The value of a college degree
Lots of folks have asked for my reaction to the recent Paul Krugman New York Times column that a college degree is less and less a path to good paying jobs and careers. Krugman argues that globalization and technology are reducing the demand for high skill American workers so that: It’s no longer true that having a college degree guarantees that you’ll get a good job, and it’s becoming less true with each passing decade.
The core Michigan Future belief is that globalization and technology are mega forces that are fundamentally changing the economy. And that those – both individuals and communities – who will do the best will be those who align with – rather than resist – new realities.
College educated workers are subject to the same realities that machines are increasingly able to do work that humans use to and that over time more and more workers across the planet will compete with us for jobs at all skill levels and in any industry where work can be digitized. Having a college degree doesn’t protect anyone from these mega forces.
As I wrote in a previous post: As difficult as it is to accept all of us will need to adapt to a world where increasingly the job you have, the enterprise you work for and even your occupation are less secure today than yesterday and will be even less secure tomorrow.
We use the analogy that in a world driven by globalization and technology, people will build successful careers by being like rock climbers instead of ladder climbers. The notion of a career ladder – predictable and linear steps upwards – in a world that is constantly changing is obsolete. Rather people will need to be like rock climbers – constantly adjusting to new opportunities and challenges. And then resourceful so they can take advantage of those opportunities.
The bottom line is there are no guarantees anymore for anyone of job security. Increasingly one’s pay will reflect the skills you bring to the labor marker each day, rather than what credential you have from years ago. (For those of you interested in exploring where the labor market is headed the best book I have read on the topic is Daniel Pink’s A Whole New Mind.)
That said all the evidence is that the premium for college attainment is increasing. The gap in pay between college educated adults and those without has been growing for decades.The Bureau of Labor Statistics estimates that life time earnings of those with a four year degree is a million dollars more than for those with a high school degree.
And job growth is coming in those industries where college educated workers are most concentrated. From 1990 to 2007 job growth in what we call high education sectors (predominantly health care; education; finance and insurance; information; and professional and technical services) was twice that in the rest of the economy (primarily manufacturing, hospitality, transportation, construction, retail and temporary services). And during the Great Recession those trends accelerated. Of the 8 million lost jobs, 7.6 million came in the low education attainment sectors.
So Krugman is right a college degree does not guarantee a good job. But having high skills is, and almost certainly will be in the future, the best path to a good paying job and career.
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