Information Brief 98-1

High Skills and High Pay: A Message for High School Students

How is job pay related to the skills required for a job? Do jobs that require high skills pay more than jobs that require only simple skills? If so, what can high school students do to increase their opportunities for higher-paying jobs?

ACT researchers have found that pay is strongly related to skill requirements: Occupations that have higher requirements for mathematics, locating information, and reading skills pay higher entry-level salaries. By increasing their skill levels while they are in school, students increase their opportunities for higher salaries later on.

WorkKeys® and Job Profiling

ACT's WorkKeys program measures employability skills in eight key areas: Applied Mathematics, Applied Technology, Listening, Locating Information, Observation, Reading for Information, Teamwork, and Writing. The scale for each area indicates the skill levels that people actually need for jobs. A person who scores at Level 3 on the Reading for Information test, for example, can understand short passages (such as announcements of deadlines) that use only simple words and that clearly state their meanings. A person at Level 5 can understand moderately detailed materials (such as memos describing a company's office procedures) that require drawing conclusions from the information presented. A person with Level 7 skills can understand and draw appropriate conclusions from very complicated documents (such as legal briefs) that are highly detailed and that contain technical terms whose meanings must be inferred from context.

An equally significant part of the WorkKeys program, in addition to testing, is job profiling. A WorkKeys job profile is produced when specially trained individuals work with employees in a particular job to identify the skill areas and the skill levels that employees need to perform competently. Figure 1 shows an example of a job profile. An employee in the job of Licensed Practical Nurse at Oakview Retirement Village needs Level 6 Applied Mathematics skills, Level 5 Locating Information skills, and Level 6 Reading for Information skills. Of course, a licensed practical nurse working for some other employer might need a different skill profile.

FIGURE 1. Beginning Skill Requirements for the Job Of Licensed Practical Nurse at Oakview Retirement Village

FIGURE 1. Beginning Skill Requirements for the Job of Licensed Practical Nurse at Oakview Retirement Village

At the end of 1996, there were more than 1,100 job profiles in the WorkKeys database. By averaging the results of the individual job profiles, ACT researchers developed 417 occupational profiles (WorkKeys Occupational Profiles, (ACT, 1997)). Next, they linked the occupational profiles with average salaries obtained from the Occupational Outlook Handbook, 1996 (U.S. Government Printing Office).They then studied the relationship between the average required skill level and the average beginning salary for the 417 occupations. Table 1 shows the result of this analysis.

There is a strong relationship between the average required skills for an occupation and its average beginning salary. For example, occupations that require Level 3 Applied Mathematics skills of their employees usually pay salaries of about $16,600, while occupations that require Level 7 Applied Mathematics skills typically pay salaries of about $28,000. Similar results can be found for the Locating Information and the Reading for Information job profiles. (Note, the Locating Information scale runs from Level 3 to Level 6.) Table 1 also shows that there is a wider range of beginning salaries associated with Applied Mathematics skills than with Locating Information or Reading for Information skills. In real life, job requirements involve more than one skill area; therefore, salary differences are likely to be even larger than those shown in the table.

TABLE 1. Average Occupational Beginning Annual Salary*,
by Average Profiled Skill Level
Average profiled
skill level
WorkKeys skill area
Applied Mathematics Locating Information Reading for Information
3 $16,600 $16,500 $16,400
4 $19,400 $19,100 $19,100
5 $22,300 $21,800 $21,700
6 $25,100 $24,500 $24,300
7 $28,000 . . . $27,000

* from 1996 Occupational Outlook Handbook

Although the general trends in these results are clear, the particular numbers in Table 1 should not be over-interpreted. For one thing, the salary data analyzed are at the occupational level, rather than at the level of individual jobs. Furthermore, the jobs profiled by ACT's WorkKeys system are not necessarily representative of all jobs in the United States. Finally, the salary data come from the 1996 edition of the Occupational Outlook Handbook, which contains salary data from 1995 and earlier years.

What Do These Results Mean for Students?

A recent study in one midwestern state provides a context for interpreting the results. A representative sample of high school seniors (including students who planned to go directly to work after high school, as well as those who planned to go to college) took the Applied Mathematics, Locating Information, and Reading for Information tests. The students scored most frequently at Levels 4–5, 4, and 4–5, respectively. In other words, most students had room to raise their scores, and correspondingly, to increase their potential salaries. Of course, having the skills needed for high-paying jobs in general does not guarantee that a particular job will be available in a particular location at a particular salary. Although this issue is too complex to be dealt with here, students can still improve their chances of getting better-paying jobs by acquiring more and higher levels of employability skills.

Conclusions

The general trends from this research are clear: Employers are willing to pay higher salaries for higher skill levels. High school students as a group are nowhere close to "topping out" in their employability skills. And, while high skills do not guarantee high-paying jobs, they certainly make them possible.

The practical implication of these results for high school students and their counselors, teachers, and parents is also clear: By increasing their skill levels (particularly in mathematics), students can place themselves in a position to improve their future salaries.Education is worthwhile for its own sake, but when it raises employability skill levels, it also has a potential dollar payoff.