What's Going on with the Workforce?

Michael I don't know what it's like where you live in Boston, but wherever I go around D.C. these days, I see help wanted or we're hiring signs everywhere. Labor is scarce. But this just isn't a story about the economy and the pandemic. It has real implications for higher education, doesn't it?

That's absolutely right, Jeff. Because at the root of a lot of these problems is the need for upskilling and reskilling adults to meet the demands of a changing economy and workforce or to help them follow their own passions. To help us understand exactly what's going on right now, we're welcoming Ben Castleman, who writes about economics and other business topics for the New York Times, and Rachel Romer Carlson, the CEO and founder of Guild Education, which works with employers to pay for their employees education.

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I'm Jeff Salingo.

And I'm Michael Horn. As the economy rebounds from the pandemic, we're seeing a war for talent emerging. Many workers are saying they don't want to go back to the jobs they held pre pandemic. And at the same time, there's also been an acceleration of employer investments in technology and automation during the pandemic, which is fundamentally changing the nature of work and has led to a more urgent need for those new skills. That's led to a surplus of job openings, nearly 11 million, with a paucity of employees to fill them, roughly eight and a half million. This has significant implications for higher education for many reasons. Among them, number one, people want to switch jobs and careers. Two, the nature of work is changing, and three, as we stare down a shrinking population of high school graduates in many regions of the country starting in 2025, many institutions are looking at likely enrollment declines and the need to better serve working adults. And the answer for all three is more education and novel upskilling and reskilling solutions.

Yeah, so to help explain these issues and just what is going on in the economy today and what it means for higher education. We have Rachel Romer Carlson, a second time guest on Future youe and founder and CEO of Guild Education, which operates as a payments platform and marketplace to help employers pay for their education. And of course, we need to say here, Michael, that you serve as a senior strategist, Guild.

Yep, Jeff. And I'm looking forward to us getting to ask Rachel the questions during this time together as opposed to her asking and grilling me.

Yes. And we also have Ben Castleman from the New York Times who writes about economics and other business issues and who is really one of my favorite people to follow on Twitter because of his ability to explain what's happening to people like me who haven't taken an economics course since my freshman year of college. So, Michael, let's get started with Ben and Rachel and welcome them to Future youe Know,

so Ben, it's been a strange moment for the US Economy. The jobs market hasn't come back perhaps as fast as people had expected. There are a lot of job openings for which employers are actively searching and saying that they're having trouble filling roles. And you appeared, of course, in the podcast the Daily about five months ago and basically said, hopefully we'll know more in six months about what's going on to explain a bunch of paradoxes like this in the economy. So we're perhaps not yet at that milestone, but set the scene a little bit for us. What do we know and not know so far about what's going on? You know, what are the big outstanding questions and mysteries with this rebound so far, specifically as it pertains to jobs and working adults?

Can I get another six months? So look, I think it's interesting that you sort of frame it as the jobs rebound has not been as strong as we might have hoped, because in one sense that's true.

Right.

If we think back to sort of that moment in the spring when we were starting to see vaccinations and we kind of had this idea that the fall was going to be this sort of miraculous return to normal and kids were back in schools and we were all back in our offices, it is sort of disappointing relative to that in another sense. Right. It's an amazing jobs recovery that we've seen. If you think back to kind of any moment of last year, if I had told you that the unemployment rate would be as low as it is now, we lost 22 million jobs in a two month period in the spring of 2020. We've regained more than three quarters of those to date. So in one sense, right, we've actually seen a pretty remarkable jobs rebound now. We've seen a slowdown recently that I think we can point to Delta pretty clearly as being a part of. So let's set that aside. There is still this issue that you're referring to, right, that there are a ton of jobs out there and employers are having trouble filling them. And I think that's a real thing. You know, we've heard these complaints from employers in the past, or I think we've been a little bit dismissive of. This is a moment where I think genuinely employers are having a difficult time finding workers. The initial explanation a lot of people pointed to were these unemployment benefits. I think we. Now this is where really, when I was talking on the Daily a few months ago, we were saying this was going to be the big test. We've kind of run that test and I think we know pretty conclusively that whatever role the unemployment benefits were playing was not a huge one. Right. That was not the dominant force that was keeping people out. So then what do we have? You know, I think we have some of this is sort of still immediate coronavirus related stuff. Right. People who are either reluctant to return to work, maybe they've got kids at home who are unvaccinated, maybe they've got parents, people with conditions where they're particularly vulnerable, maybe they've got childcare issues. Right. I think like anybody who's got kids right now knows that childcare has not returned to normal, even if the schools are nominally reopen. So that's part of it. I do think that there's. And we can get into this more. I do think there has been some, some sort of kind of reset for a lot of people where that time away from work or from the day to day office has kind of caused them to rethink their priorities, the way they approach work. And they also have the means, in many cases, not all cases, to hold out a little bit and to say, I'm not going to go back to exactly that job that I had before. And so that is sort of one tension that we're seeing where there's sort of a bit of a standoff between workers and employers and it's going to take some time to kind of see. See how that plays itself out.

