College For All; Good Jobs For A Few?

A recent study by the Center for Policy Research (CEPR) asks the question that must be on the minds of college grads, now working as coffee shop baristas: “Where Have All the Good Jobs Gone?” The answer: swallowed by corporate profits and the personal portfolios of the ultrawealthy.

Despite the fact that the American economy has experienced “enormous” productivity gains since the late 1970’s, the study finds that the number of “good jobs” (defined as those paying at least $37,000 per year, with employer-provided health insurance and an employer-sponsored retirement plan) has declined from 27.4 percent in 1979 to 24.6 percent in 2010.  This discouraging trend was strong even before the onset of the country’s economic crisis: in 2007, the year before the onset of the recession, only 25 percent of college grads had “good jobs.”

CEPR notes that the prevailing explanations for the failure to share productivity gains are “technology” and lack of necessary skills among American workers. But, if this were true, the CEPR study argues, one would expect college grads to have a higher share of good jobs than they did 30 years ago. They don’t. Instead, at every age level, today’s college grads are less likely to have a “good job” than their 1970s counterparts. This is especially surprising, the researchers note, since twice as many Americans now have advanced degrees as compared to the 1970’s.

In sum, researchers report, the economy lost fully one third of its capacity to generate “good jobs” during the period covered by the study. This doesn’t mean that the economy and incomes weren’t growing; just that labor’s share of that income has plummeted. Indeed, according to FRED – the research report of the Federal Reserve Bank of St. Louis – labor’s income share dropped to a 60 year low last quarter – the lowest on record.

All this leaves today’s youth in a Catch 22. They’re paying outrageously high college costs and staggering under record college debt, only to graduate and find that there aren’t enough “good jobs” to go around.  Yet, foregoing college isn’t the answer: the evidence still points to the value of a college education, with one recent study showing that, on average, college graduates earn about $1 million more in lifetime earnings than do workers with only a high school education.

So what is to be done? The CEPR researchers argue that it is policy and policymakers – not the immutable laws of nature and economics – that brought about these problems. The critical component? It’s the loss of workplace “bargaining power” which dropped union private-sector union density from 23 percent in 1979 to close to 7 percent today. That is, an essential problem is the ongoing destruction of the private sector labor movement which accelerated under the restructuring of the U.S. economy during the “Washington consensus” era of globalization.*

Indeed, another recent study concludes that unions help to “institutionalize norms of equity” in the larger community, thus helping to raise wages and working conditions, even for non-union workers. According to the study’s authors, “the decline of organized labor explains a fifth to a third of the growth in inequality – an effect comparable to the growing stratification of wages by education.”

And so here we are, fewer unions, greater inequality, and talented college grads on the hunt for decent work that is harder to find than ever.  At some point, Americans may connect the dots and realize that unions help to create greater opportunities for everyone – even (and perhaps most especially) college graduates. The sooner we do, the better for us all.

- Randall Garton

*****

* In addition to de-unionization, CEPR cites the smorgasbord of neo-liberal and neo-conservative economic policies of the past several decades, including inequitable trade policies that encouraged the offshoring of manufacturing to low-wage nations, “dysfunctional” immigration policies, outsourcing, contracting out, privatization, etc..

This blog post has been shared by permission from the author.
Readers wishing to comment on the content are encouraged to do so via the link to the original post.
Find the original post here:

The views expressed by the blogger are not necessarily those of NEPC.

Randall Garton

Randall Garton is the Director of Research and Operations at Albert Shanker Institute.