Had a Diploma. Lost Anyway.

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People go to high school and to college because they think that doing so will get them a good job.


People go on to get Masters’ and Ph.D.’s, because they think that doing so will get them a good job.


They are not incorrect about this. The data consistently show that educated people are more likely to be employed than less educated people, and that they receive higher salaries than do less educated people.


However, while getting a college education or an advanced degree increases the odds that a person will get a good job, it is not an absolute guarantee. As more and more people get educated, the relative worth of a B.A. or a Masters or a Ph.D. goes down. In the 1940’s only 4.6% of the American population had graduated from college with at least a 4-year college degree. In 2020 38% of Americans had graduated from college with a 4-year degree. College graduates were eight times more plentiful in the American workforce in 2020, than they were in 1940. Put differently, graduating from college in 2020 was only 1/8 as big a deal as it was in 1940. When college degrees are common, the rewards of attending college become relatively unimpressive. More and more college graduates find themselves either fully unemployed. Alternatively, they find themselves underemployed in a job that makes minimal use of their intellectual abilities.


This is not a new problem. We have fancier data to measure the issue today. But social scientists have been noticing this since the 1960’s. The original classic statement of the under-utilization of college graduates was a book with one of the greatest titles ever – Ivar Berg’s 1971 Education and Jobs: The Great Training Robbery. For a recent analysis that uses all of the sophisticated methodological tools that social scientists have today, see Jonathan Horowitz’s nifty 2018 American Sociological Review article “Relative Education and the Advantage of the College Degree”.


There is more to the problem than just more and more people getting college degrees.


If the skill demands of the American economy were to be going up, American employers would need an increasingly skilled labor force. The rising rate of college education would solve the real needs of an economy increasingly dependent on high tech skills.


Superficially people tend to think that we have an increasingly high skill economy because of the rise of Silicon Valley and the software sector.


In fact, the skill levels in the American economy have not changed much in a hundred years. The economy creates both skilled jobs and unskilled jobs. Google may hire a lot of Linux programmers. However, McDonald’s hires a lot of minimum wage slaves. One needs a lot of skill to be a respiratory therapist. One does not need a lot of skill to cut people’s lawns.


One would think that increases in technology would tend to increase the demand for skill in the labor force overall. On one hand, you do need lots of scientists and engineers to create the next generation of technology. Plus, technological advances do tend to eliminate a lot of low skilled jobs. You don’t need a lot of people to load and unload boats in a shipyard if you have giant cranes that do the job faster and better. Self-checkout at supermarkets has eliminated a lot of cashier jobs.


But this trend gets undercut by forces working in the opposite direction. One effect of technological advance is the simplification of jobs that used to be highly skilled. Think about a McDonald’s. There is a lot of food engineering that goes into a McDonald’s. Processes like making French Fries are computer controlled and semi-automated. Inputs like burgers are standardized by size, thickness and fat composition, so that every burger cooks exactly the same way. Before there was McDonald’s, there were diners and roadside restaurants. The short order cooks there did not have access to computer-controlled fryers and standard input ingredients. They had to be able to cook everything on the menu – and they to be able to manage cooking fifteen or twenty items at once during busy times, such as the lunch time rush. The rise of fast food has lowered the skill required to work in a restaurant. Restaurant skills, at least in that sector, have gone down.


There have been similar processes in construction. Carpenters used to have to make doors, windows and framing from scratch. If the carpenter was unskilled, none of the doors, windows or moldings would fit. Nowadays, doors, windows, and framing components are pre-made. Everything comes out of Home Depot at a perfect 90-degree angle and with fittings that allow for easy attachment to the other parts of the structure. There are comparable simplifications for other components of the house. Drywall has replaced plastering – eliminating the need for skilled plaster artisans. Cabinets come pre-made. Actual bricks have been replaced by artificial brick veneer, reducing the need for skilled masonry. As a result, the skill level of construction work has gone way down.


