The level of education doesn't only determine your income. It increasingly says whether you have a job at all.
With a December unemployment rate of 4.1 percent, the United States is very close to what economists consider full employment. The rate never went this low in the 2000s, and it was only bested by the latter part of the 1990s boom. But the winners and losers are stark.
According to a new analysis by the Brookings Institution, the vast proportion of job gains went to those with a bachelor’s degree or higher. Of 10.7 million net new jobs added from January 2013 to December 2017, nearly 7.7 million went to college graduates. Degree holders also saw all the gains during the most difficult years of the recovery, through 2013, while those with less education continued to see losses.
The composition of the national workforce is different that in 2008, on the eve of the Great Recession. College graduates totaled nearly 40 percent by last year, compared with 34 percent in 2008. Those with some college dropped to 15 percent from 28 percent. High-school grads fell from 29 percent to 26 percent, while those with no high-school degree dropped from 9 percent to 7 percent. The data suggest “that college grads are also now claiming new jobs that used to go to people without a B.A. degree,” the report states.
The trend hasn’t changed under President Donald Trump, who was heavily backed by the less-educated white working class. In December, college graduates with jobs increased by 305,000. Those employed Americans with no high school degree fell by 132,000. The drop was 38,000 for high-school grads.
“Americans without college degrees, who continue to comprise 60 percent of the labor force, are now effectively penalized in every phase of the business cycle,” the report continues. These people are not helped by a booming stock market. Nor will they be helped by tax cuts that — to the extent they are reinvested in companies at all — will be used to automate functions, not create new jobs.
Will a price be paid in the next election? I doubt it — despite the disappointment of betrayed Carrier workers in Indiana, and other anecdotes. The white working class voted primarily on tribal identity that Trump channels so well, not on economics.
Today’s Econ Haiku:
Bitcoin’s in a rout
A virtual currency