So, Rachel, you work with a lot of large employers, Walmart, Target, Chipotle, Disney and others, and particularly with their frontline workers. So what are you hearing and learning from your employers? Is it matching some of what Ben

is saying, it aligns really closely. I share a really similar view to Ben's on this, which is, I think it's pretty remarkable how quickly things have come back. But what I'm hearing and seeing in the front line is that mix of still Covid related impacts, particularly for women who aren't coming back because of childcare crises or just because at any given moment your kids school could shut down and then you have to be back at home. And for most of the economy, work from home is not a reality. Right. They work on the job boomers. I think we still see a massive population of boomers who haven't come back into the workforce. And it's unclear if that's Covid related or related to a reshifting in their expectations of how they want to live their life or, or just a skill shift of now they're not totally sure what the job is they want to go back to, but they're not sure if they have the skills for another role. But I think it's been pretty remarkable. Broadly. I think what we're seeing in terms of the front line specifically is a focus on, I call it the three P's. What is their package, what is the purpose of the work and what are their pathways? I think package has changed in that a $15 an hour wage has basically become a commodity the same way health care benefits had slowly become a commodity over the first 15 years of the 2021st century. I think that's awesome for workers and I think that means companies now have to figure out, okay, what's our differentiator? That's where purpose comes in. We know that Gen Z and Millennials are thinking very differently about the purpose of their workforce and their work on a day to day basis. And then lastly, pathways. We know that Millennial and Gen Z want faster pathways than their parents did in terms of their career. And they want to know that they're constantly learning and constantly growing. And in my work, I have a front row seat for how much of a differentiator that' come for companies who are willing to offer pathways for their employees.

So Ben, I want to, I want to lean into that a little bit because you had mentioned this idea of this passion as well about what people really want to do. Right. You know, we've seen a lot of stories about how people just don't want a job that pays above minimum wage. They, they really want to do something about what they're passionate about, if they're going to work or something that allows them to grow through some sort of clear career pathway. So what are you seeing in the data, Ben, that suggests that maybe this is a broader phenomenon more than something that's just anecdotal?

I confess I sort of approach this with a little bit of skepticism in that I think workers have always wanted a lot of these things. They haven't always had the leverage to get them. And, you know, I'll talk about that in a second. I also think, look, younger workers have almost always wanted pathways. They want meaning in their work. If you go back and you read stories from the era when the baby boomers were entering the labor force, there are all of these stories from then that are about how the baby boomers, now they're entering the workforce. They just want everything now, now, now. And like, you could almost like find, replace, you know, baby boomer replaced with, you know, Gen Z. So I have sort of some caution about this. I do think that for a variety of reasons, the experience of the pandemic has given a lot of people a moment to sort of reevaluate. Right. So we were seeing that with white collar workers who are saying, I don't want to go back to sitting in traffic or crowding onto a crowded subway car every day to go and sit at a desk and do work that actually I could be doing at my kitchen table. We're seeing that, you know, in a lot of frontline workers who are saying, you know, I'm not going to go back to a job where I'm getting called an hour before my shift to say show up or I'm getting sent home after two hours when it's slow and all of a sudden I'm not getting the paycheck I was expecting. You know, we're definitely seeing that stuff, and I think we are seeing that a lot of people actually were able to build up a little bit of savings during the pandemic. This is certainly not universally true, but a combination of reduced spending during the pandemic, government benefits, in some cases, people who are lucky enough to own homes or have stock portfolios. Right. I've seen those go up. And that just gives people a little bit of flexibility to say, I'm not going to take the first job that comes along. I'm not going to agree to a job that I don't want to do. And whether they're demanding meaning, or they're demanding pathways, or they're just demanding better benefits or better flexibility or better pay, the key thing is that workers have some leverage right now in a way that they frankly haven't in a long time. And companies, because they're having a difficult time hiring, are being forced to adapt to that in one way or another. Whether that lasts, whether that moment of leverage sticks around, I think is a really open question. But it's here right now and workers sense it.

