Dropouts hit hardest by loss of jobs | NevadaAppeal.com

Dropouts hit hardest by loss of jobs

John Seelmeyer
Northern Nevada Business Weekly

In 2004, right in the middle of the state’s economic boom, an estimated 4,000 Nevadans without high school diplomas were looking for work, a figure that translated into a 3.8 percent jobless rate for that group of workers.

In fact, the unemployment rate for workers who had dropped out of high school in those days was a little better than it was for workers who’d taken some college classes or finished a community college degree.

But an estimated 28,000 of those workers without a diploma would lose their jobs by 2010, and the jobless rate among high school dropout in the state today is 67 percent higher than the national average among workers who don’t have diplomas.

In that same boom-era year of 2004, an estimated 6,000 Nevadans with college degrees were looking for work, creating a jobless rate of 2.5 percent in that sector.

Even though the recession’s scythe would cut across all sectors of Nevada’s economy, it cut far less deeply into the ranks of the college educated.

About 14,000 more college-educated people were unemployed in 2010 than 2004 – a pace of job loss that’s half of that experienced by the most poorly educated group.

Everyone knows that the job prospects always are much worse for high school dropouts, and most folks think that a college degree provides some protection from joblessness.

That commonplace wisdom is particularly true in Nevada these days.

And while plenty of ink has been devoted to Nevada’s sky-high jobless rate – worst in the nation at 13.4 percent in August – less attention has been paid to the dramatically lower impact of unemployment on well-educated Nevadans.

Among dropouts in the state, the jobless rate ran 23.4 percent during 2010, says the U.S. Bureau of Labor Statistics.

For folks with a college degree, however, the jobless rate last year averaged only 6.4 percent.

That 18-percentage-point spread between the jobless rates for dropouts and college graduates in Nevada compares with a spread of less than 10 percent nationally.

Across the United States, the unemployment rate among the college educated is 4.2 percent. Among those who haven’t completed a high school diploma, it’s 14 percent.

But measured another way, Nevada isn’t all that unusual.

The jobless rate among people with less than a high school diploma in the state is 3.4 times higher than the unemployment rate among college educated.

Nationally, the jobless rate among dropouts is 3.3 times the rate of the college educated.

Economists suggest a couple of reasons that the jobless rate rose so quickly among Nevadans who didn’t complete high school.

For one, Nevada industries such as construction, hospitality and gaming that use large numbers of relatively unskilled workers have been among those hardest hit by the recession.

“Of all the jobs lost in Nevada during the downturn, roughly one of every two was from the construction industry, a disproportionate share considering even at its peak construction employment only made up about 11 percent of total employment,” says Bill Andersen, chief economist in the research and analysis bureau of the Nevada Department of Employment, Training and Rehabilitation.

A slightly different take comes from Perry Wong, senior economist for City National Bank, a Los Angeles bank with extensive operations in Nevada.

Wong says that the regional economies in the United States that have fared best during the recession are those with strong ties into the global economy and those that effectively harness their intellectual horsepower.

The San Francisco Bay region, for instance, is recovering well from the recession because its technology sector sells products that rely on intellectual property to customers across the world.

The Reno market, Wong notes, never has carved out a position as a worldwide gaming and hospitality destination. Combine that with the relatively low levels of education required for many positions in the industry, and low-educated gaming workers are in high danger of losing their jobs during a recession.

And while global exports from Nevada manufacturers – many of them located in Carson City and Reno – have been a bright spot for the region’s economy, relatively few of those products utilize technology that requires highly trained workers.