Low-wage workers without degrees are untapped human potential
Introduction
Millions of low-wage workers in the U.S. are stuck in jobs that offer little stability or opportunity for advancement. These positions often lack critical benefits like health care, paid leave, and the flexibility needed to manage life’s challenges, leaving workers and their families trapped in a cycle of poverty. For many, this is not a temporary situation — these workers came from low-income households and are now supporting their own dependents on the same low wages, repeating the pattern across generations.
Education could be the key to breaking this cycle. A college degree remains one of the most reliable pathways to upward mobility, offering better job prospects and financial stability. Yet millions of workers remain cut off from postsecondary opportunities due to inherited poverty, underfunded education, and limited digital access. Without intervention, future generations will face the same barriers, trapped in low-resilience jobs with growing financial and family responsibilities, but unable to pursue the education needed to escape.
The economic imperative for companies to invest in this population is clear. Building robust internal talent pipelines by tapping into the hidden potential of low-wage workers isn’t just good for employees — it’s good for business. Many of these workers possess untapped skills and abilities developed through life and work experiences that don’t show up on a resume. By providing pathways for education and growth, companies can unlock this potential, creating a more resilient workforce while simultaneously fostering loyalty and reducing turnover.
If we fail to act, both workers and employers risk being left behind. We must rethink our educational system, creating new pathways that not only help individuals escape the cycle of low-wage work but also allow businesses to leverage the talents of an overlooked workforce, ultimately driving economic growth for everyone.
Developing these pathways requires postsecondary leaders to rethink how educational opportunities are developed, structured, and delivered for a population that will require greater scaffolding and support than is possible in the current system. In addition to tackling the educational components, shifting mindsets and workplace structures to better leverage this population for internal pipeline development will be crucial for their mobility. Lastly, in order to create mutually beneficial solutions that benefit both workers and their employers, tackling these challenges also requires collaboration and partnership across higher education, business, philanthropy, and policy.
Defining Working Learners
We know that not all postsecondary learners are the same. In recent years, there has been a greater emphasis on the differing needs and demands of working learners compared to full-time students who enter higher education soon after graduating from high school.
But even among working learners, there are many differences. One way to understand the differences among potential students is to consider how they are positioned in terms of their education and their careers.
Rising Talent: For those individuals who have neither accessed education nor found their way to an economically rewarding or resilient career, education can provide a path to rise up from their current circumstances. A bachelor's degree is a recognized and often successful way for Rising Talent to stop putting in time on a job and start on a career path. The income gap between those we recognize as Rising Talent and those with a bachelor's degree is substantial — and enough to change a whole family's life course.
Undervalued Talent: For those individuals who, despite having a degree, are struggling to find a foothold in a career that offers strong wages and will ultimately be resilient to changes in technology and the labor market, education is about finding more value for their talent. Though they may be currently undervalued talent in the workforce, a degree in a different field, an advanced degree, or a specialized certificate can help them to pivot into a more resilient and economically rewarding career.
Upskilling Talent: For those individuals who have had experience in postsecondary education — perhaps they already have an associate or bachelor's degree and have good jobs but see the possibility to aim even higher — education is about upskilling. These upskillers might return to postsecondary education to get an advanced degree or a very specialized workforce certification.
Advancing Talent: For those who have done remarkably well in the workforce despite relatively limited education, postsecondary education is about career advancement. They have economically rewarding jobs that seem resilient, at least for now, to workforce changes. But advancement hinges on more education. These advancing talent individuals are looking for a credential, typically a bachelor's degree, to secure their future success.
In partnership with our parent organization Western Governors University (WGU), we at WGU Labs have committed to a series of research initiatives to better understand the unique needs, challenges, and objectives of Rising Talent in particular.
We believe Rising Talent possess significant untapped potential that we have a collective responsibility to unleash — and a vested interest in doing so. Supporting these individuals not only helps them realize opportunity but also helps our economy grow by addressing persistent labor shortages and skills gaps, improving productivity, and decreasing turnover.
Who Are Rising Talent?
We define Rising Talent as working adults with limited education and low career resiliency.