So I want to dig a little deeper on that choice, Rachel, because employers have choice too, right? To attract potential employees, they can offer perks and benefits, such as paying for their employees educations, or they could use those dollars and perhaps offer higher salaries. So one argument might be that you could take those dollars and pay everyone higher salaries and they could choose most efficiently where to spend them, whether that's on more education, childcare, food or whatnot. And everyone would benefit as just opposed to those who choose to sign up, for example, for the education benefit and take advantage of that benefit specifically. So let's focus specifically on education. Why do the employers you work with choose to offer the dollars earmarked for education, in essence, and have their employees choose from your learning marketplace of academic providers?

At the macro level, I think we have to be careful not to let employers off the hook on a zero sum argument. Fortune America is doing better than it's ever been doing and their budgets are pretty frothy. And I think there's room for increased wages and differentiated benefits. So increased wages lift the floor, right? We all know that. I believe in them. I imagine most of us on this call do. And we're seeing that what differentiated investments in your employees do is lift the ceiling for workers. And so, for example, in the case of targeted learning and development programs or specific education programs, I'm a believer that the foreign 40 is dead, where we go to school for four years and then we work for 40. And I think our labor data tells us we're now in an where the average frontline worker is going to have to be learning new technical skills in some form or fashion every four to five years. Well, that means that at most you maybe have 25% of your population intensely reskilling or upskilling every year. So that's a very differentiated specific benefit applied to people in a point in time or and benefits almost. I hate the word perk because we don't call healthcare a perk. And healthcare was designed to invest in your body when your body was the unit of production. L and D on the job is investing in your mind in a knowledge economy where your mind is the unit of production. So I think we got to move out of that. Like, yes, ping pong tables and kombucha are perks and I can shame my friends in tech for creating that nonsense. But for employees in the front line, these have to be core investments in the total rewards package. But they also need to be part of the pathway of saying this isn't just a dead end $15 an hour job. And, and I think that's the part of the conversation that's missing is we need to be talking about the second wage and how do you get to the second wage? And the way you get to the second wage is by lifting the ceiling, not just lifting the floor.

So, Ben, I want to tee off what Rachel just said, and I'm curious your take on it because part of the implication of that every four years rhythm is that, you know, the nature of work is dramatically changing. We're seeing investments in technology and automation in the workforce, and that's changing the nature of jobs themselves. And I'm curious what you're seeing in the data in terms of how that's impacted across different industries, the impact on individuals needed skill sets to do these jobs. And is that causing employers to think more seriously and strategically about education and upskilling as that needed investment?

Yeah, so I think it's really interesting. I think the pandemic has accelerated a lot of trends that were already in place. And then it's also potentially created some new trends.

Right.

So we know, for example, that on the consumer demand side, right, there's been a huge shift towards shopping online. Right. You know, that was something that was already taking place that's going to shift what we need in terms of work, in terms of how many employees we need in malls versus in warehouses. Right. That was already taking place. It's just happening faster. The shift towards working from home, right. Has created a need for all sorts of technologies that come along with that. And that's going to change the, the demand for skills. But again, pushing along something that was already happening, we've also seen a couple of other things. We've seen companies that made adjustments directly in response to the pandemic that they probably would not have made otherwise, but may now keep around. Right. We saw hotels eliminate daily maid service. And a lot of them are saying, we may not go back to that. We've seen, you know, you go to a restaurant now and you scan your phone for a QR code and you look at the menu that way, maybe even order that way. You know, some of that may edge back as we get back to normal life, but some of that is probably going to stick around. We also know that historically companies have used recessions as an opportunity to automate. You know, it's awkward to fire a bunch of your workers and replace them with robots. But if you're firing a bunch of workers because it's a recession, then when you bring things back, you bring back more robots, more automation. You know, it's also awkward to shut down your. Difficult to shut down your production lines in the middle of a busy season. But if you're going to be idle for a while anyway, it's an opportunity to bring in new technologies. So I think we're seeing all of those things and in many cases exacerbated by the labor challenges that they're facing. What we'd like to say is, okay, what that's going to result in is companies going and really investing heavily in their workforces, investing in training, investing in education. We're obviously seeing some anecdotal stories of that. Amazon was doing a lot in this even before the pandemic, and they've announced even more during it. You know, Walmart and Target, we're seeing some announcements, I don't know that we're seeing yet a lot of widespread evidence that companies are really investing heavily in sort of serious training credentialing. Over a long period of time. We've seen a decline in spending at the corporate level on, on training and upskilling. And I don't think we've seen a lot of evidence yet that that's reversing in any kind of wholesale way. Maybe it will.

