"Unemployment Rate by Education Level"
The Great Recession and subsequent disappointing recovery have been much harder on less-educated workers. The unemployment rate in August was 9.6 percent overall, but this masked large differences based on levels of education. For workers without a high school diploma, the average rate was 14.0 percent while just 4.6 percent of workers with a bachelor's degree or higher were unemployed. The spread between the unemployment rates for these two categories of workers reached a peak of 10.8 percentage points in August 2009 and has come down slightly since then to 9.4 percentage points. The largest gap before the Great Recession was 9.0 percentage points, which occurred in May 1992 shortly after the government began collecting that statistic in January of that year. The reason for the large gap in the current cycle is that the construction and manufacturing industries were hit much harder than any other sector of the economy. This relates to a question that economists have been debating recently: Is part of the increase in the unemployment rate structural in nature or is most or all of the increase due to the recession and soft demand. The unusually wide spread between workers with low and high levels of education suggests that some of the gap could be structural, perhaps due to cheaper production costs overseas, increasing labor productivity in the U.S. or a mismatch between the needs of employers and the skills of workers. Any or all of these trends could be a contributing factor to the slow pace of hiring, which has critical implications for the recovery of the commercial real estate leasing markets.