Two Issues Related to College Degrees and the Economy

The discussion boards have been full of two interrelated items with regards to college students.  First is the Conference Board’s report on the salary advantage of attaining post secondary education, even if one does not attain a degree.  This is a self-fulfilling conclusion.  For the past two decades, jobs that workers with a high school degree could attain that paid extremely well have disappeared; the collapse of the construction sector nailed shut the coffin for high paying jobs at this end of the education spectrum.  The erosion of meaningful jobs for those with a high school education has meant that the gap between college-educated and high school-educated can only widen.  It does not mean necessarily that college graduates are doing all that much better when compared to similar graduates from other decades, taking into account inflation and the deescalation of salaries for the middle income segment of the workforce (More on the salary situation later as we move to the more pressing issue).

The other stream of information is the need for more folks with a degree in the economy. While it might seem intuitively obvious with the pending retirement of so many educated boomers and the enhanced skills needed by the knowledge economy, the message has really been slanted so that readers assume the only path is through 4 year schools.  Tony Carnevale, probably the most knowledgeable scholar on education needs in the workforce, recently released a study that called for more individuals with a college degree in the economy in the next ten years.  The way the media presented the results was that the country needed four year degree completes when in fact, if you read the report or listen to Dr. Carnevale, the conclusion shows strongly that the degree growth is at the 2 year level.

I recently talked with Tony about his study, asking if we could possibly be producing more  individuals with a degree than the country can absorb.  His models, which have historically been accurate, indicate a surge in job growth coming out of this recession (jobs have always surged after  a major recession).  But what if the structure of the economy has changed so that jobs do not grow as fast (the difference between a production-based economy and a knowledge-based economy)?  Then he said we may be in real trouble.

Which brings me to another study which is scheduled to be released sometime this fall by the Kellogg Foundation (according to the July 7 USA Today) but I have not been able to track it down.  In an interview with the author Arnold Packer, who is a well known labor economist,  Patrick Welch reports that Packer is concerned that  we are needlessly over-educating  individuals with degrees based on the job growth forecasts of the Bureau of Labor Statistics.  These forecasts, which have been out for some time, indicated that the largest number of jobs will be low-wage.  Packer says that 2 of every 3 jobs will not require a 4 or a 2 year degree.  So, we are cramming all of the educated into 1/3 the labor market.  Probably not a tenable position, given the rising cost of education and student indebtedness.

Let’s proceed one more time down the glass half empty scenario and point out a recent study  by the University of Chicago (Chapin Hall Issue Brief – Postsecondary Educational Trajectories of Urban Youth) that documents the inability of those most needing college education to complete degrees at both 2 and 4 year schools.  It is clear that the connectors are not in place to handle all the individuals being funneled into higher education – and the collateral damage is extensive and severe.

Here is the problem.  First, this country needs a lot of jobs. But, if we are sending a message that post-secondary education is a must, then those jobs we need to create have to merit the degree in terms of salary and knowledge (can’t continue to dumb down college workforce).  So far, we are not doing that.  The connection between education, jobs, and economic development are completely out of line with our expectations in each of these elements.  We are headed for a major disruption in the economy if we do not make the effort now to align these sectors.