Our Overeducated Workforce: Who Benefits?

There are two “college jobs” (jobs requiring a bachelor’s degree) for every three “college graduates” (people 25 or older with a bachelor’s degree). What’s more, according to projections by the Bureau of Labor Statistics, this will not change much in the future as low-wage jobs grow somewhat faster than “college jobs,” while “college jobs” grow more slowly than the number of “college graduates.”

This blog has been an outlier in reporting this set of facts – see here, here and here. So while our readers should not be surprised by the recent report of the Federal Reserve of New York that “one in three college-educated workers typically holds a job that does not require a degree,” the mainstream media should be shocked.

Given these facts from official sources, it is a mystery how our leaders can go on and on about our growing “knowledge economy” and the necessity for everybody to go to college so they can get a good job.  One out of three college graduates now is not going to get one of those good college jobs; if everybody gets a bachelor’s degree, then about four out of five will not get a “college job.” It’s just arithmetic. How can President Obama very mistakenly say “the best anti-poverty program around is a first-class education” as two-thirds of jobs now and in 2022 will require only a high school diploma or less and most of these jobs pay low or very low wages? How is it that major newspapers, like the Chicago Tribune, still have headlines warning of a “shortage of educated employees”?

I don’t usually assume that there’s a conspiracy involved when our elite opinion-shapers purvey a widespread conception that is so out of whack with the facts.  I expect a certain level of class blindness among middle-class professionals (especially at the upper levels) on a wide range of subjects, and my expectations are only rarely disappointed. I think many of my lefty friends are too quick to attribute such mismatches to a kind of all-seeing executive committee of the ruling class that is purposely and systematically purveying propaganda that serves their interests.

But this past year I was interviewed by a documentary filmmaker, Jennifer Schuberth, who convinced me that I was looking in the wrong place for a conspiracy. Since the practical effect of having too many college graduates for the number of “college jobs” is to put downward pressure on the wages of those jobs, I figured any intentional design would require some kind of unwieldy conspiracy among employers. Schuberth, who is a Ph.D. anthropologist, has done some tracking of money flows, however, and she makes a pretty good case that the propaganda that blinds us may be orchestrated by the largest purveyor of college-student loans, Sallie Mae. You can watch her 12-minute doc Poorer by Degrees here. (I am one of the talking heads, but Schuberth’s editing and graphics have made me more lucid than usual.)

Sallie Mae, officially the SLM Corp., donated nearly $1 billion to found the non-profit Lumina Foundation, whose mission is “To increase the proportion of Americans with high-quality college degrees, certificates and other credentials to 60% by 2025.” Lumina gives money to various media outlets, think tanks, higher education associations, and universities to advance this mission. Lumina President and CEO Jamie Merisotis and Chief of Staff Holiday McKiernan are popular keynoters at gatherings of higher education administrators. Merisotis, for example, told the Oregon Higher Education Symposium that “[e]conomists and labor experts are quite clear” that the existing higher education system is not producing enough college graduates. Likewise, McKiernan emphasized to the Middle States Commission on Higher Education that “[e]xperts agree” that “by 2020 65% of jobs in America will require some form of postsecondary education.”

In these speeches when Lumina executives cite “experts” who “agree” and are “quite clear,” they actually refer to only one expert, Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce, which is a major recipient of Lumina funds. Carnevale is also the source for the headline cited above warning of a “shortage of educated employees,” and he was the go-to guy for The Wall Street Journal to attack the NY Federal Reserve study as “wildly inaccurate.”

Carnevale authored a 2013 study, Recovery: Job Growth and Education Requirements through 2020, that purports to refute the Bureau of Labor Statistics’ occupational projections. BLS is not just an expert on this subject, it’s the premier expert. That does not mean BLS is right and Carnevale is wrong, but it does make it hard to see how Lumina executives can say “experts agree.”

Here’s the disagreement: BLS says the total number of jobs requiring “postsecondary education” of any sort is 33% now and will grow to 35% by 2022 (jobs requiring bachelor’s degrees will grow from 22% to 23%; those requiring associates degrees and other postsecondary credentials from 11% to 12%). Carnevale says the total is now 59% and will grow to be 65% by 2020, but he has an unusual definition of “college jobs.”

Carnevale dispenses with the BLS’s tedious job descriptions based on surveys of more than a million employers. Instead, he uses well-respected public opinion surveys and finds that many college graduates with jobs that BLS says do not require bachelor’s degrees tell surveyors that they are paid more than non-college-graduates doing the same or similar jobs. Carnevale thinks that when this happens, that person’s job should count as a “college job”: “Employers are still willing to pay more for the college degree – a symbol of a worker’s attainment of the knowledge, skills, and abilities that improve productivity.” Thus, if a barista at Starbucks with a college degree makes more than a barista at Starbucks who does not have a college degree, then that should count as a “college job” because the first barista has benefitted economically from his/her college education.

Well, that is one way to look at it, and a very creative one! But I’m glad the BLS doesn’t count that way. The NY Fed didn’t use Carnevale’s approach either, and as a result, found that though college graduates as a whole average substantially higher incomes than those without college, in 2013 one of four college graduates earned $27,000 or less.

