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Education and Jobs

By Cameron Macht
December 2012

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Education matters when it comes to pay and unemployment rates, although less in some sectors than others in Minnesota.

Quarterly Workforce Indicators (QWI) data provide valuable insights about the educational levels of adult workers in Minnesota, along with other information on age groups, gender, race and ethnicity, new hires and separations.1

The data have some limitations, though. Employment totals are not exactly comparable with other data sets because QWI data do not include self-employed workers or independent contractors. Also, QWI data by educational attainment include only workers who are 25 or older.

In Minnesota, just over 362,000 jobs - or 14 percent of all jobs - are held by workers ages 14 to 24 and are therefore not included in the educational attainment data from QWI used in this article (see Table 1). Omitting thousands of younger workers in the QWI data set means it cannot give a complete picture of each industry's workforce. Accommodation and food services and the retail sector, for example, have a heavy concentration of workers under the age of 25 who would not be counted in the data. But in 13 industries listed on the table, fewer than 10 percent of the jobs are filled by people under the age of 25, meaning the data provide a fairly clear picture of educational attainment in those cases.


Table 1

Minnesota Quarterly Workforce Indicators by Industry and Age of Workers, 2011

Industry Title

Total Jobs

14-24
Years Old

Percent

25 Years Old
and Over

Percent

TOTAL, ALL INDUSTRIES

2,565,835

362,078

14.1%

2,203,757

85.9%

Agriculture, Forestry, Fishing, and Hunting

17,810

3,714

20.9%

14,096

79.1%

Mining and Quarrying

5,716

340

5.9%

5,376

94.1%

Utilities

14,026

447

3.2%

13,579

96.8%

Construction

102,782

9,465

9.2%

93,317

90.8%

Manufacturing

302,686

20,346

6.7%

282,340

93.3%

Wholesale Trade

126,440

9,560

7.6%

116,880

92.4%

Retail Trade

276,649

79,176

28.6%

197,473

71.4%

Transportation and Warehousing

65,864

4,948

7.5%

60,916

92.5%

Information

54,000

5,201

9.6%

48,799

90.4%

Finance and Insurance

128,930

7,299

5.7%

121,631

94.3%

Real Estate, Rental and Leasing

42,632

3,746

8.8%

38,886

91.2%

Professional, Scientific, and Technical Services

126,857

8,804

6.9%

118,053

93.1%

Management of Companies

86,754

8,706

10.0%

78,048

90.0%

Admin. Support and Waste Management

127,296

21,598

17.0%

105,698

83.0%

Educational Services

228,716

12,081

5.3%

216,635

94.7%

Health Care and Social Assistance

418,756

51,854

12.4%

366,902

87.6%

Arts, Entertainment, and Recreation

47,057

11,777

25.0%

35,280

75.0%

Accommodation and Food Services

196,689

80,163

40.8%

116,526

59.2%

Other Services (except Public Administration)

86,152

15,625

18.1%

70,527

81.9%

Public Administration

109,995

7,208

6.6%

102,787

93.4%

Source: DEED Quarterly Workforce Indicators program


Educational Attainment by Industry

Overall, nearly two-thirds (64.8 percent) of workers 25 and over in the state have some college experience, while the other one-third (35.2 percent) have a high school diploma or less. This does not mean those jobs require that level of educational attainment, just that workers have achieved that level of education. In many cases, workers are overqualified or underemployed for the jobs they hold (see Figure 1).


Figure 1


Utilities has one of the most educated workforces in the state, with more than three-fourths (76.7 percent) of the jobs held by workers with college experience, including 43.2 percent who had bachelor's degrees or higher and 33.5 percent who had some college experience or an associate degree.

Along with utilities, about three-fourths of the workers in each of five other industries had college experience: finance and insurance; professional, scientific and technical services; educational services; information; and management of companies. The health care and social assistance sector and public administration had the highest concentrations of workers with some college experience or an associate degree.

In contrast, the mining, quarrying, and oil and gas extraction industry had the lowest percentage of workers (14.3 percent) with bachelor's degrees or higher, followed by agriculture, forestry, fishing and hunting (15.1 percent) and accommodation and food services (16.6 percent). More than one-half of the workers 25 and over in the latter two industries had a high school diploma or less.

The construction sector and transportation and warehousing also had lower educational attainment in their workforces, with nearly one-half of the jobs held by workers with a high school diploma or less.

Education Pays

With the exception of mining, the highest-paying industries in the state tended to have workers with the highest educations. As shown in Figure 1, almost three-fourths of the jobs in each of four high-paying industries - management of companies; finance and insurance; utilities; and professional, scientific and technical services - were held by people 25 and over who earned degrees or at least experienced college.

The QWI data clearly show that investments in postsecondary education pay off in higher wages. Average monthly earnings for jobs held by adult workers with bachelor's degrees or higher were 43.4 percent higher than for the total of all jobs, and they were nearly double the average annual earnings for jobs held by workers with high school diplomas.