So, Rachel, I want to bring this back to higher education a bit because almost every day I'm speaking to a college president or I'm speaking to people who sit on college boards. And I will tell you, they seem really confused right now about what's going on with the employer market and kind of where they fit in. Right, where higher education fits in. Because historically, as we know, employers had these benefits programs that were pretty unstructured and from which employees could choose where their. Where to spend their dollars, like wherever they found useful. Right. I. This is how I got my graduate degree. They basically gave me a blank check every year. And I went and shopped around and found a college willing to take it. And that's how I got my degree. So, so they would just advertise their continuing education programs and whatnot directly to working adults. We see this in airports. We see this on the subways and different cities. So when I talk to them and when I mentioned, you know, things like Guild, they're not quite sure. What Guild and its ilk represent and how as institutions they should engage. So what's different about employers that work with a GIL type entity and what happens to the academic programs and institutions, for example, that don't have a partnership with someone like Guild?

I think what's changed most since Guild and the other organizations that do similar work to us came onto the scene is that we have helped both the student have a more structured decision making process about where and how they go to school that isn't primarily dictated by the Google and Facebook ad.

Right.

Because we know that that's the number one driver of the decision. If you're going to a top 100 school, what drives your decision is the US news and world Reports. And if you're not, what dictates your decision is either the community brand you're most aware of. And that's more common for the first two years of college. And beyond that, whoever serves you the best. Google and Facebook ad. And to be clear, that means whoever paid the most. So that's how we've handled the distribution of education to working adults up until this point in America. And our view is that we can empower students with a structured decision making process that starts with what skills do you have today? Where do you want to take your career? What skills do you need to get to that point in your career and then back into the education. So it's what we call a career first conversation rather than a program first conversation where people say I think I should get an MBA or I think I should get a master's in college comms that then matches to what employers want. Right. Because employers think much more about skills and competencies today. And they think about what do we need our workforce either to gain for themselves? And that's the reskilling value proposition that we offer employers is they're using us as their reskilling partner. The other is they're using us as a talent partner where they're saying, hey, we actually don't care what our employees are learning. We care that they're learning so that they stay with us for three, four, five years and and pursuing their goals. And a great example of that. I actually really like this Taco Bell's talent philosophy. This is their talent philosophy is start with us or stay with us. And their point is if we're your first job when you're 16 and we can help you then pay for your first couple years of college and then you become a nurse, awesome. Or if you want to become a manager of a TACO Bell or a Chipotle, for example, believe it or not, there are so many hundred thousand dollars jobs running restaurants around the country, people just don't know that. And if that's the career path you want, you want to be a manager of a restaurant and lead a $2 million piano, we've got a pathway for you on that too. That's the conversation that's happening. And what higher ed has to decide is how they want to plug in to that workforce skills and competency conversation. But I think this game of selling really expensive master's degrees, based on the name of the degree and the brand of the school, I think that's reaching its end of its era.

Well, we've seen a lot of stories about student debt in terms of that too. So it's an issue that we've talked a lot about on future you as well. So Ben, we've been obviously talking a lot about employers and traditional employers here, but you've also written about how US Entrepreneurship during the pandemic has seen somewhat of a resurgence. And I'm just wondering what is happening and who is driving that because I'm curious about this because we've seen colleges and universities offer many more undergraduate courses, programs, extracurricular activities that all promise to cultivate that entrepreneurial mindset and develop skills needed in this startup world. But the problem as I talk with college leaders about this is that it's usually the engineering and business students who are interested because they think of, you know, the Silicon Valley garage and not the dozens and dozens of other majors on campuses. So I think they're really interested in, again from our listeners who are, who are lead colleges and universities about what's happening right now with US Entrepreneurship and who is driving it.

