Labor Market Report for June 22nd, 2020

WPSI Labor Market Report Graphic
Jun 22, 2020 3 years ago

Every week, we will be publishing labor market industry (LMI) data and important trends to consider in the development of an equitable economic recovery from the COVID-19 crisis. We are always looking for opportunities to learn, grow, and collaborate. Email [email protected] to learn more.

Last week, we looked at overall employment trends across industries during the COVID-19 crisis. If you have not read that post, click here. This week, we have shifted our focus to occupations. We'll examine how educational attainment affects employment and wages, and the role of educational requirements in different labor markets.  

In recent months, there has been extensive reporting on how essential workers are often the lowest paid and most at-risk. Many essential jobs do not require bachelor’s degrees, with notable exceptions for nurses and other highly skilled healthcare jobs. This is reflected in the data.  

Comparing jobs postings that explicitly require a bachelor’s degree or higher with those that require an associates or high school diploma, we see that job postings in both categories were down. However, postings with requirements of a bachelor’s degree or higher are down 48%, while those requiring an associate’s or below were down just 22%. Of the job postings that are beginning to recover, many are concentrated in the lowest paying occupations like Protective Services ($12.92/hr), Healthcare Support ($13.77/hr), and Office & Administrative Support Workers ($14.82/hr). Unsurprisingly, Food Preparation Worker postings have virtually disappeared, falling from 60 postings in February to just two last week.  

While strong labor markets can boost wages to increase competition for talent, a weak labor market and slow recovery can force workers into a race to the bottom. This effect is exacerbated when the recovering jobs are lower wage service sector positions. A clear picture of these trends can be drawn by comparing job attainment requirements with data from the American Community Survey on education attainment of workers in that occupation.  

  • The first is through degree inflation, where employers require a higher level of education than is necessary to perform the job. 

  •  Second is through over-qualification, where the percentage of people holding a certain degree is higher than what is being requested by firms in job postings.  

Though it is still too early to see how strongly these issues will present in the labor market in the wake of COVID-19, it is reasonable to expect degree inflation and over-qualifications in times of high unemployment. The challenge for organizations like the West Philadelphia Skills Initiative will be to articulate to our employer partners the ways degree inflation hurts competitiveness and discriminates against communities who are more likely to be excluded due to systemic racism in education and opportunity, while simultaneously guiding individuals towards types of work that offer growth, fair pay, and the opportunity to use and build on the skills they possess.  

About the data: Data is sourced from Burning Glass Technologies Labor Insights, unless otherwise noted, covering job postings in the City of Philadelphia and the Philadelphia Metro Statistical Area (MSA), which is comprised of roughly a circle surrounding Trenton, Philadelphia, King of Prussia, Camden, and Wilmington. This data is then compared to a benchmark week of February 9th – 15th, which was the last week before the economic impact of COVID-19 began to be reflected in job posting data.