Industry-Recognized Credentials Are a Stepping Stone, Not a Strategy

A conservative U.S. Secretary of Education and a progressive teachers' union president don't often agree. But Secretary Linda McMahon told Congress a four-year college "is not for everyone," and American Federation of Teachers president Randi Weingarten said much the same in The New York Times.

Both are signaling the same shift away from "college for all" toward a question that is far from settled: What should replace it? For high schools, many states have answered with industry-recognized credentials, or IRCs.

The logic is appealing. Give students a portable, employer-recognized signal of workplace skill, like a welding certification or a nurse aide credential, and they can enter the labor market with something to show for their years in school.

Just over half of states now build IRC attainment into accountability systems. Ohio pays school districts up to $725 for every high-demand credential a student earns. Credential earning has climbed as a result. Twenty-six percent of the class of 2024 earned one, versus 2 percent a decade earlier.

Two rigorous state studies complicate that celebration and point to a single conclusion useful for any K-12 leader building or expanding an IRC program. A credential works as one rung on a career ladder. It fails when a school or state treats it as the whole ladder.

Matt Giani's 2022 analysis of more than a million Texas graduates and Jay Plasman's new study of 1.3 million Ohio students, both from the Thomas B. Fordham Institute, ask whether these credentials pay off. The answer depends on what credential is examined and what it's paired with.

Both studies agree that credentials in areas like construction, manufacturing, and transportation produce strong and durable wage gains. For example, the average manufacturing-credential holder in Ohio was earning 37 percent more than a non-credentialed peer seven years after high school.

But the studies differ on the value of other credentials, like in agriculture and business. This suggests the need for caution. "Two states don't make a consensus," writes Boston College Professor of Education and Policy Shaun Dougherty in his review of the reports.

Another important finding in both studies isn't about credentials in isolation. What matters is credential pairing and sequencing.

Plasman found Ohio students who paired a credential with a coherent CTE course sequence saw income premiums nearly triple those of credential-only students, still holding six years out. Giani found similar results in Texas.

So the credential is a running start, not a permanent edge.

My colleague Rachel Canter and I found a similar pattern studying six effective work-based learning programs. None relied on a single credential to do the job. They built sequences, course concentrations, employer-validated credentials, and supervised paid work experience, often capped by an apprenticeship or dual-enrollment credit.

Two less comfortable findings deserve attention. First, in Ohio, male credential-earners saw their income advantage grow over time. Female credential-earners saw theirs turn negative by their mid-twenties, largely because men cluster in the high-value trades. Second, economically disadvantaged students disproportionately earn lower-value credentials.

Taken together, all this evidence points to a bigger problem. State accountability systems mostly rewarded credential quantity, not quality, treating attainment as the finish line rather than a step along the way.

The stakes are also rising nationally, with new federal funding under Workforce Pell now flowing to short-term credential programs, which makes the case for local quality control even stronger.

Here are four lessons for K-12 leaders from these studies that should guide this work going forward.

—Know your fields before you expand. Credentials in construction, transportation, manufacturing, and health care carry the strongest evidence of return. Not every credential your program offers carries equal weight in the labor market.

—Be skeptical about offering a credential as a standalone option. Pair it with a CTE course sequence, and where possible, a work-based learning experience. The evidence is consistent. The sequence, not the certificate alone, produces durable earnings gains.

—Check who has access to your highest-value pathways. If your best-paying credential programs are quietly dominated by one gender or clustered in higher-income schools, that’s a design problem you can fix. It’s not a labor-market fact you have to accept.

—Track your graduates past the one-year mark. Early wage bumps fade. Ask your data team for outcomes three, five, and seven years out, not just the numbers that look best in a press release.

None of this is an argument against industry-recognized credentials. It’s an argument for treating them as one well-built rung on a career ladder. They’re never a substitute for building the ladder itself.

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Bruno V. Manno is a senior advisor at the Progressive Policy Institute and a former U.S. Assistant Secretary of Education for Policy. He can be reached on LinkedIn. Disclosure: Manno is the board chair of the Thomas B. Fordham Institute, which undertook the two studies discussed in this article.