A new study by the Public Policy Institute of California (PPIC), authored by Deborah Reed and Hans Johnson, suggests that in the future, California will not have enough skilled workers to meet the demand of its economy. Home to Silicon Valley, California has long been known for a concentration of high-technology industries in the United States.
By 2020, it is projected that only 33% of the state's workforce will have university degrees, but 39% of the jobs will require a university graduate.
<$adv0> Reed and Johnson say that - in addition to educating its citizens better - California must attract "unprecedented numbers" of foreign-born university students and students from other U.S. states. Unfortunately, their study showed that it was unlikely that a substantial number of students would migrate to California from other states, due to high costs of housing.
The report says that to mitigate the shortage in skilled workers, California will need to depend on immigration from other countries, in addition to inter-state migration. Fortunately, university graduates from abroad were increasing ... although not enough to fill shortages:
"Between 2000 and 2005, for the first time, immigrants to California with a college degree exceeded the number of immigrants who were not high school graduates. Large increases in the number of college graduates in other countries indicate that this trend could continue to intensify but the number of highly educated immigrants to California would still need to more than double to meet projected needs."
As of 2006 estimates, 36.5 million people lived in California, an increase of 7.6% from the 2000 census. It was estimated in the 2000 census that 26% of the population of California was foreign-born. Nearly 850,000 private businesses in California employ 13.2 million people in the non-farm sectors.
Different methods of analysis give slightly different results, but California outranks most countries in many categories. With an annual gross product of over 1.5 trillion U.S. dollars, it is the worlds fifth largest producer of food, which accounts for only 2% of its annual gross product. If California were an independent country, it would either be the tenth (CIA estimate) or the sixth (California government estimate) largest economy in the world.
The most important growth industries projected to need skilled workers are the education and health sectors, followed by professional services such as legal, engineering, and computer services.
Health and education services are projected to increase from 10.8% of all jobs in 2005 to 13.2% in 2025. Currently, 43% of workers in these sectors hold a bachelor's degree, and that figure is expected to grow to 54% by 2025, if current trends continue.
The projected number of jobs for the professional services sector is expected to grow from 14.7% in 2005 to 16.4%. The projected number of university degrees in the professional services sector is expected to grow from 35% in 2005 to 54% in 2025.
The manufacturing industry, which employs the lowest percentage of university graduates at 30%, is expected to decline from 10.8% of all jobs to 8%.
In light of these projections, it is expected that 41% of all jobs will require a university degree by 2025. As a result, wages are expected to increase to compensate for the need, and California could turn into an even brighter destination for migrants.
Impeding California's hopes to attract more skilled university graduates from abroad is current U.S. immigration policy. The study states that U.S. policy is slow to change and that the current system places importance on family reunification over skilled qualifications in granting legal permanent residence.
California is the most popular destination for international migrants to the United States. Beginning in the 1970's, a large wave of immigration to California began, which intensified considerably in the 1980's and through to the present time. According to the study, in 1970, only 9% of Californians were foreign-born; today, an estimated 30% were born outside of the U.S.
Recent debates over a new bill in Congress containing a provision for a points-based system based on qualifications may change that. However, the idea seems to be meeting resistance by some legislators and lobbying groups.
In its conclusion, the study states that California needs to place importance on educating its citizens, attracting more immigrants from abroad, and hoping that housing prices decline and wages rise to attract university educated Americans from other states.
Reed and Johnson say that "doing so now may be particularly advantageous and can lead to better economic opportunities for Californians and possibly better outcomes for the state."
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