Fortune Magazine on the Great Education Myth

I've written a lot lately on the Great Education Myth - the concept that wafts out of elite Washington circles that says all we have to do is educate people and their economic problems will be over. Beyond the fact that this is just an insulting line of reasoning (aka. people are stupid, that's why they are poor) is the fact that its not backed up by any data.

This month, Fortune Magazine - not what you'd call a "liberal" publication - fully debunks the Great Education Myth once and for all. Looking at a new study by the Federal Reserve (again, not exactly a "liberal" institution) the magazine wrote:

"The skill premium, the extra value of higher education, must have declined after three decades of growing. The Fed researchers didn't pursue that line of thought, but economists Lawrence Mishel and Jared Bernstein at the Economic Policy Institute did, and they found supporting evidence in the new Economic Report of the President, issued within days of the new Fed survey. It cited Census Bureau data showing that the premium had indeed fallen sharply between 2000 and 2004. The real annual earnings of college graduates actually declined 5.2 percent, while those of high school graduates, strangely enough, rose 1.6 percent."

So what's going on? It's pretty obvious:

"We don't yet have complete data, but anyone with his eyes open can see obvious possibilities. Just maybe the jobs most threatened by outsourcing are no longer those of factory workers with a high school education, as they have been for decades, but those of college-educated desk workers. Perhaps so many lower-skilled jobs have now left the U.S.--or have been created elsewhere to begin with--that today's high school grads are left doing jobs that cannot be easily outsourced--driving trucks, stocking shelves, building houses, and the like. So their pay is holding up. College graduates, by contrast, look more outsourceable by the day. New studies from the Kauffman Foundation and Duke University show companies massively shifting high-skilled work--research, development, engineering, even corporate finance--from the U.S. to low-cost countries like India and China. That trend sits like an anvil on the pay of many U.S. college grads."

Put another way, America's sell-out "free" trade policy is now not just a problem for manufacturing workers - its a problem for information-sector workers. This trade policy, in the name of larger and larger corporate profits going to smaller and smaller numbers of people, is now undermining the value of education. And now matter how many pundits, politicians or elites say the word "education" over and over again, the data shows they are pushing a myth.

COMMENTS: Go to Sirota's Working Assets site to comment on this entry