One Fifth of Tucson’s Educated Unemployed “Not in Labor Force”

Vic Napier

December 2009

For years educators have argued that education is directly proportional to lifetime income, job security and employability. The idea that education insulates people from economic fluctuations is an article of faith for much of the 20th century. Even President Obama urges people to return to school during the recession so they would be better able to find jobs when the economy recovers.

Does education really increase the chances of getting a job? Or is the relationship between education and employment an artifact of the industrialized economy of the 20th century, and irrelevant in the service/knowledge economy of the 21st?  Educators still tell us education has value, but we ridicule the value of education with well worn jokes. “What is the first thing liberal arts majors say after graduation – ‘Want fires with that?’”

There have been a number of national news stories about professionals competing for holiday sales jobs (Jobless Professionals 2009 December 6). We know there are plenty of people here in Tucson with advanced degrees looking for work, or working far below the level for which they are trained. We tell each other about meeting them all the time. There are roofers with masters’ degrees in Public Administration, Qwest technicians with graduate degrees in Organizational Development, and waiters at Red Robin with degrees in Education and Spanish. And let’s not forget Bookman’s. It seems like everyone at Bookman’s has a graduate degree in something.

Is this group included in any of the plans for local economic development? They do not seem to be. The educated unemployed are not mentioned in the Tucson Regional Economic Opportunities (TREO) Economic Blueprint (2006). Instead, TREO emphasizes attracting entrepreneurs to Tucson in hopes that they will develop jobs. There is nothing wrong with that, but it seems easier and cheaper to mobilize talent already living here. The educated unemployed are already here and – presumably -- have the ability to create jobs for others. With only a little effort this group could launch micro businesses that would both serve the needs of the community and provide jobs for assistants and helpers.

Or can they?

Are there enough educated unemployed in Tucson to really make a difference? Is TREO ignoring a valuable resource, or are the educated unemployed just a small group of losers; slackers who somehow stumbled through four years of school, (or six or eight), and don’t have the motivation to find a job? How can we find out more about them?

Statisticians at the Census Bureau stay busy between the decennial census by updating their data with new samples and ever more detailed analyses. As a matter of fact, the Census Bureau just released a new set of American Community Survey (ACS) data covering 2006 through 2008 – just before the emergence of the Great Recession (US Census Bureau 2009a). Anyone who can operate an Excel spreadsheet and knows a little about basic math can download data and get some very interesting numbers and fairly sophisticated insights of that time.

For example, Table B15004, Poverty Status in the Past 12 Months by Sex by Educational Attainment for the Population 25 Years and Over, estimates that 71,187 people in Tucson were living below the poverty level during a 12 month period when the ACS survey was conducted between 2006 and 2008 (US Census Bureau 2009b). That represents about 11% of the population of the Tucson metro area of 646,142. Of those impoverished people about 60% had a high school diploma or less. Interestingly, that group was split evenly between those who had graduated from high school and those who had not. For those finding themselves below the poverty level a high school diploma did not make much of a difference.

But then neither did a college degree. About 40% of the people below the poverty level in Tucson had at least some college. Of those 8% had a Bachelors degree and 4% had a graduate or post graduate degree. Four percent does not sound like much, but in real numbers it means that over 3,000 people living below the poverty level in Tucson just before the Great Recession had Masters or PhD degrees. If we include people with Bachelor’s degrees, we find that almost 9000 people who earned college degrees were officially impoverished.

Of course, those numbers come from a group that was already impoverished, and does not directly address unemployment and education. What happens if we look at the relationship between unemployment and education? Things are bound to be more encouraging, right? Well, yes. At first, anyway.

Table B23006, Educational Attainment by Employment Status for the Population 25 To 64 Years has the information we want, and it reveals about what we would expect to find in terms of unemployment rates and education level (US Census Bureau 2009c). People with a high school degree or less had about a 5% unemployment rate during the ACS survey in 2006 through 2008. That is about what the official unemployment rate was during that time. No surprise there. Nor are there any surprises in the higher educated groups. Their unemployment rate was lower, people with some college at 4% unemployment, and those with a Bachelors or higher at 2%.

But wait! The Census Bureau tracks another category of unemployed they call “Not in Labor Force”. Buried in a lengthy explanation of statistical methodology is this definition:

“Not in Labor Force – All people 16 years old and over who are not classified as members of the labor force. This category consists mainly of students, homemakers, and retired workers, seasonal workers interviewed in an off season that were not looking for work, institutionalized people, and people doing only incidental unpaid family work (less than 15 hours during the reference week).” (US Census Bureau 2009d, p.44)

The Bureau of Labor Statistics (BLS) uses a similar category called U-6, which measures anyone who would be working at a full time job if one were available (BLS 2009 December 4).  Adding the U-6 figure to the official unemployment numbers almost doubles the unemployment rate. According to the BLS, there are a lot of people who would be working if a job were available to them. Because the Census Bureau’s “Not in Labor Force” numbers approximate BLS U-6 numbers the believability of both numbers increases. It is unlikely that they would both be wildly inaccurate.

According to Table B23006, 19% of the 140,000 people in Tucson with a Bachelors degree or higher are “Not in Labor Force”. That is almost 30,000 well educated people who are not working.

Of people who have some college but not a degree, about one quarter (23%) fall into the Not In Labor Force category. In real numbers that is 40,000 people with some schooling past high school who are sitting idle.

High school grads and non grads classified as Not In Labor Force are at 28% and 39% respectively, for just under 60,000 people not working.

Altogether there are about 130,000 people in Tucson categorized as Not In Labor Force by the Census Bureau. Even if half of those are willing and able to work they would number more than the entire population of Flagstaff – 60,000.

