Campaign 2012Campaign 2012

Op-Ed

PrintPrint EmailEmail ShareShare CiteCite
Style:MLAAPAChicagoClose

loading...

Winds of Change Blow Away College Degree

Author: Peter R. Orszag, Adjunct Senior Fellow
November 9, 2011
Bloomberg.com

Share

Many parents in the U.S. are legitimately concerned about the prospects for their college-age children. After all, today's students face three overlapping challenges: a long-term structural shift as the world's effective labor supply expands; rising tuition and growing concerns about the quality of public higher education; and the misfortune of graduating into a weak labor market.

The first challenge arises from rapid shifting of the tectonic plates that underlie the world labor market. Over the past 25 years, the effective global labor supply has at least doubled and by some estimates has quadrupled. This has suppressed wage growth in the developed economies and reduced the share of national income accruing to labor. So far, people without a college degree have primarily borne the consequences. As a result, globalization has widened the inequality between workers at the 90th percentile of wages and those at the 50th percentile.

The effects of globalization are already moving up the wage scale, though, and that trend will likely continue. As Alan Blinder of Princeton University trenchantly noted in 2006, “Many people blithely assume that the critical labor-market distinction is, and will remain, between highly educated (or highly skilled) people and less-educated (or less-skilled) people -- doctors versus call-center operators, for example.” Instead, the crucial distinction is between those tasks that are easily digitized (and thus subject to substantial competition from workers abroad) and those that are not.

View full text of article.

More on This Topic

Op-Ed

Born in 1988? Sorry.

Author: Peter R. Orszag
Bloomberg.com

Peter R. Orszag writes that being born 20 years before a time of high unemployment can keep your earnings relatively low—and erode your...