Yeah, I mean, so I think it's worth going back a little bit before the pandemic here, which is that before the pandemic we were in the US In a decades long startup slump. The rate of entrepreneurship in this country had been declining since certainly around 2000, potentially back to the 80s, depending on how you measure it. That's very surprising to a lot of people. We think about this as this era of startups. We hear about the Facebooks and the Googles and think that this is a time where everybody's starting a company, but it's very much the opposite. And there are real risks to the economy that come from that. There are a lot of economists who have been looking at this and saying this is part of a general sclerosis in the economy. People actually changing Jobs less often, moving less often, less flexible economy. And so in that context, sort of seeing a lot of these programs at colleges and universities to sort of encourage entrepreneurship, encourage an entrepreneurial mindset I think are really interesting. What I haven't seen is a lot of evidence that they're particularly successful. And you know, we don't have a great understanding of why it is that entrepreneurship had been declining for so long in this country. But most of the evidence is that it was not that there weren't people who were interested in starting companies. It was a risky endeavor. Right. We've seen health insurance being tied to your employer makes it difficult to go and leave a job. Two income households make it difficult to pick up and move across the country.

Student debt, I would imagine student debt

is clearly a factor in the wake of the last recession. Of course, debt levels and declining housing values made it difficult to borrow money in order to start coming. There are lots of different factors here. Demographic change. None of those are things that are going to be changed by an undergraduate program in entrepreneurship or in a startup club at your school. That doesn't mean that those programs have no value to them. But it's not clear that that is what is going to sort of drive that larger change. Now we have seen in the pandemic a real surge in startup activity. You know, some of that may be just sort of very short term stuff, right? You lose your job or you're at home, right. It's a lot easier to like Google how to start a company when you're like at home without your boss looking over your shoulder. Right. So definitely I'm not. My boss is listening. I'm not doing that as we speak.

You're going to start one of those newsletters, right? Like every.

That's right. I'm going to leave for substack. If you look through the list of the most common names in startups in the past year, right. There are lots of things around sanitization and you know, face masks and things like that. But there's also evidence that actually when people were given some financial resources and they were given some time, that they did actually take the opportunity to start businesses. Some of those directly related to the pandemic, but a lot of them not. And so, you know, that is a suggestion that if we could do some of those things, if we could make sure that people had the resources that they needed, the flexibility that they needed, kind of destigmatize it in a way that that would actually encourage this much more than I think, just sort of an undergraduate level program or club would.

Yeah. And I think a lot of that is marketing around to try to attract students, especially students whose parents think they need some sort of job coming out of college. And being an entrepreneur is not a bad one. Go ahead, Michael.

Well, I was going to say it may be a good way to switch as we wrap up here, which Rachel. So if that's what higher ed maybe can't impact, what can they do better to better serve working adults? From what you're learning out there in the data and all those students that you're seeing be served by the partners that you work with, you know, whether it's from student supports, perspective, or perhaps offering more certificates for learning or prior work that recognize skills but can also stack into a degree in the long run. What are you learning from the menu of things that they ought to be doing that would make the most impact for working adult learners?

Yeah. So one ties back to that skills and competencies conversation. Right. I feel like 10 years ago when I was in graduate school at Stanford School of Ed, they were talking more about skills and competencies than the business school where I was doing my joint degree. Today I hear more employers talk about skills and competencies than I do. The average, like the bar, has lifted. So we need to keep lifting the bar in higher ed, where all of higher ed is adopting skills and competency frameworks for how we measure outcomes. That also means we need to have nuanced, uncomfortable conversations. I'll give you an interesting one. At one of our employer partners, the most common reason why students take a break between one semester and don't enroll in the next, which we might historically call a dropout, is because they get a promotion. Is that a bad thing? If somebody two and a half years into college is getting a promotion into a salaried role over 60k on average? Well, when we report that data to higher ed or when the higher ed media wants to cover that, they call it a dropout. I don't know what I should call that. I think I should call it a success story that hasn't finished yet. The student's gotten the economic outcome they want, but they probably want to come back to that university.

But.

But they don't really want that university to slam them with dropout emails for the next year. They want to have a lifelong learning partner. So we've got to rewrite this paradigm. I get it that the economic model for nonprofit and public higher ed works really nicely when it's a four year degree and you only acquire the student once. I don't know if that's going to work for what today's working learner wants. And that means we need to change the conversation in Washington and we need to change the conversation of elite higher ed. And those of us who went to elite higher ed probably need to check ourselves.

It's a good set of thoughts as we wrap up here. And just Ben, Rachel, thank you so much for joining us. And we'll be right back on Future youe.

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Welcome back to Future youe. After a revealing conversation with Rachel Carlson of Guild and Ben Castleman of the New York Times, Michael Ritchel concluded that segment there with a nice shot at those who went to a lead higher ed needing to check themselves. What's your take as a graduate of one of those elite institutions?

