Steve Hine, Minnesota Department of Employment and Economic Development
Minnesota needs better-aligned,
not more, postsecondary grads in coming years
A Civic Caucus
Focus on Human Capital
Interview May 8, 2015
Tom Abeles, John Adams,
Dave Broden (vice chair), Pat Davies, Paul Gilje (executive
director), Steve Hine, Dan Loritz (chair), Paul Ostrow, Dana
Schroeder (associate director). By phone: Sallie Kemper (associate
director), Clarence Shallbetter.
Minnesota does not need
to increase the absolute number of postsecondary graduates in coming
years, argues Steve Hine of the Minnesota Department of Economic
Development (DEED). Despite the much slower rate of labor-force
growth projected for the state, the challenge, he says, isn't to
produce more postsecondary graduates, but to deliver
better-aligned graduates, whose postsecondary credentials and
fields of study better match the needs of the economy.
Minnesota has always had a very highly
educated labor force, with 60 percent of the state's workforce
holding some sort of college credential, whether an
industry-recognized credential or an associate, bachelor or graduate
degree. But Hine asserts that only 35 percent of the state's jobs
currently require postsecondary education. He notes that many
college graduates are working in occupations that don't require
postsecondary credentials or degrees. These college graduates
displace lesser-educated people from their jobs, since employers
find the more highly educated candidates more attractive. Proper
alignment between college education and workforce needs is crucial
to the employment success of both postsecondary graduates and the
lesser educated, he states.
Hine shares data showing that different
fields of study for bachelor-degree graduates in Minnesota result in
widely different employment outcomes. Graduates in fields like
engineering, for example, are much more likely to be working
full-time after graduation and to be earning markedly higher
salaries than graduates in fields like visual and performing arts or
history. He argues that young people should explore these data
before selecting college majors.
Hine explains that new longitudinal data
developed by the state can show outcomes for recent graduates of
various programs at individual schools. However, he said, some state
postsecondary schools have resisted the public posting of this
Biography Steve Hine is director of the
Labor Market Information Office at the Minnesota Department of
Employment and Economic Development (DEED). He has been at DEED for
He has a master's degree and Ph.D. in
economics from Washington State University in Pullman and a
bachelor's degree from Bemidji State University. He grew up in
The Civic Caucus has released
two recent statements on human capital: one
in September 2014
laying out the human capital challenges
facing the state today and in coming years and a
follow-up paper in January 2015
offering recommendations for maintaining
a high-quality workforce in Minnesota. The Caucus interviewed Steve
Hine of the Labor Market Information Office at DEED about
information on the coming workforce shortage and
on employment outcomes
for people with varying amounts of postsecondary education.
Minnesota is looking at a time of unique challenges due to a much
slower rate of labor-force growth.
This will become increasingly important,
said Steve Hine of the Minnesota Department of Employment and
Economic Development (DEED), as we enter a time over the next 15
years when baby boomers will be retiring. "We won't have the warm
bodies that we've had," he said.
That means, he said, that we must provide
the proper training, education and skills to our young people, who
are going to be asked to replace the people who will be retiring.
In the 1990s, Minnesota had several years
where we added 60,000 or 70,000 people to the labor force each year,
Hine noted. But we're projected to add fewer than that in total over
the next 15 years. "And even that very slow rate of growth in our
labor force will occur only if we take some definitive actions to
keep some aging workers in the workforce beyond age 65," Hine said.
The data don't support some of the
narrative that's been out there about the need for an educated
workforce. Hine said he's been back and forth with Anthony
Carnevale of Georgetown University about the percentage of jobs in
Minnesota that will require at least some level of postsecondary
education. (See notes of May 1, 2015, Civic Caucus i
with Carnevale.) Carnevale
has projected in the past that by 2018, 70 percent of jobs in
Minnesota will require postsecondary education. Hine asserts that
only 35 percent of the state's jobs now require that level of
During Hine's discussion with the Civic
Caucus, he conceded that Carnevale is right in saying that having
some postsecondary credentials is a necessity for gaining the kind
of income people need to sustain themselves. "But," Hine said, "a
significant share of Minnesota's economy is made up of jobs that
simply don't require that level of education and don't provide that
type of income."
Throughout the recession and continuing
today, one of our biggest problems has been the underutilization of
many young people with college credentials. Hine said some of
that is because 17-year-olds don't necessarily make well-informed
decisions on what to study in college.
"It used to be the case that if you had a
college degree, employers were willing to take you on and train
you," he said. "Now employers expect grads to come out with the
skill sets that allow them to hit the ground running. But we have
many grads coming out with majors that employers are not interested
in. We don't have yet the occupational mix that allows these college
graduates to enter into a decent career trajectory."
"The best remedy is a good, vibrant,
strong economy," he said. "We haven't had enough of that." Hine said
he hopes things will turn around for college graduates as we enter a
time of increasingly acute labor shortages.