Likewise, average monthly earnings for workers with some college or an associate degree were 42.5 percent higher than wages for workers with less than a high school diploma. Average monthly earnings were higher for people with more education in all 20 main industry sectors, although the benefits of postsecondary education varied widely by industry (see Table 2).


Table 2

Average Monthly Earnings by Industry by Educational Attainment, 2011

Industry Title

Average Monthly Earnings, 2011

Difference between Bachelor's Degree or Higher and
H.S. Diploma

Average Monthly Wages

Less than
H.S. Diploma

H.S. Diploma
or Equivalent

Some College or Associate Degree

Bachelor's Degree or Higher

TOTAL, ALL INDUSTRIES

$4,435

$2,778

$3,291

$3,959

$6,361

93.3%

Management of Companies

$8,143

$4,336

$5,270

$6,576

$11,268

113.8%

Mining and Quarrying

$7,183

$6,155

$6,641

$7,067

$9,548

43.8%

Finance and Insurance

$7,172

$3,937

$4,372

$5,467

$9,467

116.5%

Utilities

$6,988

$5,622

$5,922

$6,491

$7,951

34.3%

Professional, Scientific, and Technical Services

$6,651

$4,098

$4,537

$5,426

$8,341

83.8%

Wholesale Trade

$5,988

$3,752

$4,457

$5,437

$8,511

91.0%

Information

$5,548

$3,407

$3,879

$4,734

$7,071

82.3%

Manufacturing

$5,099

$3,596

$4,189

$4,912

$7,231

72.6%

Real Estate, Rental and Leasing

$4,823

$2,739

$3,328

$4,210

$7,078

112.7%

Construction

$4,713

$3,880

$4,325

$4,725

$5,845

35.2%

Public Administration

$4,088

$3,085

$3,505

$3,970

$4,786

36.5%

Health Care and Social Assistance

$3,977

$2,342

$2,701

$3,427

$5,931

119.6%

Educational Services

$3,785

$2,589

$2,812

$3,319

$4,606

63.8%

Transportation and Warehousing

$3,455

$2,842

$3,199

$3,486

$4,195

31.1%

Administrative Support and Waste Management

$3,067

$2,093

$2,558

$2,983

$4,305

68.3%

Agriculture, Forestry, Fishing, and Hunting

$2,902

$2,588

$2,804

$2,943

$3,385

20.7%

Arts, Entertainment and Recreation

$2,687

$1,961

$2,103

$2,489

$4,023

91.3%

Retail Trade

$2,641

$2,061

$2,344

$2,653

$3,493

49.0%

Other Services (except Public Administration)

$2,618

$1,996

$2,245

$2,565

$3,421

52.4%

Accommodation and Food Services

$1,680

$1,535

$1,611

$1,714

$1,900

17.9%

Source: DEED Quarterly Workforce Indicators program


Average monthly earnings were highest for workers who manage companies, reaching nearly $8,150 in 2011. But wages fell to about $4,400 for company managers with less than a high school diploma, although they made up less than 5 percent of the industry's workforce 25 and over. Company managers with a bachelor's degree or higher had average monthly wages that were nearly three times higher, reaching $11,268. That figure was also more than twice as high as the average monthly earnings for managers with a high school diploma.

Workers in the high-paying finance and insurance, wholesale trade, information and the professional, scientific and technical services sectors share similar earnings gaps for their investments in postsecondary education. Workers with bachelor's degrees or higher in all four industries earn 80 percent or more than workers with high school diplomas or equivalent.

In contrast, wage gaps are much smaller for workers in the high-paying mining and utilities industries. Even though it is the second-highest paying industry in the state, mining and quarrying has a very different workforce profile. As shown in Figure 1, nearly half of the workers over the age of 25 had a high school diploma or less, and fewer than 15 percent had a bachelor's degree or higher, yet average monthly earnings were high for workers throughout the industry. The wage advantage between a high school diploma and a bachelor's degree was much smaller than other industries - just 44 percent higher.

Utilities had much higher educational attainment among its workforce, but also a much smaller gap in average monthly earnings between workers with a high school diploma or less and workers with postsecondary education. Not to say that the investment in education isn't worthwhile, as workers with bachelor's degrees or higher still earned nearly $8,000 per month on average in the utilities industry, compared with just under $6,000 for utilities workers with a high school diploma.

More education also leads to significant earnings advantages in the two largest industries in the state: manufacturing and the health care and social assistance sector. Combined, these two industries account for more than one in every four jobs in Minnesota, totaling nearly 725,000 jobs, according to QWI data. Workers with a bachelor's degree or higher in health care and social assistance make nearly 120 percent more than workers with a high school diploma.

