A University Degree No Longer Confers Financial Security
September 15, 2011
Many believe that spending three or four years in college -- and accumulating huge debts in the process -- will boost their chances of landing a well-paid and secure job. But is the past a reliable guide to the future? There are good reasons for thinking that old patterns are about to change -- and that the current recession-driven downturn in the demand for Western graduates will morph into something structural, says The Economist.
The supply of university graduates is increasing rapidly.
- The Chronicle of Higher Education calculates that between 1990 and 2007 the number of students going to college increased by 22 percent in North America, 74 percent in Europe, 144 percent in Latin America and 203 percent in Asia.
- In 2007 150 million people attended university around the world, including 70 million in Asia.
- The best and the brightest of the rich world must increasingly compete with the best and the brightest from poorer countries who are willing to work harder for less money.
- At the same time, the demand for educated labor is being reconfigured by technology.
A university education is still a prerequisite for entering some of the great guilds, such as medicine, law and academia. But these guilds are beginning to buckle.
- Universities are replacing tenure-track professors with non-tenured staff.
- Law firms are contracting out routine work such as "discovery" (digging up documents relevant to a lawsuit) to computerized-search specialists.
- Even doctors are threatened, as patients find advice online and treatment in Walmart's new health centers.
Thomas Malone of MIT argues that these changes -- automation, globalization and deregulation --may be part of a bigger change: the application of the division of labor to brain-work.
These changes will undoubtedly improve the productivity of brain-workers and allow consumers to sidestep the professional guilds that have extracted high rents for their services. And they will empower many brain-workers to focus on what they are best at and contract out more tedious tasks to others. But the reconfiguration of brain-work will also make life far less cozy and predictable for the next generation of graduates.
Source: "Angst for the Educated," The Economist, September 3, 2011.
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