Direct from Washington, February 2009

Entry-Level and Next-Step Jobs

In these chaotic economic times, no study of normal workplace issues is going to completely hold up, but one has come along—on entry-level jobs—that probably will remain on target. Most important, it answers some of those unrealistic policy ideas that march all students toward a college degree of some sort—and it indirectly gives a prominent role to career and technical education.

The Urban Institute analyzed surveys of employers in the low-skill job market (2007), those employers who had hired workers within the past two years for jobs that do not require a college degree. The researchers classified the jobs into two categories—entry-level jobs and next-step jobs. If an employer said any of three requirements were extremely important when hiring for the job, their jobs were considered as next-step ones. The three criteria were: high school diploma, prior job-specific experience, and specific skills training in a related area.

Overall, among recently filled jobs, about 30 percent were entry-level and 70 percent were next-step jobs. There was a large wage differential between the two types of employment: $9.25 an hour for entry-level work versus $13.85 on average for next-step jobs. This is partially due to the larger number of entry-level jobs that are part-time; more than 35 percent required less than 35 hours of work, compared with only 13 percent of next-step jobs.

The part-time nature of entry-level jobs also reduces the likelihood that these workers will receive benefits. Only 45 percent of such jobs offered health insurance, compared with 80 percent of next-step jobs; fewer than half offered a pension fund, compared with three-fourths of next-step jobs.

What kinds of skills do workers use daily in either category of jobs? The study draws an interesting contrast of what’s real and what education policy makers believe is necessary. For example, both jobs require about the same use of math skills, although fewer than 45 percent of the jobs require daily use of them. Next-step jobs require much more writing, filling out forms, and computer use than entry-level jobs. More than half of both categories of jobs require workers to read documents daily, but the percentage is much higher for next-step jobs. The one task where entry-level skills are higher than for next-step jobs is in working in teams or groups, but more than 80 percent of both groups require this daily.

The occupational categories for each type of job contribute to their differences. Entry-level jobs tend to be in service, construction, production, and installation occupations. Next-step jobs tend to be managerial and professional or office and administrative jobs. Entry-level jobs also are more likely to be with small businesses; fewer than half (44 percent) are with businesses that have more than 100 employees. Most jobs in either category are in urban areas, but there are more entry-level openings in rural areas than next-step ones.

How workers get hired also differs, depending on the category. Entry-level hires are more informal—through advertisements, referrals, or a worker walking in on his/her own. Next-step jobs are most likely to be filled through an advertisement. Employers find it easier to hire entry-level workers (30 percent), but only 17 percent reported that it was easy to hire next-step workers.

In summary, says the Urban Institute report, only 3 in 10 jobs are available to those without a high school diploma, relevant skills training, or prior experience. Also, though, there are opportunities for entry-level workers to move up a step if they can acquire any of these criteria. "Given that next-step jobs more frequently involve such cognitive skills as reading, writing, and using a computer," it says, "ensuring that non-college job seekers can perform these tasks is essential."

"Entry-Level and Next-Step Jobs in the Low-Skill Job Market," Gregory Acs and Pamela Loprest, The Urban Institute, www.urban.org.