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Education and the Texas Work Force  |  CHAPTER 2

Chapter 2

Education and the
Texas Work Force

Ensuring that more secondary students graduate with the knowledge and skills needed to pursue education and training beyond high school carries significant economic benefits. Individuals benefit from increased earnings potential, while the state enjoys improved economic performance through productivity gains and increased tax revenues.

State policymakers recognize these opportunities, and have made numerous attempts to improve the quality of our public schools, boost achievement among different student populations, prepare more students for college and increase the number of college graduates.

One such project – Closing the Gaps led by the Texas Higher Education Coordinating Board (THECB) – identified potential shortfalls in college attendance and graduation trends and developed targets to help eliminate them. Since the release of the first Closing the Gaps report in October 2000, the state has seen improvement in the share of bachelor’s degrees earned by its college-aged population (those between the ages of 18 and 24). In 2000, 5.5 percent of Texas’ college-aged population received bachelor’s degrees; by 2005, that share had risen to 6.3 percent.¹

Aside from Closing the Gaps, other Texas policy changes intended to increase college graduation rates range from the creation of the state’s public school accountability system, some decades ago, to the recent restructuring of the state’s standard high school curriculum. From 2000 through 2006, the number of bachelor’s degrees awarded by public universities in Texas rose by 21 percent, while the college-aged population increased by 22 percent.²

Despite such results, however, it is clear that Texas is not moving enough students through the state’s educational pipeline. According to the THECB, just 61 percent of students who were seventh graders in Fall 1995 graduated from high school on time, in Spring 2001 (Exhibit 2-1). Only 18 percent earned a college degree or certificate by Spring 2006, and only 43.6 percent had enrolled in higher education at all.

Career and Technology Education

Preparing high school students to earn bachelor’s degrees is important for the state’s economic future. The same can be said, however, for increasing the number of Texans who earn associate degrees and postsecondary training certificates.

The number of associate degrees awarded by public community and technical colleges in Texas rose by 50 percent from 2000 (24,810) to 2007 (37,309). Over the same time period, the number of postsecondary training certificates awarded rose by 32 percent, from 15,743 awards to 20,795.³ Nonetheless, recent evidence points to a shortage of workers for jobs requiring some postsecondary education, but not a bachelor’s degree. Without rapid increases in postsecondary career and technology education (CTE) enrollment, existing worker shortages could worsen.

If these shortages of skilled workers persist, it may have significant negative consequences for individual Texans as well as the state’s economy and state revenues. Persons with associate degrees, for example, can expect to earn $340,000 more over their lifetimes than high school graduates with no postsecondary education. The difference is even greater in the case of a high school dropout, who can expect to make $590,000 less than someone with an associate degree.⁴

A lack of career and technology training opportunities, moreover, can lead to higher dropout rates, which can lead to fewer students taking postsecondary CTE courses and further reduce Texas’ technically skilled work force. Recent data from TEA show that high school students who take courses in career and technology education through a Tech Prep program have higher average graduation rates (Exhibit 2-2) and are less likely to drop out⁵ (Exhibit 2-3) than those students who do not participate in Tech Prep.⁶ (Tech Prep is a program that allows students to start a college technical major in high school. It combines academic and technical courses and allows students to earn college credit through content-enhanced courses, dual credit and College Board Advanced Placement testing.)

Other studies have found that CTE courses improve graduation rates and reduce dropouts. A review of numerous CTE studies found there is solid statistical evidence that CTE courses actually play a role in reducing dropout rates, especially among students who are at high risk of dropping out.⁷ Research also shows that CTE courses increase future earnings, with students who spent about 17 percent of their time in high school on occupation-specific courses earning at least 12 percent more one year after graduation and about 8 percent extra seven years later.⁸

Discouraging CTE?

Despite such findings, Texas continues to direct more students toward the academic track rather than CTE.

For instance, recent curriculum changes commonly called “four-by-four” requirements make four years of math and science standard for Texas high school students. These requirements may limit students’ ability to pursue studies geared toward technical and industrial careers.⁹ And any reduction in the pool of available skilled technical workers presents a challenge to Texas businesses striving to maintain a competitive edge.

Similarly, a rule recently proposed by THECB would remove many CTE courses from the uniform calculation of GPAs for college admission. THECB’s stated reason for this proposal was that the basis for determining the state’s uniform GPA calculation should be focused on courses that prepare students for university work, since universities are the only institutions that consider GPA in admissions. Many CTE courses are closely related to programs offered only by community and technical colleges that have open admissions policies that do not take GPA into consideration.¹⁰

Such measures, however, may imply that the state does not consider CTE as valuable as academic courses, and may suppress enrollment in CTE courses.

Job Demand

Policies that impede CTE are clearly counterproductive at a time when the state’s employers need more skilled workers holding an associate degree or vocational certificate.

According to the Texas Workforce Commission’s projections, Texas will have an average of nearly 44,000 job openings annually through 2016 for occupations requiring an associate degree or postsecondary vocational award. Occupations requiring a bachelor’s degree will see more than 68,000 job openings each year. Master’s and doctoral degree holders can expect around 9,000 and 3,000 annual average job openings, respectively.¹¹ By contrast, Texas’ public universities, colleges and health-related institutions awarded just 36,442 technical associate degrees and certificates in 2007, compared to 78,863 bachelor’s degrees and 28,477 master’s and doctoral degrees.¹⁶

But beyond the statistics, an inadequate supply of and skilled workers could also mean lost potential for individual Texans. As we have seen, foregoing postsecondary education can lead to a tremendous loss of income over a lifetime. And contrary to popular perception, thousands of jobs that pay above-average wages require less than a bachelor’s degree.

In Texas, occupations that require an associate degree or postsecondary vocational award/certificate pay an average of more than $40,000 annually, compared to the average pay of less than $25,000 for those with only a high school diploma or less. The right bachelor’s degree can mean an annual average wage of almost $59,000; master’s and doctoral degree occupations pay an annual average salary of about $60,000 and $65,000, respectively.²⁰

Within each educational attainment category, of course, some occupations pay above or below the average based on the supply and demand of labor for a given occupation. If specific occupational skills are in high demand, their price goes up. Today, some traditionally lower-paying occupations are experiencing high demand and paying relatively high wages; examples include welding and licensed practical and vocational nurses.

Simply increasing the number of college graduates is not necessarily the most effective way to address the work force needs of employers and the Texas economy. Texans have a variety of options for publicly funded postsecondary education or training, though some students may not be aware of them due to the state’s increasing emphasis on four-year degrees. One must also consider the types of degrees, and more importantly, the actual skills and competencies students obtain, and how these mesh with employer demand.

The nationwide nursing shortage, for instance, has received widespread publicity. Some parts of Texas face acute shortages of these vital workers and the state has taken steps to increase the supply of nurses and other health-related occupations.²¹ There is less awareness, however, of Texas’ shortage of various technical specialists – welders, aircraft technicians, chemists, competent machinists, tool and die makers and more. These shortages have a direct impact on the competitiveness of Texas companies as well as our ability to recruit new employers.

Businesses looking to relocate to other regions, states or countries often use consultants to help them evaluate prospective sites based on a number of criteria such as corporate tax rate and permitting processes. According to one survey of such consultants, one of the top factors in such decisions is the availability of skilled labor.²²

It is thus clear that Texas must continue to increase the supply of skilled and educated workers if it is to retain the economic edge it has had over other states in recent years. In addition to increasing the number of students earning bachelors’ and advanced degrees, Texas’ economic prospects will turn on its supply of skilled workers with technical certificates and associate degrees.

Endnotes

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