Of course, it could be argued that restaurants and construction jobs do not hire college graduates. These deskilling issues involve high school graduates or high school dropouts and not the college population. But similar deskilling dynamics have affected managerial and office jobs. Accountancy has become dramatically simplified with tax software, accounting software and spreadsheets. It takes skill to use accounting software – but it used to take even more skill when all calculations and procedures had to be done by hand. Being a bank president or loan officer at a bank used to require active engagement with the business community in one’s city. One had to know all of the relevant players and the details of all of their businesses – so that the banker had the detailed background information to evaluate any request that would be made for a loan. Now commercial loan decisions are made by computer programs. The bank officer reports on the result of the decisions made by some algorithm at some larger regional data processing center. Local bankers have been reduced to being salespeople. Little knowledge of actual business conditions in their communities is required.


What are the consequences of all of this? And can anyone do anything to fix it? There was a substantial period in the 1960’s and 1970’s when social scientists believed they could urge businesspeople to create more complex, emotionally satisfying, personally engaging work. Hopes that academics could lead the way to business creating jobs that were workplace nirvana were never especially realistic. The recessions of the 1970’s and 1980’s led to layoffs. Companies moved away from full time employment. Jobs were transferred overseas to countries with lower wage rates. This shook the “work quality” advocates out of their daydreams. Nowadays, people are lucky if they have any kind of permanent employment at all. They consider themselves lucky if they are retained in a bad business quarter or an unprofitable year. People take the jobs they get, semi-skilled, unskilled or boring as hell.


But the consequence of under-utilization of educated labor are real. College-educated workers are alienated. College-educated workers are bored. College-educated workers are also extremely financially insecure – given ever increasing amounts of student debt, and the increasing precarity and temporary status of upper-level and managerial jobs. College-educated workers are doing worse than their parents were doing. They are not happy about this.


How is this unhappiness manifested?


It manifests itself as cynicism. It manifests itself as political skepticism. It manifests itself as increased hostility to higher education itself. People who paid vast amounts of money to get a better life, who are not getting a better life and are now facing crushing loads of student debt can be not realistically expected to be happy about the college experience.


Should we be educating fewer people because overall skill levels are stable?


This is not a good idea.


1. Education does put people at the front of the line for good jobs. Everyone is going to try to compete to get at the front of the line no matter how many or how few seats in universities are offered by the higher education sector.


2. Universities do the research that produce the next great economic booms. The personal computer and Internet booms came out of university research that was being done in Silicon Valley, in the Bay Area and around Route 128 in Boston. Medical progress depends on the research being done in medical schools. Arts, entertainment and tourism are surprisingly dependent on what comes out of universities. The Sixth Street music complex in Austin, Texas is based on the arts activity associated directly or indirectly with the University of Texas. Los Angeles’s film industry makes enormous use of the cinema and media training programs at the University of Southern California. A substantial portion of California’s agricultural productivity comes from research done at California’s primary agriculture school, the University of California at Davis.


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The world is going to continue to need university education. However, the increased presence of alienated under-utilized college graduates will continue to be a concern. Optimism and legitimation lead to collective solutions to social problems. Alienation and cynicism lead to inaction, and self-interested destructive politics.


Sending organizational psychologists out to encourage businesspeople to create jobs with higher skill levels is not a realistic solution to the problem.


Having businesses and universities do the research that leads to new and exciting products is a realistic solution. New and exciting products that lead to business booms are an especially realistic solution to the problem.


Boring work is tolerable if you are making money.


Boring work is awful if it is poorly paid and you are likely to get laid off as well.


Economic growth makes student loans easier to pay. Economic growth allows individual workers who are unhappy with Employer X to find better jobs with Employer Y.


No University research leads to technological and economic stagnation.


If you think former students are alienated now, wait till you see how alienated they get when the economy goes down the tubes.



For More Information


On educated people having better employment prospects and high incomes than do less educated people, see Claudia Goldin and Lawrence Katz. Race Between Education and Technology. (Belknap Press, 2008).


The classic statement of how technological change leads to both skill upgrades and downgrades is Michael Piore and Peter Doeringer’s 1985. Internal Labor Markets and Manpower Analysis. (Routledge).


On technological change leading to downgrades, see Harry Braverman’s 1974. Labor and Monopoly Capital (Monthly Review Press).