To understand this population of U.S. residents, we turned to the National Longitudinal Survey of Youth 1997 (NLSY97). The NLSY97, supported by the Bureau of Labor Statistics (BLS), tracks the life experiences of a nationally representative sample of 8,957 American youth born between 1980 and 1984. The survey commenced in 1997 and includes 20 surveys worth of data for each participant. The NLSY97 dataset includes information on a wide range of topics, including education, employment, family and household dynamics, health conditions, and income. Through this analysis, we were able to identify the common traits, characteristics, and experiences of Rising Talent. (Our full analysis is available in a report.)
In the U.S., 45.7% of working-age adults don’t have a degree or credential. Similarly, 44% of all U.S. workers aged 18 to 64 are low-wage workers. That’s a significant proportion of the workforce that has the potential to rise out of low-resilient jobs through education.
Low-resilient jobs tend to be low-paying, provide few opportunities for advancement, offer few or no benefits, and lack stability. Common occupations include nursing aide, cook, cashier, and housekeeper. Many of these jobs pay less than $15 hours per hour, which is below a living wage in the U.S. At this wage, a full-time worker will earn $31,200 a year.
The distance between Rising Talent’s earnings and the wages of those with postsecondary degrees is significant — and has been widening for decades. In 2023, recent college graduates aged 22-27 working full-time earned $24,000 more per year than those with only a high school degree.
Despite recent trends around skills-based hiring and removing degree requirements from job postings, a new report from Georgetown University’s Center on Education and the Workforce predicts workers with 4-year degrees will hold most good jobs (those that pay a family sustaining wage) in 2031. Researchers expect the number of good jobs for workers with a bachelor’s degree or higher to increase by over 15 million by 2031. But the center predicted that the good jobs available to workers with a high school diploma or less will decline by almost 600,000 during that period — widening the gap between those with and without degrees and leaving millions of U.S. workers struggling to make ends meet.
The Economic Impact of Rising Talent
The challenges Rising Talent face in the labor market are clear. Our analysis shows that many also face a host of other obstacles that stem from and contribute to their position in the labor market. At the same time, these individuals are more than their challenges and do bring valuable, if hidden, talent to the table. Many have had varied and lengthy workforce experiences. Others have been faithful and effective caregivers under the most constrained circumstances. Some have built the skills to perform a number of jobs despite limited access to formal education. And their non-traditional perspectives can provide a competitive edge when it comes to innovation and creativity.
However, these working learners, who have little to no experience with postsecondary education, are in precarious financial situations and will likely need additional support and different educational models to meet their needs. Supporting these individuals is imperative not only for their career growth but also for the growth of our economy.
The World Economic Forum estimates the economic impact of reskilling workers is $2.93 trillion. The Brookings Institute found that the average bachelor’s degree holder contributes $278,000 more to local economies than the average high school graduate through direct spending over the course of their lifetime, and an associate degree holder contributes $81,000 more than a high school graduate.
Upskilling workers can also help address persistent labor shortages in healthcare, teaching, financial services, and other industries. In fact, 87% of companies say they already have skill gaps or expect to within a few years.
McKinsey found that “a primary driver of quitting is that employees do not have opportunities to learn new things or find their work interesting or challenging.” According to Gallup-Amazon research, 48% of U.S. workers would be willing to switch jobs if offered skills training opportunities, and 65% of employees believe employer-provided upskilling is very important when evaluating a potential new job. Additionally, upskilling can improve morale and productivity, lower recruitment costs, and promote an agile workforce.
Unleashing Potential Through Education
Holding a low-wage job has broad implications for quality and stability of life. These jobs tend to lack employer-provided health care, paid leave, and the flexibility needed for workers to manage their life circumstances. The constraints of low-wage employment also extend to workers’ dependents. Many of the workers stuck in low-resilient jobs came from low-income households themselves and are now supporting their own dependents on low incomes, perpetuating the cycle of poverty.
Possessing a college degree often serves as a cornerstone for upward social mobility, leading to better financial stability and opportunities for career advancement. Yet almost no low-wage workers have postsecondary experience. Lower education levels are associated with lower wages, meaning that millions of U.S. residents who do not have a college education hold jobs that offer little career potential and do not have an educational background that will help them change these circumstances.
