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Meeting Labor Demands by Improving Education Access For Home-grown Talent

Although California’s modern economy has relied heavily on highly skilled out-of-state U.S.-born and immigrant talent, a newly released study by the Public Policy Institute of California says that meeting state work force needs over the next two decades will require sharp increases in the production of college-educated native Californians.   

In “Can California Import Enough College Graduates to Meet Workforce Needs,” authors Hans P. Johnson and Deborah Reed “assess whether the state will be able to attract enough college graduates from other states and other countries to meet the projected economic demand” for highly skilled workers. But one major obstacle is California’s high cost of housing, which is believed to have “made the state less accessible to residents of other states,” according to the study.

“We conclude that it is extremely unlikely that the projected need for highly skilled workers will be met mainly through the increased migration of college-educated workers,” the authors write. “However, increases in college participation and graduation among California residents could help meet these future demands.”

The authors show that in 2005 only 30 percent of California adults 25 years of age and older had attained a college degree, making it 12th among U.S. states. They estimate that if economic growth trends hold true “two of every five jobs (41 percent) will require a college graduate” in the year 2025. However, their data reveals that while annual net migration of college graduates to California necessary to meet projected economic growth is 158,400, annual net migration of college-educated immigrants to California was just 55,760 between 2000 and 2005.

“There’s a gap or mismatch between the future demand for highly educated workers and the supply of such workers,” says Johnson. The state will meet that demand for new workers “only if it attracts college graduates in unprecedented numbers, and judging by recent trends this seems unlikely.”

For decades after World War II, non-native Californians comprised the majority of the state’s college-educated work force. The postwar years saw the California economy surge as the state became a world leader in the aerospace, semiconductor, software and other high-tech industries. In 1960, 1970 and 1980, non-native, U.S.-born citizens made up 66, 64 and 53 percent, respectively, of college-educated California residents. By 2005, the U.S.-born, non-native Californians were 33 percent of the college graduates in the state.

In more recent years, the ranks of foreign-born state residents with college degrees have increased enough to become a substantial share of California’s college graduates. In 1960, foreign-born residents were just 8 percent of California’s college-educated population. By 2005, they accounted for 31 percent of the state’s college graduates, according to census data used in the study. The study, which references the immigration reform legislation that the U.S. Congress is currently considering, says it’s highly unlikely that reform measures to increase the numbers of skilled workers allowed into the U.S. will result in a sufficient flow of educated immigrants to California.

“I think there are people [in California] who think we’ll be able to import [highly educated workers,] and that will be the solution. But there are certainly limits to that just in terms of internal growth in the state and also for what it’s doing in widening income inequality in the state. You can imagine if you’re not doing enough to educate your own population and producing people who can’t compete for these jobs and then you’re importing people for those jobs; you’re creating two classes,” says Dr. Cecilia Conrad, the newly appointed faculty dean at Scripps College and an economics professor at Pomona College in Claremont, Calif.

The study’s authors noted that the achievement levels of the state’s K-12 students could be raised significantly, especially among Hispanic students. Johnson says pessimistic predictions of the fate of California’s work force are exaggerated.

“What we’re saying here is not a gloom-and-doom scenario for the state’s future 

 What we are saying is that if the supply of workers is not there to meet that demand, the state’s economy will be less skilled than we would have otherwise expected. That doesn’t mean that we will be less skilled than we are today. In fact, we think we will be more highly skilled than we are today, but not as good an outcome as we might expect,” he says.

Conrad says that while the PPIC study has put forth a critical issue before the public and the policy makers, it tells a familiar story that Californians have already heard from economists and demographers about the need to improve K-12 education in the state. 

“I completed a similar report on this topic six, seven years ago,” she says. “I’ve been in the state 11 years; we’ve been talking about this issue for 10 of those 11 years. I don’t think a lot has happened. We’ve been slow.”

The study is the latest in a series of reports in the PPIC’s California 2025 project, which documents major trends and forces shaping California over the next two decades. Based in San Francisco, the PPIC is a private, nonpartisan research organization aimed at improving public policy in California. Visit for a copy of the study.

-Ronald Roach

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