New Collar Jobs and the Future of the American Dream

Learning by Doing

“New collar jobs,” and what they mean for the future of the American Dream

Last November, IBM CEO Ginni Rometty introduced the concept of “new collar jobs” as jobs that are skilled and provide real opportunities for upward mobility, but do not necessarily require a traditional 4-year college degree. Examples include pharmacy technicians, medical assistants, computing analysts and website developers. A year later, we’re now seeing an uptick in initiatives aimed at not only creating these kind of jobs, but at building a workforce that can fill them.

In July, Congress introduced the New Collar Jobs Act to support training for cyber-security skills. Companies like IBM, Microsoft and Delta have since teamed up with nonprofits, such as Skillful and Opportunity@Work, to create programs and pipelines that lead into already in-demand jobs. And educational institutions of all kinds are working with these groups to create relevant curricula as well.

In fact, the shared workspace giant, WeWork, just announced they’re launching a 15-week, $15,000 vocational program for coding at their New York City locations to provide young people interested in web development with an alternative to more expensive, four-year college degrees.

This trend of focusing on new collar jobs, and non-traditional education paths is the start of an important movement for us as a country to re-think how and why we educate our youth, and to create a system that works better for the new economy—whether it’s by adapting the institutions we already have, or by developing entirely new ones.

There are three major problems with our reliance on 4-year degrees as the primary path to a strong and stable career:

1) The most in-demand skills are now changing within the timeframe of a person’s career.

The paradigm of completing one’s education prior to entering the workforce no longer fits realities on-the-ground. Whereas previous generations were able to succeed with the general professional competence they gained as young people all the way through retirement, the expectations and changing demands of today’s labor market require that workers not only maintain, but grow a strong set of both soft and technical skills. With the rapid pace of today’s technological advancements, it’s become impossible to predict what skills will be most useful in the labor market 10 years from now一meaning the days of knowing everything you need to excel in your career by the age of 25 are long gone. All workers today should expect to invest in learning new skills and developing their abilities over the course of their lifetimes if they want to stay competitive in the job market.

2) In fact, college was not originally  intended to train young people in hard skills.

The first universities in the American Colonies, following the tradition of their European predecessors, offered only liberal arts educations. Up until the Revolutionary War, most students who attended universities were the sons of wealthy families. A college education was intended to create well-rounded graduates, who would  become civic and religious leaders in their communities. At that time, tangible or trade based skills were learned through apprenticeship.The first medical schools and law schools in the U.S. were established in the second half of the 18th century, and became the gateway to the upper classes for those who would not inherit wealth (the first business school wouldn’t come until 1908). After the Civil War, the number of colleges skyrocketed across the country, as did total U.S. enrollment. And the variety of fields available to study at universities grew as well. But it is only in the past 50 years have we adopted the now common view that college is a necessary step to a middle-class lifestyle. Since then, we have tried, with limited success, to turn higher education into preparation for employment.

3) 4-year degrees are costly, in terms of both money and time.

While 4-year colleges in the U.S. arguably provide the best higher education in the world, some bemoan (while others accept) their inability to train graduates with specific skills they can use in the workplace. Having a 4-year college degree certainly helps many graduates land a job, but it doesn’t necessarily help them perform that particular job better. Meanwhile, the four years they spend at school are years of potential on-the-job experience or technical training that students forgo, often accumulating tens of thousands of dollars in debt in the process. The pace at which today’s technologies are accelerating change in the labor market only exacerbates the imbalance of these costs with the benefits of college. Rather than making the huge up-front investment of 4-year college degree, making smaller investments in training and education over-time will better suit the new economy.

The rise of new collar jobs is a great opportunity to refocus the labor market on skills and competencies. Performance in many of these types of new collar positions can be measured directly, rather than inferred from generic credentials. By focusing narrowly on specific and measurable skills, the country can move closer to the American Dream of meritocracy. In addition, this shift will allow us to be more adaptable by continuing to gain in-demand skills over the course of our careers.

Written by

ZipRecruiter's former Chief Economist, Cathy Barrera is the founding economist of Prysm Group, a leading blockchain economics and governance design firm.

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