Commentary: Study marks Indiana “at risk”

Last week the Brookings Institution released yet another study that should be read aloud in every Hoosier school, city council and in the General Assembly. This study was an examination of the automation risks to employment across the nation. It is worth discussing the findings, with a focus on what is currently happening in Indiana to address this problem. 

Faithful readers of this column will find some of the Brookings work familiar. Using different data sources, the Brookings study makes almost exactly the same claims my Center reported in our 2017 study of vulnerable communities. Both studies reported that Indiana faces enormous risks of automation-related job losses. Indeed, Indiana the most ‘at risk’ state in the Union, with perhaps half of all jobs facing dislocation within a generation. 

Both studies are nuanced, explaining that automation replaces some human tasks, but also creates demand for workers in different occupations with different skills. It is very clear from both studies that automation-related job losses will be concentrated among the lesser skilled workers, while new job opportunities come among the better skilled and more adaptable workers. The new tasks are mostly covered in four-year colleges, while the adaptability skills are the product of strong elementary education. Maybe the best illustration of how this is already playing out across the nation comes in a review of what has been happening in US labor markets for the last decade.

The Great Recession dramatically disrupted labor markets. Because the nation as a whole improved its level of education, this long recovery has made the nation more resilient and workers generally less at risk from automation. Across the US, the share of adult workers aged 25 or higher holding a bachelor’s degree rose by an astonishing 3.9 percent, while roughly 75 percent of new jobs went to workers with a four-year degree or higher. In contrast, less than 20 percent of job gains went to workers with an associate’s degree or some college training, and only 6.5 percent of new jobs went to a high school graduate. Nationwide, workers without a high school diploma have seen job losses since the end of the recession. 

Nationally 41.3 percent of workers aged 25 and older hold a bachelor’s degree, up from 37.4 percent in 2009. This is a critical improvement in our nation’s long-term economic health, since better-educated workers are far more likely to adapt smoothly to the effects of automation. Moreover, an abundance of high-skilled workers actually improves the labor market prospects of less-skilled workers. 

Indiana’s story is much different. Since the end of 2009, the share of Hoosier workers holding a bachelor’s degree has actually declined by 1.3 percent to 23.3 percent. However, the data is even more worrisome at other levels of educational attainment. Unlike the nation as a whole, the biggest share of job gains in Indiana came to workers without a high school diploma. Across all education categories, college graduates saw the worst recovery in terms of numbers, though the best in terms of wage growth. 

The plain and ugly fact is that over this long economic recovery, Indiana’s work force actually down-skilled for the first time in our more than 200 history. To put it in stark terms that most Hoosiers will find disquieting, our workforce is now less well-educated than is Kentucky’s. 

There are many causes for this, too many to cover in a single column. I’ll have to write more about in the future. What should now be clear to everyone is that this is a looming calamity for Indiana. Most troubling, today our education and workforce policies take little notice of an issue that has captured the national attention for years. One consequence of largely ignoring this problem is that over the past several years our workforce and education policies have increased our vulnerability to job losses. By weakening the college preparatory focus, and shifting funding away from K-12, we have created a workforce less well-prepared for disruptions than they were a decade ago.

The final takeaway is that when Kentucky is outperforming your state in human capital policies, it is time to do something different.


Hicks

Michael J. Hicks, PhD, is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University. Hicks earned doctoral and master’s degrees in economics from the University of Tennessee and a bachelor’s degree in economics from Virginia Military Institute. He has authored two books and more than 60 scholarly works focusing on state and local public policy, including tax and expenditure policy and the impact of Wal-Mart on local economies.

4 Responses to Commentary: Study marks Indiana “at risk”

  1. Joe Keusch February 4, 2019 at 9:50 pm #

    There are so many issues with this column I don’t know where to start. I have been a School Psychologist in the Indiana public schools for 22 years. I have had the unique opportunity to work with thousands of students from pre-school through graduation and onto careers. I have worked my whole career trying to convince parents, administrators and students that our education system went sideways 25-30 years ago when we tried to convince everyone to go to college in order to have what our government, politicians and left leaning professors deemed as successful career opportunities. This tragically influenced the high school curriculum to a point where vocations were cast aside in an effort to get “better prepared” for that magic college education. The results were an unmitigated disaster. Why? Well, several reasons. Many students were going to college who had no business being there. They didn’t have the ability/desire/or any goals related to a college education. Students dropped out, were mired in debt, and had to get jobs out of their degree field. The scenario I like the best is the person who paid $140,000 for an education that got them a $30,000/year job.
    I want to be clear I endorse college education for that subset of kids who are equipped and clearly desire furthering their education in an applied degree field. I spent 7 years in college and feel that it prepared me very well for my career. However, I do not consider the fact that I have an advanced degree makes me successful. Fortunately, I grew up on a farm and am proud to be an active 5th generation farmer. I was exposed to many bright, successful, men and women who learned skills on the job through apprenticeships and internships. The old-timers had it right in a lot of ways. They new the value of learning skills on the job and taking pride in a trade. Fortunately, the Indiana educational system actually took a giant step forward last year with the introduction of graduate pathways. Students can now show proficiencies through a trade or vocation not solely on college prep courses. The local vocational opportunities are outstanding and getting better. The workforce is begging for them. So Dr. Hicks I respectfully disagree that education in Indiana is moving in the wrong direction, quite the contrary.

    Respectfully, Joe Keusch S.S.P
    Specialist in School Psychology
    Certified School Psychologist

  2. Mrs. Ima Ruth Green February 5, 2019 at 10:22 am #

    Certainly a slap in the face of Kentucky…nice going (not)…or was there a “mis-speak(write)?”

  3. J February 5, 2019 at 5:15 pm #

    Totally agree Dr. Keusch ! I have a 4 year Marketing degree from IU. I sell without wearing a suit and tie and love it ! Sure the extra education helped me, but the old adage fits. ” If you do what you love, you’ll never work a day in your life ! ”

  4. J February 5, 2019 at 5:20 pm #

    P.S. Most of my friends I met in “The School of Business” left Indiana 25-30 years ago… just after graduation to do “business” in other states.