Postsecondary education could vastly improve the economic circumstances for Rising Talent, yet these programs are largely inaccessible to them. Systemic obstacles including inherited poverty, underfunded K12 education, food insecurity, higher rates of trauma, limited social capital, and low digital access have hindered them from rising out of their challenging circumstances.
While the economic return of a degree is clear, we believe more individuals may enter the workforce immediately upon high school graduation due to waning public support for higher education, declining demand, and growing skepticism of the value of a degree. Long term, many may find themselves stuck in unfulfilling and low-wage positions, and likely face financial pressure from dependents and other expenses that will fuel a desire for additional education to propel them forward. However, because of their backgrounds, including negative K12 educational experiences, dire financial circumstances, and limited computer access, many in the Rising Talent category may find themselves unable to access the additional education or credentials that could help them improve their earning potential.
With some exceptions, much of the current postsecondary education system is not designed to meet Rising Talent where they are. Some existing models and tools that support individuals in these circumstances include competency-based education, wraparound support systems, onsite childcare, emergency financial aid, hybrid college offerings, embedded career pathways, asynchronous online education, first-year experience programs, and adaptive education, to name a few. Despite the efficacy of many of these efforts, none have scaled to impact this population at the systemic level.
We believe that the educational system itself must be remade in order to impact individuals who are unserved by the current model. Potential solutions higher education institutions can explore to better serve Rising Talent include:
- Expanding earn-and-learn opportunities so individuals can receive course credit while working
- Developing microlearning programs — short, segmented modules — for time-pressed learners juggling work and family obligations
- Helping individuals identify their current skills and relevant careers
- Tracking digital credentials and records so they can be used to navigate new work and learning opportunities
- Supporting courses on mobile devices to meet learners where they are (our data show that many Rising Talent do not have computer access)
- Providing prep courses that teach digital skills and cultivate a learning mindset
- Collaborating with stakeholders from business, philanthropy, and policy to enhance access and funding
Our Areas of Exploration
In order to create onramps to opportunity for Rising Talent and other underserved populations, WGU Labs has embarked on several research initiatives to rethink education by utilizing proven learning science approaches, rigorous and rapid testing of interventions, and social psychology principles to create a learning experience that provides all individuals — particularly those who struggle to envision themselves as “college material” — the means to economic and personal fulfillment.
Our Learning Agenda leverages our capabilities in qualitative research, large-scale quantitative analysis, and the experimental design-research approach we established in our Solutions Lab to conduct formative inquiry and discovery, understand the complex issues that underlie these domains, and design and test solutions. These learnings will inform our creation of new modalities of learning to support Rising Talent and other underserved populations.
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We will share our progress and insights through several upcoming reports and our ongoing [work in] Progress blog series — an effort to share our preliminary research and learning design findings in higher education to help the field move at the pace of technology.
Conclusion
To better support Rising Talent, we need to identify and expand successful strategies while collaborating with stakeholders to develop new solutions for areas that need improvement. This pool of untapped talent requires us to think differently to help them acquire the skills needed to seize new opportunities. We can’t rely on existing solutions to serve them — we have to rethink career pathways and education systems.
By unlocking Rising Talent’s hidden potential, we can help millions of individuals advance into better-paying, more fulfilling careers — and fuel economic growth. But addressing the many challenges that keep these individuals stuck in low-wage jobs requires a concerted effort from policymakers, educational institutions, employers, and technology providers to create an inclusive and supportive environment for Rising Talent.
Interested in working with us to solve the biggest challenges in higher education and the workforce? Get in touch.
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About WGU Labs
WGU Labs is the nonprofit EdTech consulting, incubation, research, and design arm of Western Governors University (WGU), where our mission is to identify and support scalable solutions that address the biggest challenges in education today.
Report Contributions
This brief was authored by Holly Wallace, with valuable contributions from Youngki Hong, Jeremy Hodgson, Natalie Berkey, and Betheny Gross, as well as visual design support from CallyAnn Hamilton.