Minnesota does not necessarily need to
raise the absolute number of college graduates. "That's not our
primary challenge," Hine said. Minnesota has always had a very
highly educated workforce, he noted. The state is fourth in the
nation in high school graduation attainment and 11th in the country
in bachelor's or higher degrees. "The challenge," Hine said, "is to
provide the wherewithal, which includes better information, to
deliver postsecondary credentials that are better aligned with the
needs of the economy."
Hine noted that 60 percent of Minnesota's
workforce has some sort of college credential, with one-third
holding bachelor's degrees or higher. "The jobs that are out there
simply don't necessarily require that level of postsecondary
attainment," he said.
The challenge is, he said, that some of
the graduates' degrees are in majors that don't provide them with
good initial job opportunities. "A lot of research shows that a
person's first job really has a long-lasting impact on his or her
lifetime earnings," he said. "If you come out of college and you
only have a low-paying retail job or a restaurant job available to
you, that can set you back, in many cases, permanently."
An interviewer commented that a video
in the New Economy", produced
for the Minnesota Department of Labor and Industry's Pipeline
Project, asserts that the true ratio of jobs by education required
is 1:2:7 - that is, for every one job requiring a master's degree or
higher, there are two professional jobs requiring a four-year
college degree and seven jobs requiring a one-year certificate or
Hine responded that the ratio contains
rounded numbers. He said faster growth is expected in areas
requiring master-degree and associate-degree levels of education,
but not in areas requiring bachelor's degrees. "Information on the
employment outcomes of various fields of study lines up very nicely
with what we know about which types of occupations are growing and
which are not," he said.
data he had presented
at the North Star Summit in
December 2014 on employment outcomes for recent graduates.
During the 2011-2012 school year, there were 78,675 graduates in
Minnesota earning some type of postsecondary awards: certificates,
associate degrees, bachelor degrees and graduate degrees. Bachelor
degrees made up the largest group of those postsecondary awards,
accounting for 40 percent.
One year out from completing any of the
postsecondary awards, 66 percent of the graduates reported earning
wages, i.e., being employed. But only 42 percent of those working
graduates have full-time, permanent jobs two years out from
finishing their certificates or degrees, Hine pointed out. Even if
the jobs held by recent graduates were full-time, the majority of
jobs they hold wouldn't support a family (two adults, one of them
working full-time, and a child) at a minimal standard of living.
The median wage two years after graduation
for all of these postsecondary award-winners was $18.85, ranging
from $15.30 for those with certificates to $19.30 for those with
bachelor degrees to $31.48 for those with graduate degrees.
Many college graduates are working in
occupations that don't require postsecondary degrees. For
example, Hine's data show that 26 percent of people in Minnesota
working as retail salespersons and 25 percent of people working as
bartenders have completed four or more years of college. He said as
college graduates exhaust college job options and move down to jobs
not requiring a college certificate or degree, they displace lesser
educated people from their jobs. Employers find these educated
candidates attractive, even if their education is not required for
the job. Hine concluded that proper alignment between college
education and workforce needs is crucial to the employment success
of both college graduates and the lesser educated.
Different fields of study for
bachelor-degree graduates in Minnesota result in widely different
employment outcomes. Hine's data show that much higher
percentages of people educated in six "well aligned" fields (such as
engineering; the health professions; and business, management and
marketing) are working full-time, year-round two years out from
graduation than those in six "poorly aligned" fields. And the well
aligned workers are earning salaries markedly higher than those in
the poorly aligned fields (such as visual and performing arts;
history; and theology and religious vocations).
Hine noted that encouraging exploration of
would be very helpful to young people
selecting college majors and to incumbent workers looking to change
careers. The data would allow students to better self-select into
areas with more opportunities.
But he reiterated his assertion that most
jobs of the future still will not require postsecondary
education. However, he added that as job growth and labor-force
slowing continue, expanded access to education and training by our
disadvantaged populations will be increasingly necessary to fill
those jobs that do require postsecondary education, the kind
of jobs that lead to continued growth and prosperity.
It's a fool's errand to try to project
what the economy might look like 10 years from now.
"Some things are hard to project," Hine
said. "What is the next big thing?" Technological changes such as
Big Data, driven by the Internet, can be used for understanding the
structure and trends in our economy, he said. "We're in our infancy
in that respect. That's going to be an increasingly important source
"We rely now on surveys," Hine continued.
"Those are expensive and we've seen in Congress disturbing efforts
to vastly reduce the extent to which we can continue to collect and
produce that information." At the same time, though, he said, there
is bill in the U.S. Senate that would require employers, who now
report the number of employees they have and the wages they each
earn, also to report the occupation of each individual employed at
"The way of collecting information that
we're moving toward is going to become important to all of us," Hine
said. "The ultimate objective from a policy perspective is to say
what the economy will look like in the future."
