Et Tu, New York Times?

A staple of the higher education establishment’s advocacy campaign to keep college enrollments growing is that students are making an excellent “investment” if they go and missing out on a lot of earnings if they don’t. Those arguments have been losing their edge for years, as Americans wise up to the fact that mere possession of a college degree is no guarantee of a high-paying career.

Therefore, it must have been especially painful for the higher education faithful to read this February 12 editorial in the New York Times. After reviewing the statistics showing that on average, college grads have fared better in the labor market than have people who don’t have degrees, the writers acknowledged the truth: “But that doesn’t mean that enough good jobs are, or will be, available for college graduates.”

Finally! The country’s major, liberal newspaper grasps that the comparative success that college graduates have enjoyed in the past does not mean that young people who are or soon will be contemplating college should expect it to be a huge personal benefit. Many are certain to be disappointed.

The editorial relates the bitter truth about underemployment for recent graduates: “According to new research from the Federal Reserve Bank of New York, the rise in underemployment for graduates ages 22 to 27 never fully retreated after the recessions of 2001 and 2007-9; in 2012, it was a dismal 44 percent for that age group….”

At the Pope Center, we have been pointing out this trend for many years.  When I came to the Pope Center in 1999, the first book on higher education policy I read was Who’s Not Working and Why by two mainstream economists, Frederic Pryor and David Schaffer. In my paper The Overselling of Higher Education, I quoted them: “An increasing share of university-educated workers are taking jobs where the average educational level has been much lower….From 1971 through 1987, a rising share of male and female university-educated workers of all ages took such high school jobs.”

That trend has become too big to ignore, with large numbers of college graduates today working as retail salespeople, coffee servers, customer service reps and a host of other jobs that call only for basic trainability, not any advanced education or training.

Nor are circumstances likely to change in the future. The editorial relays this bad news for the education establishment: “According to recent data from the Bureau of Labor Statistics, of the 20 occupations expected to add the most new jobs from 2012 to 2022, only one—general and operations management—requires a bachelor’s degree.” Most of the expected job growth will be in fields where some occupational training, often on-the-job, will suffice, such as home health care and food service.

So why should people spend large sums of money, usually borrow even more, and devote years of their lives to college degree programs if all that expense merely puts a fancy piece of paper on the wall?

An assumption that used to support the “college for all” movement was that the more people who went to college, thus boosting their levels of knowledge and skill, the more high-skill, high-pay jobs businesses would create. The idea, argued in books like The Race Between Education and Technology by Claudia Goldin and Edwin Katz, was that if more people graduated from college, businesses would then be able to invest in the technologies that called for skills high school grads simply didn’t possess.  We could pull the economy up by the bootstraps if we would make sure that more and more young Americans had “access” to higher education.

Recent experience suggests that this idea is not true. Putting more people through college does not catalyze the creation of high-skill jobs for them to take.

A key point that the Times writers missed, however, was that college has always been mostly a “positional” good. In other words, having earned a degree wasn’t necessarily beneficial from the standpoint of human capital, but instead because it set the individual apart from others who didn’t have the credential. Having the degree positioned you better in the competition for jobs.

When relatively few people had gone to college, those who had really stood out. Today, however, with tremendous numbers of Americans having gone to college (and often with little added human capital to show for it), the positional advantage is very diluted for many college grads.

President Obama keeps saying that the U.S. needs more college graduates to make our economy more competitive with other countries., but the Times is right in saying “more college won’t change the economy’s low-wage trajectory.”

Rather than spending lots of time and money in acquiring increasingly dubious college credentials, young Americans will need to find better ways of positioning themselves, ways that will involve demonstrated capabilities, not merely accumulating enough credits so that a college or university will confer a degree on them.