Welcome to the Letter from the Chief Economist.
March is Women’s History Month, and there a few ways we’ve been marking that here at Lightcast. For one, I’ve enjoyed seeing some of the many, many impressive women on the Lightcast team here be celebrated on social media. Yesterday, the tech education nonprofit Npower celebrated Women of Color in Tech Day featuring The Equation for Equality, research we at Lightcast worked on. I wrote about that research a bit in January, but essentially, we found that women of color, though underrepresented in the tech industry, have many of the skills necessary to succeed in it. With the right training in a relatively small number of skills, they could make a career move to tech and enjoy greater economic success themselves and a more diverse industry overall.
I also want to highlight an article from last week on the Lightcast blog discussing gender differences in underemployment, referencing data from another of our research reports.
Women make up almost 60% of all U.S. college undergraduates, but they still lag behind men in securing jobs that match their qualifications. Lightcast data showed that women are more likely than men to be underemployed, with almost half of female college graduates (47%) working in positions that do not require their degree in their first job, compared to 37% of men.
While a first job does not necessarily define an entire career, we found that individuals who begin their careers in positions that do not require a bachelor's degree tend to remain underemployed—over 70% of those who are underemployed in their first job continue to be underemployed even after a decade of graduating. So while we’re celebrating Women’s History Month and recognizing all the incredible achievements women have made, it’s another reminder that inequity persists in the workplace.
Also on the blog is a recap of a report on digital skills—showing that they raise global GDP by $6.3 trillion every year. The report comes from Amazon Web Services and Gallup, and it used Lightcast data to analyze job postings, as well as a Gallup survey of 30,000 workers and 9,300 hiring managers in 19 countries. Besides the huge GDP boost, the report highlighted four other key takeaways:
Improved job satisfaction and security are among the benefits of possessing advanced digital skills, in addition to economic gains for workers.
Organizations that extensively employ advanced digital skills, digital technologies, and cloud computing achieve higher rates of success in revenue growth and innovation compared to those that use fewer digital skills.
Many organizations face difficulties in hiring for digital skills positions, while, perhaps counterproductively, maintaining strict bachelor's degree requirements.
5G, cryptocurrency, and the Metaverse are here to stay—survey respondents were committed to expanding in those spaces.
Overall, the data in their report showed not just the importance of understanding how fast skills change, but how vital it is to know what skills workers have at all. By better understanding the specifics of the labor market, we can plan for emerging technological needs now and in the future.
Economic News
Just today, the European Parliament voted in favor of a pay transparency directive, and so did Australia, both with the goal of narrowing the gender pay gap. In the EU, the pay gap is currently near 12.7%, and in Australia, it’s 13.3% (it’s near 18% in the US).
Under the European legislation, employees will have the right to see salary data broken out by gender, and employers will be required to disclose the criteria used to set pay and raises, with penalties imposed if the gender pay gap exceeds 5%. In Australia, all firms with over 100 employees already report their salaries to the country’s Workplace Gender Equality Agency, which publishes industry-level statistics on the pay gap. Under the new law, the agency will specify the pay gap at each business specifically.
Beyond promoting equity by reducing pay gaps based on race or gender, this will also allow every worker to better understand how their work and pay compares to others both inside and outside their organization. It’s a huge step forward for greater clarity throughout the labor market—and in countries like Germany where right now only about 5-7% of all postings list salary, it will be a game-changer. As always, I’m glad to see new data on the labor market, particularly when the new information puts workers in the position to see real material gain. It looks like these laws check those boxes.
In The Papers
Finally, in the papers this week I want to talk about a study from the OECD, “Micro-credentials for Lifelong Learning and Employability: Uses and Possibilities.” This project was commissioned by the European Union to understand what micro-credentials meant for the future of work throughout the continent. Very briefly, micro-credentials are any kind of certification that focuses on a specific discipline, usually for a short time—closer to a coding bootcamp than a bachelor’s degree.
These programs are catching on quickly; according to data collected by the report, “the number of micro-credentials offered on five major learning platforms increased from around 600 in 2018 to 1900 in 2022.” The researchers found that micro-credentials can be a reliable way to develop skills, and for them to be successful, it’s better that they’re highly specific to their target population and designed around clear outcomes in the workplace.
The report was written with a government audience primarily in mind; it also recommends that for micro-credentials to develop into a reliable, widespread method of education and workforce training, they would benefit from much greater infrastructure and support—more like established degree-style education programs. This includes funding support to ensure programs are sustainable and accessible to all, a more standardized accreditation or quality-assurance system so that programs are reliable, a strategy beyond online portals in order to enable broad accessibility, and greater alignment between training providers and those hiring.
So while micro-credentials may be relatively new, the underlying principles aren’t: in understanding labor market outcomes, a more targeted goal is one that’s oriented more toward success, and that starts with the greatest possible insight into supply and demand for workers and skills.
Until next week,
