Introduction

Ten Facts About the Best Industries for Non-College-Educated Workers

Conclusion

Endnotes

Introduction

Relatively few of the benefits of economic growth in the last decade have gone to less-educated workers. The median inflation-adjusted salary for a worker with a high-school degree who has not attended college increased by less than 1 percent from 2008 to 2017 (inching from $37,596 to $37,960). Moreover, non-college-degree workers earn just 56 percent as much as the median worker with at least a bachelor’s degree.^[1]

The common response to this disparity is to call for more young people to attend and finish college. But this can’t be the full answer. Some people simply don’t like school and academic learning. Many more, as the student-loan crisis shows, cannot afford to go to college. Moreover, having more college-educated barbers, for example, would do little to boost their incomes, as many low-wage jobs pay little, not because the workers don’t have as much education, but because their occupations have low productivity.

As such, policymakers need to think about new approaches to help non-college-educated workers. It is beyond the scope of this paper to spell out such an agenda in detail, but clearly steps involve greater support for skills development and training, more universal access to health care, and a higher minimum wage must play a key role.

But even this will not be enough given the large share of jobs in the economy that are in low-productivity sectors and occupations. Indeed, nearly 30 million workers without a college degree work in industries where the average wage for non-college-educated workers is less than $25,000 per year, or $12.50 per hour.^[2] Therefore, the most important policy to boost economic opportunity is one that focuses on shifting the occupational mix toward fewer low-wage jobs and more middle-wage ones.

Policymakers should start by supporting policies that spur automation in occupations that pay poorly and employ a high share of non-college-educated workers. The savings produced by automating some of these jobs increase demand in other parts of the economy. That boosts spending, thereby creating new jobs, many of them middle-wage jobs. This means supporting policies that spur more automation, such as increased funding for productivity-focused R&D and establishing an investment tax credit—or, absent that, permanent first-year expensing for capital equipment.[3]

If policymakers cannot put the pedal to the metal for automating low-wage jobs, they should at least resist the increasingly fashionable panics about technology killing jobs and oppose neo-Luddite responses like technology bans, “robot taxes,” or undue regulatory restrictions.[4]

At the same time, policy should work to help expand jobs that pay non-college-educated workers reasonably well. As this brief shows, these are more likely to be found in high-tech industries where staying competitive requires discovering and developing new breakthroughs, all of which requires skilled workers, including skilled technicians. In addition, traded sectors—those industries which face global competition—are particularly important because the competition they are exposed to pushes them to become more productive, making each worker’s labor more valuable. Further, traded sectors are crucial for the economy because the contraction or failure of a traded-sector firm has a multiplier effect, harming all the U.S. domestic suppliers and customers that rely on the firm. Unlike closing a barber shop, which simply redirects demand to existing or new barber shops, losing traded-sector industries often allows foreign producers and workers to step in and meet the demand.

Against that backdrop, 10 revealing facts follow below about the industries that provide the best prospects for non-college-educated workers. They are drawn from analysis of microdata from the 2008 and 2017 editions of the Census Bureau’s American Communities Survey (ACS).^[5]

Ten Facts About the Best Industries for Non-College-Educated Workers

1. Software Publishers Pay the Highest Wages to Workers Without College Degrees

While the software industry employs a low percentage of workers without college degrees—16 percent compared to 56 percent for all industries—they earn an average annual salary of $84,731, which is more than 2.5 times the group’s national average ($32,997) and even greater than the average wage that workers with at least a bachelor’s degree receive ($76,544). This is likely due partly to the fact that some workers in the industry have strong programming skills but no college degree and partly that there is an overall shortage of software workers, regardless of their level of education.

Four other industries pay workers without degrees more than $70,000 on average, and all of them are engaged in energy production: electric and gas utilities, electric power generation and distribution, oil and gas extraction, and petroleum refining. In these industries, most workers are skilled technicians, many with two-year degrees and significant, deep work experience.

2. Workers Without Degrees Earn 58 Percent More in High-Tech Industries

High-tech industries employ a smaller share of workers with less than college degree (32 percent) compared to all industries (57 percent). While 90 percent of employees have less than a college degree in the logging industry (which has the greatest share of non-degree-educated workers), only 16 percent lack a degree in the software industry (which has the lowest share). However, the average wage for workers without a college degree in high-tech industries is $50,661—58 percent more than the non-high-tech industry average of $32,083. These are industries that rely on innovation and advanced technology, such as aerospace, biopharmaceuticals, software, and telecommunications. Moreover, the gap between innovation industries and the rest of the economy is increasing: In 2008, salaries for non-college-educated workers were 49 percent larger in high-tech industries than in non-high-tech industries. This gap underscores why national efforts to boost U.S. technological innovation are important to improving living standards for non-college educated workers. Table 1 lists the 14 high-tech industries that pay non-college workers at least 50 percent more than the national average.

Table 1: Employment and wages of workers without college degrees in 14 high-tech industries^[6]