The Economy's Varsity Blues

"Necessary but not sufficient." That's the verdict of a story in today's Wall Street Journal that examines whether a college degree is still the ticket to a better life. The supposed killer stat is this one:

In the economic expansion that began in 2001 and now appears to be ending, the inflation-adjusted wages of the majority of U.S. workers didn't grow, even among those who went to college. The government's statistical snapshots show the typical weekly salary of a worker with a bachelor's degree, adjusted for inflation, didn't rise last year from 2006 and was 1.7% below the 2001 level.

Here's the problem with those numbers:

1) I think government inflation numbers are still overstating the rate of inflation.

2) Government numbers may be understating wage growth. In fact, the Labor Department is currently devising a new wage measure.

3) The 2001 numbers come after a huge asset bubble that inflated economic performance to some extent.

4) The wage numbers ignore total compensation numbers, which include health and retirement benefits.

But for the moment, let's assume the WSJ's numbers are more or less accurate. I think this next hunk from the story is quite illustrative of the solution to this so-called problem:

College-educated workers are more plentiful, more commoditized and more subject to the downsizings that used to be the purview of blue-collar workers only. What employers want from workers nowadays is more narrow, more abstract and less easily learned in college.... Globalization and technology have altered the types of skills that earn workers a premium wage; in many cases, those skills aren't learned in college classrooms.

The story concludes with these quotes by the "real person" in story, Bea Dewing, a woman who was laid off from Sprint's information-technology department in 2002 and bounced around for six years before landing at Wal-Mart this year:

Ms. Dewing has a newfound appreciation for how insecure any job can be and how little a college degree by itself stands for. "There is enough competition for entry-level positions that employers are going to ask, 'What else have you done in your life besides go to college?' " she says.

Me: Big surprise. College is the new high school, and workers need to view a four-year degree as a crucial educational milestone rather than the end of the education line. College is necessary but not sufficient. Let me also note that 70 percent of America's corporate tax burden—the second highest in the industrial world—is borne by workers. That is also something to look at.