Oh, come on, Jeff. Can't we call it a selective institution or something? But.

Or a highly rejective institution?

Yeah, exactly, exactly. Exactly. Right. So, but look, probably no secret that I don't disagree with Rachel there. I do think her point is an important one given as you know, Jeff, a lot of the policymakers who think about higher education aren't really familiar with the institutions where most students enroll, community colleges or regional comprehensive universities. And it's one of the reasons I think that the first lady, Dr. Jill Biden, gets such attention because of her understanding. Right. Of those systems. But on the flip side, I think it's something that more and more people are certainly aware of and increasingly so. So the central question I think, Jeff, that she's asking is how do we measure outcomes? And I personally think it's really tricky because and it touches on something that I've been speaking about and I'm actually working on a piece about right now. The metrics that institutions are accountable for are really what I would call supply side metrics. They're things that are relatively easy to count given how institutions are set up. And so, you know, these are things like graduation rates and term to term retention for full time students because it's a lot harder for part Time, students, inputs. Right. Your faculty credentials and things of that nature. But it's a lot trickier to measure things from the demand side, meaning based on any individual learner that comes to you, what does progress and success look like for them, given their goals and circumstances, and how do we measure that? And the example Rachel cited of someone pausing their enrollment because they got a promotion, we've talked about that one before. And when I set up the Educational Quality Outcome Standards Board, for example, we created a way for institutions like community colleges to measure other things like promotions or placements or salary increases, because a lot of community college presidents for years have railed against these traditional metrics because they say that they are seeing exactly what Rachel described. Now, I think the trick here is that we have to be careful about letting institutions and organizations off the hook too easily. That is, someone drops out, but doesn't get the underlying economic outcome that they were looking for. And then what do we say around that? Right now, look, Guild is in a unique vantage point because they can see what happens on both sides of the marketplace, the institutional and the employer side. But all too often, I think in higher ed, those workforce outcomes are kept separate from the educational output. And so I think it's something that we've got to fix and really understand what's the job to be done of the learner, why are they coming to school, and what's the appropriate measurement to see if they've achieved that desired progress. And I don't personally know anyone who has figured out how to measure it from the demand side, but I think it's something worth wrestling with because institutions naturally align themselves to their incentives right around measurement. So Rachel obviously talked about that from a switching the program first conversation to a career first conversation and then picking the program. But I actually think it's even more fundamental than that. Like, let's understand the progress that an individual is seeking and then figure out, is it even a learning outcome or a learning program that we want, or is it something entirely different? But you know that focus on data is tough, and maybe here's a good place to turn it back to you, because, Jeff, Rachel Talked about the 4 and 40 turning to the every 4, but Ben simultaneously talked about the data showing that we've been in a period where people are actually moving between jobs less often and they're actually more likely to stay close to home and so forth. And so I'm just curious how you square these, at least at a high level, trends that are kind of seemingly different. And how do you think about the implications for institutions, because I know Ben's point about how companies have cut back on training over the last several years. You could say, well, yeah, sure, but the data is by definition, it's a lagging indicator. And the really smart strategic companies like Amazon and Walmart, they're the ones making the changes for their strategic advantage. So you don't see it in the data at large, but that doesn't mean it's not important. I guess the fact that folks are moving less often between employers and you square that with the gig economy that we're both in and the need to constantly upskill and reskill it has me tied up in knots. I'm a little confused. What's your take?

