What is wanted is competence with numbers: multiplication, division, decimals, and ratios and proportions as well as deciphering statistics and estimating probabilities. This is the view of General Electric, which recently opened a plant for producing parts for jet engines, using computer codes to shape carbon-fiber fabrics. By any measure, this is meticulous work. Yet the company decided to locate the operation in Panola County, Mississippi, well aware that its schools don’t score notably in mathematics. GE feels that if applicants have good attitudes, it can teach them what they need to know.
Phillip Brown and his colleagues acknowledge in The Global Auction that the United States is “a knowledge-driven economy.” But they don’t agree that this in itself “accelerates the demand for employees with a college education.” Their reason is that even if American graduates have needed knowledge and skills, what they offer can be found elsewhere at a much lower cost. The Global Auction argues that there is now a plenitude of “cheap brainpower,” available from a “high-skill, low-wage workforce” largely outside the US. Even now, high-tech tasks are being outsourced to other countries, and not just for turning out toys. Asian engineers now build entire industrial systems, even if they borrow from models created elsewhere. GE will be producing in China as well as for China. Medical clinics in Singapore have found no loss in quality when they send X-rays for analysis by Indian radiologists. Some American law firms now beam much of their clients’ work to Indian attorneys. Your tax return may have been processed by accountants in Mumbai. It’s one thing to lose a competitive edge in making consumer products; it’s another to find that professionals in other countries have minds and skills as good as ours but at cheaper rates.7
From almost the start, the authors of The Global Auction write, Americans have believed in “investing in themselves through learning.” But where training in science, technology, engineering, and mathematics (STEM) is concerned, that advice may already be outdated. Even now, they say, “the STEM workforce in the United States totals about 4.8 million, which amounts to less than a third of the 15.7 million workers who hold at least one STEM degree.” Those 4.8 million jobs represent the extent of currently paid positions; more can be added only if employers find it worth their while. Nor are STEM professions always the basis for long-term careers. Top pay for electronic engineers seldom rises above $130,000, so as they approach forty, many move over to sales or management. Nor are things much better at the start. A recent study of engineering schools found that from 37 percent to 66 percent of their students did not finish with a degree in the field.
Measured by births, the United States is no longer reproducing itself. To replace a population, the rule of thumb is that every 100 women must end up having 210 children. The most recent count, for 2008, puts our rate at 208. For black women the figure is 211, for Asians it is 205, while whites are at 183. Hispanic women keep the national quotient up by having 291 children. Even so, the total population is increasing, thanks to the arrival of immigrants, with or without the required documents.
Whether America actually needs immigrants is, of course, much debated. It is worth examining their current contribution to the labor force. A Census Bureau report, The Foreign-Born Labor Force in the United States, contains figures for 2007, the most recent we have. It shows that nonnative workers made up about 16 percent of the total labor force. More specifically, they account for 72 percent of California’s farm workers, 41 percent of New York’s hotel and restaurant staffs, and 32 percent of Florida’s construction workers. It’s no secret that employers like recent immigrants, because they settle for lower wages and won’t complain about working conditions. But it’s not just businesses that profit. Arnold Schwarzenegger has pointed out, “Everything we eat today is picked and created by undocumented immigrants, to a large extent.”8 The rest of us pay less than we otherwise would for child care and lawn work, not to mention the cutlets that immigrants carve at packing plants. So our latest arrivals are subsidizing the rest of us, as they have for most of this nation’s history.
Many are already in the middle class. Fully 26 percent of US physicians are now foreign-born, as are 28 percent of resident Ph.D.s. The earnings of Asian-Americans aged thirty-five to forty-four are 16 percent higher than those of native-born whites. Even more striking, 71 percent of Asian-Americans have bachelor’s degrees or better, whereas only 37 percent of whites do.
On the entrepreneurial side, Pakistani and Indian newsstands, Korean manicure salons, and Mexican restaurants are now national fixtures. Each year the Forbes 400 and the Fortune 500 list more foreign-born executives and entrepreneurs, like Sergey Brin of Google and Indra Nooyi of Pepsi-Cola. Or, for that matter, George Soros and Felix Rohatyn. Their presence on these rosters means that they have moved ahead of, and also benefited, colleagues or competitors who had been born and raised here. Every so often, I find myself repairing to Alexander Hamilton: “It is in the interest of the United States to open every possible avenue to emigration from abroad…of ingenious and valuable workmen in different arts and trades.”
To say, as Help Wanted does, that we are not producing enough college graduates to satisfy future demands seems doubtful at best. Even in prosperous times, not all graduates obtain jobs typically associated with a degree. In 2006, while the economy was still bubbling, the Bureau of Labor Statistics found that 17 percent of bartenders had completed college, as had 32 percent of massage therapists and 26 percent of fashion models. Rather than a shortage of graduates, we have a shortfall of the kinds of jobs they often see as their due. Even so, we shouldn’t assume, Paul Barton of the Educational Testing Service reminds us, “that if someone who has been to college is employed at a job, that the job requires someone who has been to college.”9
When we look at jobs that will show the largest numerical growth, few require extensive training, let alone a college credential. Needless to say, there will still be plenty of high-tech and professional positions. There will be more enterprises like Facebook, needing skilled staffs. Estimates for 2018 see employment for 1.2 million software engineers, some 300,000 more than are working now.