The federal government has been providing
funding for development of state longitudinal data systems that
would connect educational records with employment records on each
individual employee. Minnesota launched its data tool less than
a year ago, Hine said, well ahead of the curve, compared to most
"When you put this information in the
glaring light of day," he said, "some programs don't look very good.
There's been a great deal of resistance by higher education to
making this broadly available. That's been a challenge. We do see a
lot of institutions that are very committed and invested in using
this kind of information, but it's new. We will see an increasing
acceptance and use of it."
The Twin Cities have really been the
primary source of strength through the recovery. As our labor
force ages and young people migrate to areas of geographic
opportunity, Hine said, to a lot of rural Minnesota face real
challenges. But some of our smaller MSAs, such as Rochester and St.
Cloud, are doing very well.
"Smaller towns and rural areas, not only
in Minnesota, but nationally, are going to have acute challenges as
the labor force ages," he said. "And those are areas that already
are quite a bit older than more urban areas."
Rising inequality is a concern and our
political system seems to be incapable of dealing with it.
Increasingly, inequality is impacting people along racial lines,
Hine said. There are groups in our population that have never had a
standard of living that allows postsecondary training. And it's
increasingly out of reach to them, he noted. The proposal in the
state Legislature to provide two years of college at no cost to
people who haven't had that opportunity would be a step in the right
direction, he said.
One of the challenges we have to address
is the mechanism we use now to match job seekers to jobs. Hine
said the old process of job applicants going through the want ads
and sending in their resumes or going into a business and indicating
face-to-face their interest in a particular job has been replaced by
applicants "dumping their resumes on some job board." He said the
job board will use some type of algorithm or key word match to link
applicants' resumes to job opportunities. "Sometimes, they don't
even know they've applied for a particular job," he said.
"A lot of the inability of college grads
to find suitable jobs is the mechanism by which we go about matching
them to jobs," he continued. "How do people know if the job they're
suited for is on one of tens of thousands of job boards?"
There is strong evidence of benefits of
closer ties between businesses and higher education. An
interviewer asked Hine about the recommendation from the U.S.
Chamber of Commerce that business take the leadership on solving the
skills gap by pinpointing its workforce needs and identifying
educational institutions that are helping meet those needs as
"preferred providers." (See April 17, 2015, Civic Caucus
interview with Jason
the U.S. Chamber of Commerce Foundation.) Hine said he applauds the
Chamber for its recommendations, since closer ties between business
and higher education have many benefits. He noted that both the
Carlson School at the University of Minnesota and the University of
St. Thomas do a good job of connecting with businesses in the
The 1990s showed us how attractive
Minnesota can be as a destination for international migrants and
domestic migration. Both types of migration, Hine said, respond
quite readily to economies that have opportunities for young people.
"We're well positioned here," he said, "as an attractive destination
for young people. We have a vibrant economy and attractive
amenities. I'd be hard pressed to find any areas that are glaring
One possible saving grace for rural areas
is that increasingly, location doesn't matter. We can
telecommute, Hine said. And efforts to expand broadband access are
steps we can take to make locational decisions less crucial.
There is some pressure from the
Legislature that DEED produce data on employment outcomes of
graduates by school and by program. Hine said it is unfortunate
that some state postsecondary schools have resisited the public
posting of this information. He said the longitudinal data system
DEED launched within the past year has postsecondary educational
records going back to 2006. The data include public, private
for-profit and private nonprofit institutions, as well as career
"Right now, we can describe the employment
outcomes of that portion of the workforce that has graduated from
some type of postsecondary program over the last eight years," he
said. "It's a start."
Having fewer people available for jobs is
going to require doing things and thinking about things in a way
we're not used to. "We've been very used to making business
decisions, career choices and policy decisions in an environment of
a relative surplus of available workers," Hine said. "But we're
going to be in a different environment, one where workers are in
relatively short supply. That will change the way employers will
have to think about things. Employers will have to compete much more
than they've had to in 30 years, which will be of great benefit to
job seekers and people already in the workforce.
But even with workforce shortages, Hine
said young people choosing careers will have to be better informed,
so they can choose majors that will give them career choices. "Bad
decisions will still translate into bad outcomes," he said.
The Civic Caucus
is a non-partisan,
tax-exempt educational organization. The Interview Group
includes persons of varying political persuasions,
reflecting years of leadership in politics and
business. Click here
to see a short personal background of each.
S. Adams, David Broden, Audrey Clay, Janis Clay, Pat Davies, Bill
Frenzel, Paul Gilje (executive director), Dwight Johnson, Randy Johnson, Sallie
Kemper, Ted Kolderie,
Dan Loritz (chair), Tim McDonald, Bruce Mooty, Jim Olson, Paul Ostrow, Wayne
Popham, Dana Schroeder, Clarence Shallbetter, and Fred Zimmermany,