Pushing ‘College For All’ Makes Americans Poorer. Here’s What We Need InsteadOur good jobs went to China, and better jobs never emerged here. China’s workers made out while ours suffered.
By Oren Cass
February 18, 2022
Globalization’s ailments were supposed to have a ready cure. Education would prepare American workers to take advantage of the dynamic and well-paying careers of the future, even as many jobs that once supported families and communities headed overseas. American firms, employing this increasingly skilled workforce, would outcompete foreign rivals and expand into new markets.
When these things did not happen — when wages stagnated, cheap imports flooded domestic markets, and American exporters struggled to gain footholds abroad — many assumed the problem must be with education too. Employers lamented “skills gaps” that left them unable to find the talent they needed.
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A Surplus of Worthless DegreesThe actual problem is one of misdiagnosis. America is not desperate for more college graduates; it is producing them far faster than it creates jobs that they might fill. In a new analysis of U.S. Bureau of Labor Statistics (BLS) data, published this week at American Compass, I show that the U.S. labor market’s evolution in recent decades has fallen woefully short of what would be needed to deliver broad-based prosperity for American households.
From 2000 to 2019, the number of college graduates in the labor force increased by more than 20 million. But over the same period, only 10 million new jobs appeared in occupations for which at least a college degree is the typical education needed for entry (“BA jobs”). Bachelor’s degree holders accounted for 97 percent of net workforce growth, but 41 percent of net job growth required a high school degree or less.
This imbalance might be tolerable if all segments of the labor market were thriving. But in fact, only those workers who do secure BA jobs have experienced significant gains. As of 2019, BA jobs still accounted for just 27 percent of the labor market, but they managed to capture 75 percent of the total 2000–19 increase in wages paid economy-wide.
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When Free Trade Couldn’t DeliverWhat went wrong? Economists misinterpreted their own theories of how globalization would affect the American labor market. Harvard University’s Greg Mankiw provides a quintessential illustration.
“Full employment,” he observed, “is possible with any pattern of trade. The main issue is not the number of jobs, but which jobs.” Unfortunately, Mankiw went on to say: “Americans should work in those industries in which we have an advantage compared with other nations, and we should import from abroad those goods that can be produced more cheaply there.”
This conventional wisdom misunderstands the nature of comparative advantage and global trade balances. The formula is an excellent one for producing cheap stuff, but nowhere does it suggest that those industries in which America can produce things most cheaply will be those offering good jobs that allow American workers to support their families and communities.
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Instead, we need economic reforms that yield a different pattern of economic growth and thus different labor-market demand. We should support international trade only insofar as it is balanced. Real investment in the domestic economy should get preference over speculation and offshoring.
Then, rather than plow more trillions of dollars into subsidizing a higher education system that serves only a select few, we should focus on creating programs that connect young adults to productive careers. It’s policies like these, not free trade and free college, that will benefit American workers broadly.
Source:
https://thefederalist.com/2022/02/18/americans-pursuing-college-degrees-in-hopes-of-a-good-job-are-left-holding-the-bag-of-globalist-lies/
