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they’ll be that way forever! If job
creation is slow, it will be that
way forever! The reality is that
jobs come and go with economic
cycles. But what lies beneath
the economic cycles, and what
has remained constant, is the
relentless engine of technological
change spurred onward by global
competition that demands more
skilled workers. It is this persistent
dynamic of up-skilling that
has been driving the increased
demand for more postsecondary
education and training. There is
no indication that the trend has
suddenly reversed itself.
Meanwhile, when jobs
disappear, more college is also the
best safe harbor to wait out the
recession and improve prospects
in anticipation of the recovery.
Indeed, college-educated
workers are much more likely
to be employed than their high
school-educated counterparts,
even during a recession. Even the bemoaned janitor in the
’s story emphasized that his current job scrubbing
toilets was a good job—because it would pay for his graduate
school. He clearly understands, in spite of a less-than-ideal
present, that the future benefits of more postsecondary
education will eventually pay off.
Irrespective of the current economic conditions,
individuals need to consider college as a life-long investment
decision. Likewise, the investment horizon for economic
development needs to be measured in decades, not annual
budget cycles. Skipping or shortening college on the basis of a
headline or even a few years of bad economic news is foolish
for individuals whose careers will span forty or more years
of working life. On average, skipping an associate’s degree
will cost a high school graduate half a
million dollars in earnings, and skipping a
bachelor’s degree will cost a million and half
dollars in potential earnings over a lifetime.
Our own research shows that we have
underproduced college graduates by almost
ten million since 1983. We also find that
through 2018, at least three million jobs
that require postsecondary education and
training will be unfilled due to lack of
supply. The share of jobs for those with a
high school education or less is shrinking.
(See chart.) In 1973, high school graduates
and dropouts accounted for 72 percent of jobs, while by 2007
it was 41 percent. The opposite has happened for those with
at least some college: The share of jobs has increased from 28
percent in 1973 to 59 percent in 2007, and is projected to be 63
percent by 2018. Likewise, the share of national wage income
from college-educated workers has increased from 38 percent
to 73 percent since 1970, and there is every reason to believe
that this trend will continue.
The longer we are focused on the past, the less time we
will have to confront the realities of our fast-approaching
economic future. In reality, the recession is
shift to jobs requiring postsecondary education. The jobs
that replace the jobs we’re losing will be very different kinds
of jobs, requiring very different kinds of workers, that will
need different kinds of preparation—mostly postsecondary
preparation in one form or another.
While the economics of higher education are clear, the
politics are not. Investing in schools and higher education
is an easy political applause line, but it is often neglected
in the budget line. The economy’s lackluster demand in
recession, coupled with the stories questioning the value of
college, makes it easier to excuse cuts in public funding for
postsecondary education. In the short-term, federal stimulus
funds have helped fill the gaps for postsecondary cuts driven
by declining state revenues. But the stimulus funds will be
unavailable after 2011, and federal money can’t make up the
difference indefinitely. Paradoxically, we need postsecondary
education more than ever but are less able to pay for it.
The current funding crunch in higher education is a
symptom of a larger mismatch between public revenues
and public commitments. Higher education is especially
vulnerable in the debate about public priorities. It lacks the
core constituency and the immediacy that issues like Social
Security or homeland security have.
Reducing funding for postsecondary education is bad
economic policy and also bad social policy. The consequences
will reverberate society-wide because slashing higher
education budgets is a decision that will affect inequality for
the next several decades by determining who gets access to
In 1970, 44 percent
of the top three
income deciles
had postsecondary
education—today, 81
percent do.
By 2018, about two-thirds of all employment
will require some college education or better
Percentage of Workforce
by educational level
Master’s degree
or better
Some college,
no degree
High school
High school
Number of people
91 million
129 million
154 million
166 million
Source: March CPS data, various years; The Georgetown University Center on Education and the Workforce