those with a bachelor's degree or more.
This difference also plays out at the metropolitan level. Unemployment rates were 2 percent higher in places where the supply of higher-educated workers can't meet the demand. Put another way, these are places where the available jobs require higher levels of education, but the workforce largely does not meet that requirement. This is what the report calls an education gap.
The McAllen-Edinburg-Mission metro area in Texas has the nation's highest education gap, at 13.9 percent. Bakersfield-Delano in California is not far behind, with 13.7 percent. El Paso has the third largest gap, at 13 percent. Unemployment rates in these areas are all in the double digits.
The education gap is smallest in Madison, Wisconsin, which actually has a negative gap, meaning there are more than enough higher-educated workers to meet demand. Honolulu and Provo-Orem, Utah, are close behind. Unemployment rates in these places are all under 6 percent.
But this is not just an issue of some areas not having enough college diplomas. As the report notes, smaller education gaps mean lower unemployment across the board, not just at certain educational levels:
In metro areas with low education gaps, unemployment rates are considerably lower for the average worker, for the less educated, and for young adults. The differences are large, between 4 and 6 percentage points. In healthy labor markets, characterized by a highly educated workforce, all groups do better, even those with the least education and experience.
So while the housing crash and changing industrial demands have largely determined unemployment over the short term, this gap between educational attainment and the educational requirements of jobs explains most of the long-term unemployment issues in metropolitan areas. Addressing persistent unemployment will require addressing the imbalance between workers and jobs.