Monday, March 13, 2006

The educated get poorer

In this article we find increasing evidence that educated individuals are valued less and less in America.
I happen to believe that is worrisome in dozens of ways. It also dispells the myth that education is failing to supply big business qualified people.
Big business is, in fact, fleecing college educated people. Read on...

The Poor Get Richer
Blue-collar workers are making salary gains -- but don't cheer yet.
Fortune Magazine
By Geoffrey Colvin, FORTUNE senior editor-at-large
March 13, 2006: 10:13 AM EST

"The real annual earnings of college graduates actually declined 5.2 percent, while those of high school graduates, strangely enough, rose 1.6 percent.

That is so contrary to the conventional view of this major economic trend that it demands explanation. One possibility is that it's just a blip. Could be, but remember that 2004, when the readings started going haywire, was a year of strong economic growth, low unemployment, and rising productivity, offering no obvious reason to expect weird results.

The other main possibility is that something unexpected and fundamental is changing in the way the U.S. economy rewards education. We don't yet have complete data, but anyone with his eyes open can see obvious possibilities. Just maybe the jobs most threatened by outsourcing are no longer those of factory workers with a high school education, as they have been for decades, but those of college-educated desk workers.

Perhaps so many lower-skilled jobs have now left the U.S.--or have been created elsewhere to begin with--that today's high school grads are left doing jobs that cannot be easily outsourced--driving trucks, stocking shelves, building houses, and the like. So their pay is holding up.

College graduates, by contrast, look more outsourceable by the day. New studies from the Kauffman Foundation and Duke University show companies massively shifting high-skilled work--research, development, engineering, even corporate finance--from the U.S. to low-cost countries like India and China. That trend sits like an anvil on the pay of many U.S. college grads.

We need more evidence before concluding that we're at a major turning point in the value of education to American workers. But it certainly feels like one, based on what we can observe. Higher education still confers an enormous economic advantage. Just not as enormous as it used to be.

As for income inequality, pretty much everyone has always hated it, and its growth was a certain cue for handwringing and brow furrowing. Well, it's not growing anymore. Because our best-educated workers are earning less, and the incentives for higher education may thus be declining, the result could be a more uniform--and lower--standard of living. Be careful what you wish for."

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