In This Recovery, a College Education Backfires By Louis Uchitelle, Economic View, New York Times, March 14, 2004
Robert B. Reich called them "symbolic analysts." They were the college-educated workers supposedly insulated from the global pressures that condemned others with less schooling to job insecurity and layoffs. "Symbolic analysts are in ever greater demand in a world market that places an increasing value on identifying and solving problems," Mr. Reich wrote in 1991.
The message: Get a college education; earn a bachelor's degree, or more. That is your immunization against the outsourcing, offshoring and downsizing that frighten so many workers today. The Clinton administration, in which Mr. Reich served as secretary of labor, pushed that solution, and so has nearly every politician, policy expert and corporate executive.
Young people listened, all too well. In this recovery, college graduates are losing ground faster than any other group, and that is partly because there are now so many graduates. More than 27 percent of the population has a bachelor's degree normally earned in four years of schooling. That is up from 21.3 percent in 1990 and 17 percent in 1980, according to the Census Bureau, and the proportion is rising by a percentage point or so every couple years.
From this group comes management consultants, lawyers, software and computer engineers, research scientists, corporate executives, financial advisers, strategic planners, advertising executives and television producers. These are Mr. Reich's symbolic analysts, and their great contribution is conceptual thinking.
No one does that better than America's college graduates, the argument goes. The next great innovation will come from them - the breakthrough that will keep the United States on top in the global economy and generate jobs within the country for workers with less education, too.
That is bedrock theory. Democrats and Republicans both subscribe to it. True, in the raging debate over the offshoring of jobs, various short-term fixes are offered - protectionist measures, for example, and tax incentives to encourage companies to preserve jobs at home. But the thesis prevails: Our college-educated, with their superior skills, give the United States a long-term natural advantage. Jagdish Bhagwati, a prominent international economist at Columbia University, put it bluntly in an Op-Ed article in The New York Times last month. "I have taught hundreds of fine foreign students in the last few years, but only a small fraction are at the level of proficiency that Intel looks for in its research program."
Well, if America's college graduates -the men and women with the equivalent of a bachelor's degree or more - are so special and in such demand, why are they suffering in the current job market? No other group has taken the beating they have in the last four years. The percentage of all college graduates 25 and older who hold jobs fell from just over 78 percent in 2000 to just under 76 percent in 2003. That was the lowest level in more than 25 years, according to an analysis of Labor Department data by the Economic Policy Institute, a research group in Washington. And they are joining the rolls of the long-term unemployed at a faster rate than any other group, educated or not.
The 25- to-35-year-olds have been hit the hardest. The portion employed in this group of college graduates dropped from more than 87 percent in 2000 to 84.1 percent late last year. That was also the lowest since the late 1970's, and their average wage has fallen since 2001.
Let's not blow these hardships out of context, however. College graduates are still more likely to have jobs than others, and their wages are notably higher. "In terms of employment, college graduates enjoy a big premium, just not as big as it used to be," said Lawrence F. Katz, a labor economist at Harvard. "They appear more vulnerable to economic shocks than in the past. And we don't fully understand why."
The bubble economy of the late 1990's contributed to the distress. Companies over-hired the college educated, particularly in high-technology areas. When the bubble burst, many were laid off, and now employers are hiring as few as possible. Unable to raise prices, they hold down costs, particularly the cost of high-wage labor. Demographics play a role. College graduates are being hired. But only 2.5 college grads are landing jobs for every 3.5 getting degrees, and so the ratio of employment to population falls.
Offshoring is a factor. More than in the past, work done by Mr. Reich's symbolic analysts is migrating to India and China. The numbers are still small, but the sense of vulnerability is widespread. "What most of these workers have in common is the sense that they have personally been devalued or harmed," said Jacob S. Hacker, a political scientist at Yale.
Mr. Reich says his original assessment, nearly 13 years ago, still holds. He blames insufficient economic growth. Despite a recent surge, the current recovery is one of the weakest on record. "Once the economy bounces back," he said last week, "college-educated symbolic analysts will be in great demand" in the United States.
Like most politicians, economists and policy experts, Democratic and Republican, Mr. Reich keeps his faith in the curative powers of a strong economy. But what if the offshoring bleeds away so much of the work now done by college graduates that the supply of people getting four-year degrees outruns the demand, even in a strong economy? Should government step in, as it did a generation ago, and subsidize job creation to supplement the private sector?
The Democrats expunged that sort of alternative in the Clinton years, and Senator John Kerry of Massachusetts, the presumptive Democratic presidential nominee, has not revived it. But Senator Edward M. Kennedy of Massachusetts, a powerful figure in the Democratic Party, is trying to push his party back in this direction. "We must create new and meaningful jobs for all Americans," he declared in a recent speech. "And we must do this by recognizing once again that government - an enlightened government - has an extraordinary responsibility to assist in this task.''
The speech went unnoticed. Certainly, the nation's symbolic analysts have not picked up the refrain. They might if the demand for their services deteriorates long enough.
Copyright 2004 The New York Times Company
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