Alms for the Educated

The Economist — MILLIONS of school-leavers in the rich world are about to bid a tearful goodbye to their parents and start a new life at university. Some are inspired by a pure love of learning. But most also believe that spending three or four years at university—and accumulating huge debts in the process—will boost their chances of landing a well-paid and secure job. Their elders have always told them that education is the best way to equip themselves to thrive in a globalised world. Blue-collar workers will see their jobs offshored and automated, the familiar argument goes. School dropouts will have to cope with a life of cash-strapped insecurity. But the graduate elite will have the world at its feet. …

But is the past a reliable guide to the future? Or are we at the beginning of a new phase in the relationship between jobs and education? 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. The gale of creative destruction that has shaken so many blue-collar workers over the past few decades is beginning to shake the cognitive elite as well. …

Several economists, including Paul Krugman, have begun to argue that post-industrial societies will be characterised not by a relentless rise in demand for the educated but by a great “hollowing out”, as mid-level jobs are destroyed by smart machines and high-level job growth slows. David Autor, of the Massachusetts Institute of Technology (MIT), points out that the main effect of automation in the computer era is not that it destroys blue-collar jobs but that it destroys any job that can be reduced to a routine. Alan Blinder, of Princeton University, argues that the jobs graduates have traditionally performed are if anything more “offshorable” than low-wage ones. A plumber or lorry-driver’s job cannot be outsourced to India. A computer programmer’s can. (09/05/11)

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