Well, first, Michael, I have to say that my crystal ball is sometimes cloudy about the future of higher education, but it's mostly cloudy on this one. I expected with school openings expiring, unemployment benefits, and the delta variant declining, that all those things would help boost labor force participation this fall. But evidence seems to suggest labor shortages might be deepening again. I haven't taken an economics course since college, but the Wall Street Journal recently surveyed 52 economists, and nearly half of them predicted that participation in labor force would never return to its pre pandemic level. In other words, this change is permanent. So to begin to untie your knot, I say that the data are a lagging indicator. And that's never good for higher education when the data are really lagging behind. And here's why. Because historically it has taken higher education institutions way too long, in my opinion, to design new academic programs to address the changing labor force. Let's take data analytics, for instance, which is a really hot field. And in many ways every job now is a data job. But job postings looking for skills analyzing data, for example, grew almost 50% between 2017 and 2019. But the growth in new certificates and new academic programs in that area is really lagging, especially for those people who don't want to major in it, but just want to get skill sets in data analytics. And I think it's because higher ed is trying to address this market through its legacy means. And what do I mean by that? You know, things like entire academic programs, degrees and things like that, which just take forever to get going. So if the labor market is shifting permanently, as we seem to think it is during COVID so too will how higher education has to address it. Now, I know there's going to be some listeners out there who are going to write in and say that higher ed's job is not to follow the whims of the workforce. And I'm not suggesting here that colleges and universities change wholesale and get rid of their core programs because, quote, unquote, they're no longer needed. We know from countless surveys out there that soft skills are in high demand, which are often provided by the core disciplines at any college or university. So we definitely don't want to get rid of those. But what I'm suggesting here is really something different that institutions keep up in other ways that are different than how they might have addressed this in the past. And I want to throw out two ideas here. One is an example from Dominican University in California and Make School, which formed a partnership a few years ago around computer science, where Make School's students went to Dominican to get the liberal arts background that they needed. And then Dominican students went to Make School to get the computer science background that they needed. You know, Mary Marcy, the former president of Dominican, was on the podcast a couple of years ago and she told us it would have taken years and more than a million dollars to start a computer science program. So here's a way where a partnership really helps. So number one, let's stop thinking of we have to solve these problems in higher ed on our own, right? Partnerships, I think, are key to keeping up with Rachel's prediction that this labor force is much more dynamic than the numbers have suggested until now. Colleges just can't do this by way the themselves. Second, we really need to stop thinking in. In legacy terms, especially around legacy degrees. We've heard so often on this podcast that skills are the coin of the realm in the future job market. So who provides those skills? Right? How do we measure those skills? And most important, how do we track them? I wrote recently in my newsletter about Pocket at asu, which is a new app that they're launching this spring, that they're launching in the spring of 22, which allows learners to track their learning in their pocket. Right? It's a digital wallet and portfolio for the lifelong learner. I think the problem with this new way of thinking, especially around skills, is that the infrastructure still needs to be built there. And I think that the institutions that build that infrastructure are really going to win this decade if they think in terms of skills, new credentials, and tracking that learning going forward.

No, it's a bold statement, Jeff, and I think directionally it's really the thing that higher ed is wrestling right now, right as it comes out of its legacy past and sort of what the organization would have it do. But last question, for me on this, which is, you know, Rachel talked about how for the 18 year old US news or that proxy. Right. Is how they rank their colleges. And for working adults, it's all about the Google Ad, she said. So you've thought a lot about this dynamic of recruiting students and the notion that there are buyers and sellers in higher ed, for example. And I wonder if you might illuminate the point a bit more and let us know whether you agree with Rachel or how you might describe the current dynamic.

Yeah. So Michael, I'm going to push back here because I don't think it's the higher ed brands that spend the most on Google and Facebook that are winning the day. So for one, whenever we get a peek at the OPM business models, and we're talking about this with Phil Hill on an episode this fall, online programs spend a ton on market marketing. Indeed, it's why colleges and universities often partner with OPMs because they know how to market higher ed programs. But yet even as they achieve scale at an institution, you'd think their marketing costs might go down per student. And they don't. They just keep rising. So if they were winning on Google or Facebook or LinkedIn where there's also a lot of higher ed advertising, you would assume, I think, that their costs would be going down as they grow and get known. And that doesn't seem to be really happening, at least in that market. And I understand that's just a piece of the market, but I think it's an example of what's happening out there. Second, I think increasingly learners are choosing based on cost and not just brand or what they see advertised on Google and Facebook. I was at a dinner with some presidents in Pennsylvania a couple of weeks ago and one of them mentioned that they had a very successful degree completion program until an out of state player came in and undercut them on camera. Cost per credit. Now, this local institution had the brand, right? They were known in this marketplace, but this outside player had the price advantage. And almost overnight the advantage of this local institution disappeared because they couldn't compete on price. You know, Rachel also talked about that more structured model for the distribution of education. And while I love her model, right this idea of a career first conversation where you back into education after knowing what skills and jobs you want. I'm really skeptical that the education industry can ever be that efficient, to be honest with you. I'm thinking of this right now on the undergraduate level because I'm writing a piece about all the friction in applying to college As a high school student, you know, there were more than 11 million applications filed to colleges last year by high school students, even though there were only a couple of million high school graduates. Right. They're filing so many more applications than they ever did before. And you would think if we're moving to a more efficient system, they could actually file fewer of them. Right. There's so much friction in that undergraduate market. And I'm writing about a pilot the Common App did on direct admissions to reduce that friction. But it reminds me of conversations we've had about other knotty issues, whether it's improving access to health care or getting people to to save for retirement. You know, we thought putting technology in the hands of people to make healthcare decisions or auto enrolling them in 401k plans would work, but it's not that simple. The rules are complicated because there are so many stakeholders who benefit from the way the rules are set today. And that's definitely true at all levels of higher education. We know better ways to run undergraduate admissions, for example, we know better ways to pay for college or give adults upskilling and reskilling. But these are just huge ships to turn around. And I don't think it's going to happen as easily as we want when there are so many players with so much at stake in the current system. So with that, we're coming to the end of another episode of Future you, and we are asking for audience questions, and we've gotten some great ones. And remember, if you send us your audience question through social media or other means, we will send you this great Turvis tumbler that we have with the Future U logo. And this week's question comes from Kim Bach at the University of Northern Iowa. Michael. And her question is that there are many views on the importance of choosing a major when applying to college versus applying to college as undeclared. Or exploratory. Students are given different information by parents, high school counselors, and college. And similarly, there's disagreement about this topic within instructions. Institutions of higher education are students more at risk, for example, if they enter colleges undecided. So what are your your thoughts and experiences about this? About whether to apply to college, picking a major, or applying as exploratory?