How can this be? We have heard for years that education is the key to employability and wealth. We all remember those graphs in high school showing that education is about as close to a guarantee of the Good Life as anyone could imagine. Maybe the Census Bureau transposed some numbers, or the particular tables we are looking at got corrupted during the download. Things like that happen sometimes. Hasn’t there been a real study done by real researchers looking at the relationship between education and employment?

As a matter of fact there is. In 2006 researchers at the National Center for Education Statistics, an office of the US Department of Education, published the final report of a longitudinal study that followed 9000 people for ten years after they earned bachelor’s degrees in 1992 -93 (Bradburn, Nevill, and Cataldi, 2006). If anyone can produce definitive numbers on education and employment it should be these folks. The results are sobering.

Only 70% of the graduates of 1992-93 were employed in a single full time job ten years later. For the remaining 30% slightly less than half (13%) were unemployed, (4% looking for a job and 9% had dropped out of the labor force completely). Of the remaining 17%, 9% were employed in multiple part time jobs and 8% had only one part time job. Not exactly a ringing endorsement of the value of higher education, but very similar to U-6 numbers the BLS gives for unemployed and marginalized workers, and consistent with the Census Bureau Not In Labor Force numbers.

Maybe the data we looked at earlier regarding Tucson’s educated unemployed are more accurate than we might have first thought.

Think about what that means. Even if those numbers are just rough approximations it means there are tens of thousands of smart, well educated people walking the streets of Tucson who are not contributing to our economic recovery. Those people are a valuable resource that could be harnessed to bring Tucson out of the economic malaise it has been suffering through since long before the Great Recession started making headlines.

The fact that they have gone to school shows that they are trainable and self motivated. They have learned skills and acquired abilities that others have not, and they have already demonstrated what they can accomplish if given the right structure. It seems like this group would be a pivotal component of local economic recovery plans.   

Imagine if only one fourth of the Not In Labor Force college educated were organized and given the task of assessing Tucson’s small business situation. That means 7500 people focused on the economy of Tucson and finding solutions that would benefit both business and the unemployed. Detailed surveys and sophisticated analyses could be done in a matter of weeks, and at the same time this local talent would have made personal contact with small businesses that need their skills. 

And let’s not forget that all the numbers we have been examining were collected before the Great Recession, when the economy was humming along at full employment. (Well…full employment only if you ignore those pesky U-6 and Not In Labor Force numbers.)

How come this local resource is being ignored? Perhaps the idea that a large group of educated unemployed exists in Tucson is simply unfathomable. Maybe the education lobby has been so successful with their “education equals jobs” pronouncements that we cannot accept that it is no longer true. Like life time employment and job security maybe “education equals jobs” is a truism that used to apply in a bygone era.

Maybe TREO has a few blind spots. Any organization can be a victim of its own prejudices, and TREO is no exception. Is TREO an aggressive think tank turning concepts into solutions, or has it become a social organization for Tucson elite? To paraphrase Janet Jackson, “What have you done for us lately?” How can we answer that question? Who is supposed to be monitoring TREO and assessing its effectiveness?      

Apparently no one. But there is probably an unemployed PhD or MBA who knows all about Program Evaluations who would love to tackle the project.

 

Vic Napier

 

 

References

BLS (2009 December 4). Employment Situation. Economic News Release. Table A-12.  Alternative measures of labor underutilization. Retrieved from: http://www.bls.gov/news.release/empsit.t12.htm

Bradburn, E. M., Nevill, S., and Cataldi, E.F. (2006). Where Are They Now? A Description of 1992-93 Bachelor’s Degree Recipients 10 Years Later, (NCES 2007-159). Retrieved. From http://nces.ed.gov/pubs2007/2007159.pdf.

Jobless Professionals (2009 December 6). Jobless professionals compete, out of desperation, for temporary holiday-season sales jobs. Associated Press. Retrieved from: http://www.startribune.com/business/78637537.html?elr=KArksLckD8EQDUoaEyqyP4O:DW3ckUiD3aPc:_Yyc:aULPQL7PQLanchO7DiUsT

TREO (2006). Tucson Economic Blueprint Strategic Analysis Report. Retrieved from: http://www.treoaz.org/TREO/media/docs/Blueprint%20Full%20AnalysisFNL.pdf

US Census Bureau (2009a). American Community Survey (ACS). 2008 ACS Data Release. Retrieved from: http://www.census.gov/acs/www/Products/index.html

US Census Bureau (2009b). American Community Survey (ACS ) Table B15004. Poverty Status in the Past 12 Months by Sex by Educational Attainment for the Population 25 Years and Over. Universe: Population 25 Years And Over For Whom

Poverty Status Is Determined. Data Set: 2006-2008 American Community Survey 3-Year Estimates. Retrieved from: http://factfinder.census.gov/servlet/DTSubjectShowTablesServlet?_ts=278788435281

US Census Bureau (2009c). American Community Survey (ACS ) Table B23006, Educational Attainment by Employment Status for the Population 25 To 64 Years. Universe: Population 25 Years And Over For Whom Poverty Status Is

Determined. Data Set: 2006-2008 American Community Survey 3-Year Estimates. Retrieved from: http://factfinder.census.gov/servlet/DTSubjectShowTablesServlet?_ts=278788435281

US Census Bureau (2009d). American Community Survey (ACS).Subject Definitions. 2008 Subject Definitions. Retrieved from: http://www.census.gov/acs/www/Downloads/2008/usedata/2008%20ACS%20Subject%20Definitions.pdf