"This trend is likely to continue"

I am not convinced about this ... the economy (and particularly the non-manufacturing sectors) need to grow at a certain rate in order to absorb the college graduates. Further, these jobs are also at risk of being exported overseas.

"since not everyone can go to college"

True, not everyone can go to a four-year college, but plenty of people go to a community college to get an associate degree, or go to a vocational school for post-secondary training.

Posted by: Gautam Vallabha at May 31, 2003 12:34 PM | PERMALINK

I don't so much know that the argument that college grads will always be in the minority is correct. 63% of high schoolers last year went straight to college, a number that continues to increase every year. We now have a population of 80% high school graduates - what reason is there that 80% of people or more couldn't go to a Devry-style school or a university?

Posted by: cure at May 31, 2003 12:36 PM | PERMALINK

Though college grads earn more than those with lesser education, and have for a while, a fact that you don't mention is that even those who hold four-year degrees have seen their incomes fall relative the very highest echelons (i.e. CEO's).

In other words, inequality is increasing not only between those with degrees and those without, but *within* the group of degree holders. So, possession of a four-year degree is no longer reliable insurance against economic decline.

Posted by: Chloe at May 31, 2003 01:04 PM | PERMALINK

Is someone else making more than you evidence of an economic decline on your part?

Don't absolute terms (as opposed to relative) have to come into play somewhere?

Posted by: Brian at May 31, 2003 01:35 PM | PERMALINK

Of course college graduation doesn't inevitably lead to a "good" job. At this point in our history, college graduates have saturated the parts of the labor force where post-secondary education might be helpful --jobs that in the past were done more often than not (and just as competently) by the likes of Carl Bernstein (who, like most people in pre-1960s journalism, had no education past high school.) In the future, if a larger percentage of kids graduate from college, it will mostly mean that a higher percentage of truck drivers and Walmart associates will have college degrees.
If you looked at the numbers, however, I'm sure you'd find that what's been growing these past couple of decades isn't so much

Posted by: penalcolony at May 31, 2003 01:41 PM | PERMALINK

oops . . . isn't so much the number of college graduates as the number of people who start college but don't finish. And some sociologists see those people as an especially resentful group.

Posted by: penalcolony at May 31, 2003 01:44 PM | PERMALINK

It's the 4-year degrees that are mostly at issue here. These are the folks who make higher incomes, not the vocational school grads.

Right now about 35% of 18-24 year olds go to college (I'm not sure how many finish). It's really not likely that this number can rise an awful lot more.

Posted by: Kevin Drum at May 31, 2003 02:08 PM | PERMALINK

More than 30% of today's 30-to-34-year-olds are college graduates. A majority of today's kids enrolls in college; might be approaching 60%.

Posted by: penalcolony at May 31, 2003 02:35 PM | PERMALINK

So what would improve the position of unskilled workers? There doesn't seem to be a lot:

- technological change favoring unskilled work
- massive improvement in education
- public sector jobs
- restricted free trade
- restricted unskilled immigration

None seem particularly likely to happen.

Posted by: tc at May 31, 2003 03:30 PM | PERMALINK

Penalcolony: I dunno. According to the Dept. of Commerce it's 35%, not 60%:

http://nces.ed.gov//pubs2002/digest2001/tables/dt187.asp

Posted by: Kevin Drum at May 31, 2003 03:47 PM | PERMALINK

That's enrollment. Many 21-to-24-year-olds have already graduated and are no longer enrolled. And many from age 19 on have left college without graduating.

Posted by: penalcolony at May 31, 2003 04:02 PM | PERMALINK

Sorry, I should have said: that's enrollment at a given time -- a snapshot. Otherwise, if you put your Commerce table next to my Census table, you get the statistical illusion of a 90% graduation rate, and that's quite an illusion. Many schools graduate far less than half of those who start.

Posted by: penalcolony at May 31, 2003 04:11 PM | PERMALINK

Let's not ignore the deeper issue Kevin's touching on here. There is no such thing as a natural economic structure; it all results from the system of laws and practices that make up a political economy, and that system results from decisions people make.

The incentives in a viable, decent political economy ought to make it possible for people to live within the law, do what's expected of them, and live decently. This is where the decline of manufacturing, with its huge value-added component, has been such a harmful thing. Manufacturing largely underwrote this country's social transformation during and after World War II.