Yeah, Jeff, when I see such violent disagreements on both sides of an issue, I tend to think that we have the categories wrong so that there's truth on both sides. But we need to divide the world a little bit differently. And the way I'd say it is from the jobs to be done you know, choosing college angle. Right. There are certain students who enter with a very clear understanding of what they want out of college experience and the specific skills and credentials they're ready for that career first conversation that Rachel talked about, in other words. And for them coming in with a major and an institution that knows how to serve them well by starting them in that clear major or that guided pathway, absolutely they're right. And you want to match that supply and demand. But for certain students, they're genuinely unsure. Right. Like I had no idea what I wanted when I went into college from a major and course of study perspective. And there you want a very different program design where you put exploration not in sort of a willy nilly kind of, you know, thousand flower bloom kind of way, but like an intentional set of explorations that frankly might not look like courses. They might be more experiential in nature, I think, to get people reps in a sense of what do you actually like, what are your strengths, where's your passions? And then you can declare and go deep. But fundamentally that's a very different program design and maybe a different type of institution that should be set up for that. And so sorting that and better matching the demand and the supply would be my advice rather than saying to all learners, oh, you have to declare a major or you all shouldn't, or to all institutions you have to go all guided pathways or you should go all choice, choice, choice. Say, what are your takes?

Yeah, I have a lot of thoughts on this and I think there's two external factors playing a big role these days in this. One is parents who are really concerned about the cost and value and the ROI of college. And I see so much in the conversations that I've been having since the book came out with parents and counselors and students, a real push by parents to have that ROI and a degree. And it's why we're seeing so many parents to say, you know, we're not going to pay for college unless you pick a major. And by the way, we really want you to pick a major that's going to have great career outcomes. So I think there's a lot of pressure on students because of the cost of college. The second one though is also strategic. And I saw this again and while reporting the book is that there's this belief that you have to have a major chosen in order to have a shot to get in to some of these colleges. So for example, especially at capacity controlled institutions where you want to major in computer science or engineering, the only shot you have of getting into that program is applying as a freshman, especially at big public universities. Or, you know, there's sometimes a strategy on the other side where you say, well, I'm going to only get into this selective college by saying I'm going to major in the humanities and then I'm going to have a shot to transfer later on into the program that I really want. So I think that there's a lot of stuff strategic thinking around this, and I wish that institutions would be more transparent about how they do admissions in these programs because I think that's one reason that students feel forced to pick a major on the way in the door is because of the way they think admissions might be run at that institution.

Jeff, that's a great place to leave it because I think transparency or the lack thereof undergirds a lot of these issues right now. And what my answer neglected is the the parents job to be done right in all this. And I think it's an important consideration. But the lack of transparency, I think in many cases breeds that lack of trust. And then a lot of different narratives. Right. Result from there that sometimes cause good behavior and sometimes cause aberrant behavior, if you will. And that's not just with Kim's question, but it cuts through all of the conversations we've had today on future you around the changing nature of the job market and how higher ed should and shouldn't respond to that. So I think it's a great way for us to cap off this episode and this revealing conversation with Ben Castleman and Rachel Carlson of Guild. So huge thanks to them, thanks to Kim, and thanks to all of you that are listeners. We'll see you next time.

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