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New York Times
IN his recent commencement address at Rutgers University, President Barack Obama focused on the noneconomic reasons for going to college. The skills gained in college, he said, are tools to help"make the right choices ” away from fear and division and paralysis, and toward cooperation and innovation and hope."
It was an important reminder, well suited to the times and the occasion. But it also came across as if the economic benefits of college were a given. In fact, the familiar assumption ” graduate from college and prosperity will follow ” has been disproved in this century. College-educated workers have not seen meaningful pay raises, and public policy has failed to address the stagnation.
It is true that as a group college graduates make more than high school graduates. This gap is one reason that politicians like Obama, Hillary Clinton, Bernie Sanders and Donald Trump want to make college more affordable. College affordability is thus linked to equality of opportunity. Since 2002, however, inflation-adjusted pay for college graduates has risen a measly 64 cents an hour, to about $31 on average. That's surely better than the 49-cents-an-hour drop for high school-educated workers in the same period, to a little less than $17. But standing still while others regress is no cause for celebration.
The problem is that the economy does not produce enough jobs that require college degrees. Private-sector white-collar jobs can increasingly be moved offshore and automated, while public-sector jobs that require degrees, notably teaching, have been decimated by deep layoffs and feeble hiring. Business investment and consumer spending have suffered in the busts of recent decades, and government spending has not picked up the slack, leading to chronic shortfalls in demand for goods, services and employees. One sign of the downshift is that much of the recent job growth has been in lower-paying occupations. Worse, there is little evidence of a turnaround. In the past five years, postings for jobs that do not require a college degree have steadily outpaced postings for those that do.
The result is lower-quality jobs and lower pay for college graduates. Take, for example, the roughly one-third of college graduates who spend their work lives in jobs that do not require a degree. In 2000, 55 percent of them made at least $45,000 a year. In 2015, only 44 percent were in jobs that paid that much.
Federal help in paying for college is vital. But it is incomplete without commensurate federal efforts to create good jobs at good pay. Obama listed some reforms that could create new jobs and raise pay in existing jobs and, in that way, help to power the economy. Modernise infrastructure. Raise the minimum wage. Reverse the dynamics that increase executive pay and depress employee pay. Close tax loopholes that enrich the wealthy and give tax breaks to families to help pay for child care. Ensure that women earn equal pay for equal work.
That list is President Obama's unfinished agenda. It will take all that and more to make full use of the nation's human capital. Until then, college graduates will struggle, and high school graduates will lag even further behind.
