The ‘Big Quit’ and the New Skills Economy

The COVID-19 shock sparked “the big quit,” with large numbers of American workers voluntarily leaving their jobs. This disruption has downsides – but also an upside.  

It’s forcing the United States to reexamine its outdated education and training regime – K-12 through postsecondary and including corporate approaches – and consider how to prepare individuals more effectively for jobs, careers, and successful lives.

This reassessment must include examining insights from the economics of skill development, which examines the relationship between our cognitive and noncognitive domains – sometimes called hard skills and soft skills – especially their effect on wages and labor market success.

Harvard economist David Deming, a premier analyst in this field, shows that since 2000, the significance of cognitive skills has declined as a predictor of labor market wage success.

Conversely, the economic return to workers’ non-cognitive skills – especially social skills – has increased between 1979 and 1997.  

Social skills are characterized by high levels of nonrepetitive interpersonal exchanges with others that manifest themselves in capabilities like communication, cooperation, collaboration, social intelligence, and conflict resolution. Individuals with social skills are team players with a sense of mutual obligation that advances group performance by inspiring the efforts of others. 

Deming’s analysis further reveals that between 2000 and 2012, science, technology, engineering, and math (STEM) jobs decreased as a share of U.S. employment, while non-STEM professional jobs – such as managers, nurses, and business-support personnel – grew at a faster rate than the prior decade. Overall, between 1980 and 2012, social-skill jobs grew nearly 12 percentage points as a share of all jobs, with wages for these jobs growing more rapidly than for other occupations.

“Strong cognitive skills are increasingly a necessary—but not a sufficient—condition for obtaining a good, high paying job,” Deming says. “You also need to have social skills.”

What I call an opportunity framework can guide the development of a renewed education and training regime that highlights the relational aspects of success rather than focusing largely on the technical or material dimensions.

An opportunity framework has two essential elements: what individuals know, and who they know – knowledge and networks, in other words. It recognizes that cultivating cognitive and non-cognitive capabilities forms the building blocks of individual opportunity.

Habits of association include social skills. They are habits because pursuing knowledge and developing networks require behaviors learned and internalized through practice. These habits are also moral strengths that can produce prosocial behavior. A combination of habits of mind and association enables the pursuit of opportunity and human flourishing.

In short, an opportunity equation emerges: Knowledge + Networks = Opportunity.

Understanding opportunity as a combination of knowledge and networks produces a framework for creating an education and training regime that community organizations like K-12 schools, workforce groups, and other education and training enterprises can develop to advance opportunity. It aims to build the capacity of our present and future workforce in both the cognitive and noncognitive domains, more effectively connecting current demand and supply.

American Enterprise Institute Senor Fellow Brett Orrell summarizes the relationship between knowledge and networks: “A technical skill can help you get a job, but non-cognitive skills are necessary to building and sustaining a career.”

The benefits of such an opportunity program would reach far beyond economic preparedness to include the importance of the relational aspects of success, vital to individual and societal well-being. Such a program would also help individuals develop an occupational identity and vocational self. Choosing an occupation and developing a broader vocational sense of one’s values, abilities, and personality is important for adult success – and could yield faster and cheaper pathways to jobs and careers.

Finally, an opportunity program would put individuals on a trajectory to economic and social well-being, informed citizenship, and civic responsibility.