In comparison, just over 40 percent of the jobs in manufacturing are held by workers with a high school diploma or less, and they earn relatively high wages compared with other industries. Manufacturing workers with less than a high school diploma actually earned more than workers with bachelor's degrees in four other industries, averaging about $43,155 annually. But manufacturing workers with some college or an associate degree tacked on almost $16,000 more per year, and workers with a bachelor's degree or higher earned double the average annual earnings at $86,775.

The lowest wage differential was found in the accommodation and food services industry, but so were the lowest wages. As shown in Figure 1, workers 25 and over in accommodation and food services represent about 16 percent of each end of the educational spectrum. The wage differential between workers with less than a high school diploma and those with bachelor's degrees or higher amounted to less than $400 per month.

Likewise, the earnings advantage for higher educational attainment in many of the lowest-paying industries in the state tends to be lower. That is partly because these industries rely more on workers with lower educational attainment. These data, however, might also reflect less on the value of educational attainment in these industries and demonstrate more the effects of underemployment for some workers in these industries. Again, just because workers have college experience or an advanced degree does not mean that it is required for the job they hold.

Turnover Rates

Unemployment and turnover rates were lower for workers with higher educational attainment. For all industries, turnover rates were 10.2 percent for jobs held by workers with less than a high school diploma and 8.1 percent for workers with a high school diploma or equivalent. Workers with some college or an associate degree had a turnover rate of 7.5 percent, while those with a bachelor's degree or higher had a turnover rate of 7.1 percent (see Table 3).


Table 3

Turnover Rate by Industry by Educational Attainment, 2011

Turnover Rate

Total

Less than H.S. Diploma

H.S. Diploma or Equivalent

Some College or Associate Degree

Bachelor's Degree
or Higher

TOTAL, ALL INDUSTRIES

7.7%

10.2%

8.1%

7.5%

7.1%

Agriculture, Forestry, Fishing, and Hunting

11.3%

13.2%

10.8%

10.7%

11.6%

Mining and Quarrying

5.2%

8.0%

5.5%

4.5%

5.2%

Utilities

3.0%

5.4%

3.7%

3.1%

2.4%

Construction

10.5%

13.9%

11.3%

9.8%

8.4%

Manufacturing

4.9%

6.2%

4.9%

4.8%

4.8%

Wholesale Trade

5.6%

7.1%

5.7%

5.4%

5.5%

Retail Trade

8.7%

9.7%

8.2%

8.6%

9.1%

Transportation and Warehousing

8.1%

9.7%

8.1%

8.0%

7.7%

Information

7.0%

9.2%

7.6%

6.9%

6.7%

Finance and Insurance

9.1%

11.6%

9.1%

9.0%

8.9%

Real Estate, Rental and Leasing

8.7%

10.6%

8.9%

8.6%

8.1%

Professional, Scientific, and Technical Services

7.4%

10.7%

8.5%

7.5%

6.7%

Management of Companies

9.3%

11.5%

9.5%

9.3%

8.8%

Administrative Support and Waste Management

16.1%

19.0%

16.4%

15.7%

15.0%

Educational Services

7.3%

10.3%

8.0%

7.4%

6.6%

Health Care and Social Assistance

6.6%

9.1%

7.3%

6.3%

5.7%

Arts, Entertainment, and Recreation

13.5%

15.6%

13.2%

13.0%

13.9%

Accommodation and Food Services

11.4%

11.8%

11.2%

11.4%

11.9%

Other Services (except Public Administration)

8.0%

9.5%

8.0%

7.9%

7.7%

Public Administration

4.1%

6.4%

4.7%

3.8%

3.6%

Source: DEED Quarterly Workforce Indicators program


In certain industries, the differences were even more pronounced. For example, the turnover rate for construction workers with a bachelor's degree or higher was 5.5 percent lower than for workers with less than a high school diploma. For workers in the professional, scientific and technical services industry, the turnover rate gap was 4 percent from one end of the educational spectrum to the other, and rates were also much lower for higher educated workers in administrative support and waste management services, educational services, health care and social assistance, and utilities.

In contrast, turnover rates were slightly higher for workers with bachelor's degrees or higher than for workers with less than a high school diploma in the accommodation and food services industry. Turnover rates also were higher for workers with bachelor's degrees or higher than for workers with a high school diploma in the agriculture, retail trade, and arts, entertainment and recreation industries.

Investing in Education

As the data show, investing in a postsecondary education likely will pay off in higher wages and lower unemployment. The returns on investment, though, may vary widely depending on the industry and occupation. College experience is a necessity in some jobs, especially in the higher-paying industries, while a bachelor's degree may lead to underemployment or higher turnover in other industries. In some industries, a high school diploma may be all that is needed to secure a steady, good-paying job.

By using QWI data to explore the concentration, earnings and turnover rates for workers in Minnesota's major industries, students and job seekers can make more informed career decisions.



1QWI data come from the U.S. Census Bureau's Local Employment-Household Dynamics (LEHD) program, which is a federal-state partnership that links employment data from state administrative records with demographic and social characteristics from Census Bureau surveys and censuses.

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