December Jobs Report Highlights Need for Skilled Employees

Positive report masks distressing situation for low-skill employees
  • Publication Date: January 2005

  • Topics: Minimum Wage

Washington – Today’s jobs report closes out a positive year for the labor market with 157,000 jobs created during December and 2.2 million jobs created for the year, marking the best year for job creation in 5 years. While the overall job picture continues to improve, the nation’s lowest skilled employees are still facing a difficult job market. Both the monthly and the annual figures clearly demonstrate that skill level is vital to both securing and retaining employment in America.

Across the nation, adult high school dropouts are facing an unemployment rate of 8.3% in January. This is over 50% higher than the national rate of 5.4%. In contrast, employees with a college degree have an unemployment rate of 2.5%–50% lower than the national average. Even employees who only have a high school degree have an unemployment rate 10% lower than the national average. These numbers highlight the fact that the labor market is facing a growing skills gap and it is critical that policymakers concentrate on more than just overall employment numbers.

In addition to high school dropouts, other vulnerable employees such as teens (and particularly minority teens) faced exceptionally high unemployment rates. In December, teen unemployment was 17.6%, with African-American teen unemployment at 30.8%—over 470% higher than the national rate.

The most recent employment numbers make it clear that skill level remains one of the most accurate predictors of success in the labor market. Individuals with little employment experience or education have unemployment rates that are demonstrably higher than their counterparts. Research shows, however, that these low-skill individuals receive significant wage increases once they are able to cross the gateway into the labor force. Economists at the University of Miami-Ohio and Florida State University found that 65% of these entry-level employees receive raises within the first 1-12 months of employment.

“Rather than concentrate on the positive total employment numbers, we must focus on the growing skill gap facing our workforce,” said Craig Garthwaite, director of research for the Employment Policies Institute. “As our economy continues to evolve and create higher skilled employment, it is critical that we develop the skilled employees for these jobs.”, a website focusing on the crisis in entry-level employment, provides regularly updated statistics detailing the employment market for entry-level employees and vital information about a host of government assistance programs designed to promote employment and economic success.