Report: Economy Will Face Shortage of 5 Million Workers in 2020

Researchers say the nation's postsecondary education system can't keep pace with projected job growth.

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As the economy continues to slowly recover and millions of job openings are expected to appear over the next decade, there is a growing call for more educated workers to fill those positions. But the current higher education graduation rate is stagnant, and the economy will face a shortage of 5 million workers with the necessary education and training by 2020, according to a study from researchers at Georgetown University.

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Over the next several years, 55 million jobs will become available, researchers at Georgetown University's Center on Education and the Workforce found in a study. The majority of those jobs will require some sort of education and training after high school, but without major changes to the nation's postsecondary education system – which includes community colleges, four-year institutions and technical and career schools – there will not be enough workers to fill those positions, the report says.

"If we look at how many degrees we are conferring per year and compare that to the job openings, there's a disconnect," says Nicole Smith, a co-author of the report. "We have no reason to believe there will be a huge increase in graduation rates."

Overall employment is expected to increase by about 24 million to 164.6 million in 2020. The other 31 million positions will open up due to baby boomers retiring, the report says.

And of the nearly 165 million jobs, 65 percent will require some sort of postsecondary education or training, up from 59 percent in 2010. In industries like information technology and government, 80 percent of the jobs will require more than a high school diploma.

The researchers' job growth prediction is a middle-of-the-road estimate. The Bureau of Labor Statistics estimates that there will be 163.5 million jobs in 2020, while Macroeconomic Advisors predicted 168.1 million, according to the report.

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Though sales and office support occupations will still make up the bulk (14 million) of all jobs created, they will experience some of the slowest growth over the next few years. Healthcare professional and technical, healthcare support, STEM, community service and education occupations will be the fastest growing, with increases ranging from 24 to 31 percent in each area.

Nearly 80 percent of those occupations will also require high levels of postsecondary education. Healthcare support is the exception, with only 59 percent of those positions expected to require a postsecondary education.

Smith says the worker shortage will cause wage premiums to rise, as employers "try to lure the most educated workers," she says.

"It creates this artificially high wage premium to people with the training that's required," Smith says.

But wages may not increase in all occupations. The problem with having areas like healthcare support grow so quickly is that the wages are already lower because many of the positions do not require a higher education.

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"It's difficult to get family-sustaining wages in healthcare support," Smith says. "When we talk about healthcare growing quickly, we need to be careful about which aspect of healthcare."

The study also found that for new jobs, cognitive skills – such as leadership, communication and analytics – will be more in demand. By contrast, physical skills have declined over time, with the exception of near vision, which is necessary to read computer screens.

"The move toward making people both college-and-career-ready essentially amounts to finding ways to ... help develop a flexible, adaptable individual with the skills appropriate for surviving in the 21st century," the report says.

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