You can probably guess how Sallie Mae, the giant of the college-loan industry, benefits from Carnevale’s reading of the need for more and more “postsecondary education” and from the Lumina Foundation’s mission to double the proportion of higher-educated workers. But watch Poorer by Degrees anyway. It paints a disturbing portrait of how some folks make money by exaggerating the American Dream.

Jack Metzgar
Chicago Working-Class Studies

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8 Responses to Our Overeducated Workforce: Who Benefits?

  1. Pingback: Where Does the Working Class Fit in the Knowledge Economy? | Working-Class Perspectives

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  3. Fred Anderson says:

    This is an excellent and a worthwhile piece, and I hope it gains a wider audience.
    I fear that the next step — What do we do about it? — will be a mis-step.
    I am probably at odds with you in this, but what I think we need is the greater use of capital. Our views may align if you accept my eccentric definition of capital as tools that help the worker to be more productive. (And the corollary definition of education — at least useful education — as human capital, the knowledge & skills that enable the worker to do a better job. There is such a thing as non-useful education / education as a consumption good, where the student has spent four years entertaining themselves but has acquired no skills that might be beneficial to any of their fellows.)
    My ground is that we cannot consume what has not been produced. And if a single individual should consume more than he/she could produce, the excess had to be taken from the fruits of someone else’s labors. This can be charity or this can be slavery depending upon whether or not it was given freely and willingly. (And some of our charity is morally obligatory; children, for example, cannot produce at levels consistent with their consumption needs. I find it interesting that the Biblical admonition that, “…and the greatest of these is charity.” can also be translated as, “…and the greatest of these is love.”)
    If we would (honorably) have a higher standard of living / If we would consume more, then we must somehow produce more. While there may be other ways, my limited abilities can see only three; work harder, work smarter, or use a tool. (And if our ambitions for a higher standard of living include “have an easier life,” then “work harder” would seem a non sequitur.)
    Ethical Schools of Management (in my opinion) should be focussed on the second approach, how can we work smarter? How can we arrange our labors such that the workers can produce (and thus have) more “steak & potatoes” for less effort? (Read some of Frederick Taylor’s self-defensive arguments for Scientific Management.)
    But I suspect that, historically, humankind’s advance has come mostly through more & better tools — that is, the greater and wiser use of capital. It is far easier to produce steel if you have a steel plant at your disposal than if you’re trying to do it with your bare hands in your backyard. Ebola is far more likely to be beaten by those trained in medicine than by the worried and ignorant. Of course, if more people train as doctors, then their services — formerly scarce — will become available more cheaply.
    We don’t need fewer educated / more clueless people. We need more people educated to do something useful — solving Alzheimer’s, finding petroleum deposits, fixing your computer, building houses, driving the semi- that delivered your groceries. (What we could probably use is fewer people who spent four years entertaining themselves and now expect to be paid for that. At the least, such educations should be confined to the wealthy who can afford such self-indulgences.)
    We also need a better matching of student proclivities to the educations they receive. It is a tragedy when someone who would have been good at (and thus probably happy at) auto body work winds up working in some government basement as a (vaguely discontented) sociologist. (Or worse, unemployed because society just doesn’t need another sociologist who was never very interested in — or good at — it!)


  4. Marissa says:

    The purpose of the article is not to dissuade people from pursuing a higher education. Rather, the article seeks to criticize a system in which working and lower class students cannot afford to attain a higher education without becoming forever indebted to the megalithic banks (SLM) in pursuit of the elusive American dream. These bachelor degree recipients will be subjugated to wages upon which they can barely live let alone make student loans payments. Thusly, the outlook for working and lower class students is increasingly dim in the face of the ever-amassing chasm between rich and poor.

    Liked by 1 person

    • Dim prospects indeed. They did the same in UK. First established fees at £3,000pa then raised them to £9,000 pa. When you consider a common low wage is £14,000 pa, it has hugely reduced the number of working class going to University. And to make sure that students couldn’t take the alternative of the Open University they raised the fees there to £9k as well. It looked as if they were deliberately pricing working class out of University. University’s which used to have a high percentage of working class students are now 50 percent foreign students (Ulster) to 90 percent foreign at Bradford University. But there are so many dumbed down degrees, employers aren’t that impressed. Distance learning has never been a better option especially with the internet where there are a lot of free courses. The major problem is getting a job giving a living wage where you are not worked as a slave.


  5. Makes sense. Only the elite get elite jobs but they need graduates to work for them. Flood the market with graduates, the elite takes the cream, and gets them dirt cheap. Now education has become a money making racket for the purveyors, it is win, win, win. Why not a conspiracy? They are greedy bastards.


  6. Kelly Ohler says:

    It is astounding to me that a Center for Working-Class studies should spend so much time and effort to continually push articles advocating for the working classes NOT to be educated. Who does education benefit? Does a highly educated person really need to ask this question? To be educated enough to know when “the boss” is manipulating the worker is all the answer needed.


  7. Roy Wilson says:

    Having educational credentials (a nod to Randall Collins) is, for Americans, a sign that they have been saved by the Invisible Hand (a nod to Adam Smith). After all, “they take that away from you.”


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