During the century that has just ended, the economy was dominated by huge industries—steel mills, assembly plants, even railroads—which provided critical masses of stable jobs. In 1955, General Motors alone employed 625,000 people. (Its current counterpart is Wal-Mart, whose 2.1 million workers turn over often and are not nearly as well paid.) Today, “information” is much more crucial in production, and its deployment calls for highly technical skills. Indeed, it isn’t possible to count how many Americans are employed in this sphere, since they are now in almost every workplace, from hospitals to online retailing to theatrical productions. Nor will this be a surprise to young Americans—the coming workforce—who have been raised amid electronics, beginning in the delivery room.
Concurrently, there will be increased hiring in other fields. The table on this page gives figures for some of them, from an appendix in Help Wanted. All are on the Bureau of Labor Statistics’ list of fastest-growing occupations, this time measured in actual numbers. They foresee more dining out, more elderly people needing attention, and more dialing 800 numbers to get pension and other matters straightened out. More truck drivers will deliver online purchases. But few of these jobs will call for college credits, and their pay is unlikely to vary much from current medians, which for men is $41,089, and $29,867 for women.
So a two-tier economy seems likely to continue. The Gini coefficient, an index used by the Census Bureau, reveals that earnings inequality has increased by 22 percent since 1980. Another measure, also with a 1980 base, shows that the share of aggregate income ascending to the top one twentieth of all households has expanded by 32 percent. Sending more people to college or having them master mathematics may alter these ratios but there’s no clear evidence that it will, since they have primarily changed as a result of factors such as enormous increases in compensation for high-level executives, not in levels of employment.
Still, there are many instances where employers demand college credentials, even if they have no palpable relation to the work to be done. There are the obvious reasons: for instance, demanding a degree reduces the pile of résumés to be sifted through. Requiring college attendance also raises the status of an occupation, indeed, helps to transform it into a profession. Hospitals want to be able to say that their nurses are bachelors of science, while veterinary technicians get nearer to being nurses by having associate’s degrees.
If appreciably more students are to extend their schooling, that will obviously have a cost. Help Wanted calculates that “producing 8.2 million new college graduates would require an increase of $158 billion” to higher education budgets. They don’t say how they arrived at that figure; but I’ll assume that half will be new bachelor’s degrees and half will be at the associate level, largely from two-year community colleges. Costs of course vary; Swarthmore has been spending $66,785 per student, even before room and board. So I’ve picked two more typical schools: Colorado State University in Fort Collins and Lamar Community College at the eastern end of the state. The former spends $25,656 annually on each of its students; the latter, $7,912. At those rates, the 8.2 million new graduates would cost about $550 billion, three and a half times the Georgetown estimate, again omitting living costs. Personally, I would like to see more young people entering and completing college. Prospective plumbers should be exposed to Socrates and the basics of DNA. But if our ideal is Swarthmore-type seminars for everyone, we shouldn’t delude ourselves about the tab.
Can the charges for college be reduced? Robert Archibald and David Feldman, both economists at the College of William and Mary, don’t think they really can. A fact of modern economic life, they say in Why Does College Cost So Much?, is that “all industries that use highly educated labor have had to pay more for their major service providers.” They show that billings by law firms, dental offices, and financial services have risen at the same rate as college tuitions; personal attention by professionals can’t come cheaply. All are essentially “artisan-type institutions” that rely on “face-to-face interaction.” They also note that college laboratories and libraries, even classrooms, now need computers and expensive gear to impart “a different type of knowledge and a different package of skills.”
7 The Global Auction says nothing about H-1B visas, which provide a pool of "high-skill, low-wage" foreign workers inside this country. Firms like IBM, Microsoft, and Oracle hire them after they finish graduate study here, and they can stay for six additional years. Since most are still young, they accept salaries lower than would be asked for by similarly trained Americans. ↩
8 Quoted in Peter Schrag, Not Fit for Our Society: Nativism and Immigration (University of California Press, 2010), p. 186. James P. Smith and Barry Edmonston add that "when they go out to expensive restaurants, have their cars washed, and have their clothes tailored...households derive considerable economic benefits from immigration." See their The New Americans: Economic, Demographic, and Fiscal Effects of Immigration (National Academy Press, 1997), p. 235. ↩
9 Paul E. Barton, "How Many College Graduates Does the US Labor Force Really Need?" Change, January/February 2008. ↩
The Global Auction says nothing about H-1B visas, which provide a pool of “high-skill, low-wage” foreign workers inside this country. Firms like IBM, Microsoft, and Oracle hire them after they finish graduate study here, and they can stay for six additional years. Since most are still young, they accept salaries lower than would be asked for by similarly trained Americans. ↩
Quoted in Peter Schrag, Not Fit for Our Society: Nativism and Immigration (University of California Press, 2010), p. 186. James P. Smith and Barry Edmonston add that “when they go out to expensive restaurants, have their cars washed, and have their clothes tailored…households derive considerable economic benefits from immigration.” See their The New Americans: Economic, Demographic, and Fiscal Effects of Immigration (National Academy Press, 1997), p. 235. ↩
Paul E. Barton, “How Many College Graduates Does the US Labor Force Really Need?” Change, January/February 2008. ↩