Of course a system of political economy is limited in what it can do-- it can't create resources by fiat, for example, and this is where the communist systems fell down. But that's a far cry from saying that it can't design or influence who gets how much in a society; in fact we do it all the time and we're doing it right now. The market is not nature. It is an abstraction of human behavior which shapes and is shaped by government policies and social practices. Even George Will said so at the height of the Enron scandals.

Posted by: Altoid at May 31, 2003 04:21 PM | PERMALINK

There's a third reaction:
We really need to improve our primary education system so that college admission is actually meritocratic:
The problem with the present system (from a justice point of view) is the incredible barriers and benefits that different people have going to college. Rich kids almost always get a 4 year degree, and really poor kids almost never do. The differences in primary education are HUGE. Particularly along racial and economic lines. Remember that the Texas plan that ensures that the top 10% from every school in Texas get into a Texas University had a major impact. Now, personally, I think its obvious that the top 10% of every school should get into college. BUT the education system is so warped that one can be the best student at a school (taking full advantage of the opportunities available) and still get an abysmal SAT score. We need to change that, and it will take a major reform of education (increasing teacher powers for discipline) AND it will take a lot of money (increasing teacher numbers).
Also, that 60% number has to include vocational school students. Obviously, getting a Cosmetology degree is not going to increase one's earning powers nearly as much as a B.S.

Posted by: MDtoMN at May 31, 2003 06:47 PM | PERMALINK

I'm suspicious about this "lack of resentment" thing. I'm not sure how it's measured.

When David Brooks says that middle class folks "aren't surrounded by things they can't afford," he blithely ignores the most significant social development of the century, namely, television. Many families see a lot more television than they do other people in their community, and television is chock-a-block with things they can't afford--not to mention the illusion that they would be much happier if they did own these things.

I think at least some of this lack of resentment (if there is such a thing) is attributable to the persistent belief people have that they, too, could one day be rich. You don't want to be hassling the winners--you want to be joining them.

Posted by: Realish at May 31, 2003 08:04 PM | PERMALINK

I don't know what to think about income mobility in the U.S. The Urban Institute Report that Drezner cites makes it sound good, but check out Alan Kreuger's NYTimes article from Nov. 14 -- available on-line at Krueger's web site at
http://www.irs.princeton.edu/krueger/intergen2.htm
Krueger writes that, in terms of intergenerational income mobility, what's remarkable about the U.S. in comparison with other countries is how *im*mobile we are: the extent to which the income of children tracks that of their parents.
(Incidentally, I don't understand a key sentence of Krueger's piece. He writes, "Only South Africa and Britian have as little mobility across generations as the United States." But does he mean that of all the countries in the whole world only those 2 do as badly as us, or that, as I find more likely, that of the countries in some select group (like those that made a certain study), only those 2 do as badly? But then, what are the countries in the select group? I can't tell from the context.)

Posted by: Keith at May 31, 2003 09:17 PM | PERMALINK

Sometimes "average" is used to mean median, but most commonly it means mean. I suspect that the article is referring to means, and I would be interested to see the corresponding comparison of medians. Krugman's widely reported "Bill Gates walks into a bar" example reminds us of the shape of income distributions, and under such a shape I would not even be surprised to see the change in medians have been negative between '79 and today. Does anyone have pointers to the raw numbers?

Posted by: Carl Manaster at May 31, 2003 10:23 PM | PERMALINK

Actually, when I said Drezner had the mobility thing right, I was referring to the fact that (a) mobility hasn't changed over time and (b) it's no better here than any other country. Social mobility is great, but it's a red herring unless we're somehow getting better at it to make up for the increasing income inequality.

I agree that intergenerational mobility is the more important statistic anyway. It's not nearly as high as individual mobility, although I've never been able to find really reliable figures about it.

Posted by: Kevin Drum at May 31, 2003 10:49 PM | PERMALINK

Check out Paul Krugman's article at:
http://www.pkarchive.org/
(click on 'American Economy' in the left-hand menu, then search for 'What the Public Doesn't Know Can't Hurt Us').

