Education, and Lack Thereof, Highly Valued by Employers

Conventional wisdom holds that the more years of education that you have, the better off that you are. Now before we really get started, let me be absolutely clear. You would be hard pressed to find a bigger proponent of education than I am…even if that education does not translate into higher paychecks, more job satisfaction, or other benefits. Education is always a good thing. Always. Well, maybe not if you’re only looking at the ability of a person in today’s labor market to find and retain quality employment. Let me explain.
There seems to be three different job markets evolving in our country:

1. In bucket number one are high-end workers such as highly skilled financial analysts, software engineers, lawyers, and factory workers. The supply of those workers has been exceeded recently by the demand for them so their ability to find and retain high quality positions is superb.
2. In bucket number two are low-end workers such as unskilled food service, security, and hospital employees. According to a recent Wall Street Journal article, as of 2005 about 20 percent of the labor force were employed in these personal-service jobs, up from 13 percent only 15 years earlier. Again, the supply of these workers has been exceeded by the demand for them so their ability to find and retain high quality positions is superb.
3. And now to the third bucket. This is everyone else, which is to say most of the labor force. These are workers who have at least some skills and often a great deal of skill. They often have at least some college education and sometimes multiple degrees or even graduate school degrees. But they’re doing routine tasks in offices and factories and so their work can be done by lesser paid, less demanding workers in third world countries such as India. These are the workers whose jobs and personal livelihood are the most at risk and they comprise the majority of the population.

So what do we do to fix this problem? Is it even a problem? Clearly if you’re in the third bucket, you’ve got a problem. You’ve invested years educating yourself, getting yourself trained to do higher end work, you’ve worked hard, you’ve produced great results for your employer. And then they pink slip you and perhaps even have you train your replacement…via long distance as your replacement is located in a village in rural India and they’re making the same amount of money per day as you’re making per hour.
Talk with an economist and they’ll recommend more and better education. Encourage all workers to improve their interpersonal and abstract thinking skills so that they’ll move from the third to the first bucket. Discourage students from entering occupations where their work is largely routine even if completely intellectual like lower end computer programming. It has always been important for individuals to get a college or graduate school degree, but apparently it is now becoming just as important for them to get the right type of degree.