It turns out that this study is a bit flawed. Money quotes: (with a money quote inside, for extra money quotableness):

"This means, Armey asserts, that someone in the lowest quintile would be more likely to move to the highest than stay in place. Put kindly, it's a silly argument. For subjects of the study who moved from the bottom to the top, the typical age in 1979 was only 22. "This isn't your classic income mobility," Kevin Murphy of the University of Chicago remarked at the time. "This is the guy who works in the college bookstore and has a real job by the time he is in his early thirties.""

"In reality, moves from the bottom to the top quintile are extremely rare; a typical estimate is that only about 3 percent of families who are in the bottom 20 percent in one year will be in the top 20 percent a decade later. About half will still be in the bottom quintile. And even those 3 percent that move aren't necessarily Horatio Alger stories. The top quintile includes everyone from a $60,000 a year regional manager to Warren Buffett."

Posted by: Barry at June 1, 2003 06:08 AM | PERMALINK

Barry. Maybe considering a college kid with a part-time job at all is a bad idea. Clearly, his improvement in income in a couple of years skews the figures.
Perhaps his inclusion while getting paid minimum wage at a bookstore skews the figures. Of course, since the figures are whatever we say they are, he doesn't. What his inclusion does is skew conclusions drawn as if we're talking about full-timers.
And the jump from bottom quintile to top quintile is likely to be rare, but I would opine that bottom to middle is significant, not to mention satisfactory to a good many people.
The BS/BA by age 23 model of education is not representative of what's going on. Education is big business and that's not just K-12 and traditional college. It's hard to avoid running into one or two people every day who are taking classes in something post high school, at practically any age, and I dismiss the flower gardening class at community ed from this consideration. Most of them see this activity as improving their opportunities and they may be right.

Posted by: Richard Aubrey at June 1, 2003 03:17 PM | PERMALINK

The funny thing is that for many the college degree is just a piece of paper. Many grads come out without much knowledge of anything. The degree represents a certain degree of stick-to-it-ness and willingness to follow direction, but these people can't read or write or calculate much better than they did when they graduated HS. And the skills they *have* learned aren't necessary for the jobs they get. The main barrier to jumping straight to work is the degree; they aren't substantially better prepared after 4-6 years of 'study'. The biggest social benefit of the vast expansion of the college population is that it soaks up workers and lowers unenployment.

Posted by: Jim Lund at June 1, 2003 03:25 PM | PERMALINK

"From the ages of 18 to 65, the average male college grad earns $2.5 million over his lifetime, 90% more than his high school counterpart. That's up from 40% more in 1979, the peak year for U.S. manufacturing.

This goes to the heart of whether you think increasing income inequality is a problem."

This isn't a mysteriously evil cabal of capitalists trying to screw those who don't go to college. Manufacturing jobs are a) not as important to the economy, and b) easily done by fewer people due to mechanization. To call this an in come inequality problem is to totally mischaracterize the issue. It is not a 'problem' that we can manufacture items for much cheaper than we could in the 1970s. It is great that we can manufacture things for cheaper, so that poor people can afford VCRs and automobiles! To imply that there is an 'unfair' distribution of wealth by this statistic is to imply that progress and efficiency in manufacturing techniques is bad.

Posted by: Sebastian Holsclaw at June 1, 2003 04:51 PM | PERMALINK

Richiard, a summary of my post would be: 'that study is BS, and two good economists dissed it'.

I understand that that's pretty much irrelevant to what you said, so back to whatever you were saying.

Posted by: Barry at June 2, 2003 05:22 AM | PERMALINK

Barry, I didn't see that the dissing included the issue of counting part-timers in college.
The problem, IMO, with the study is the conclusions drawn. Studies are generally internally correct, as long as they get the arithmetic right.

Posted by: Richard Aubrey at June 2, 2003 06:20 AM | PERMALINK

Did they count Bill Gates among the high-school grads, or the college grads? He dropped out of Harvard and never graduated. I think Steve Jobs may not have finished college, either.

Posted by: Jon H at June 2, 2003 06:28 AM | PERMALINK

Yes, Richard, as long as one defines 'internally' small enough, all studies are 'internally correct'
(e.g., 'in biased samples using misleading measures, there was a statistically-significant-for-biased-samples difference on this misleading measure').

However, the study was garbage, in terms of measuring income mobility for anything other than college students, and probably using bad measures of income. Therefore, it shouldn't be used to discuss income mobility in the US without very large caveats.

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