Almost everyone agrees that education, innovation and human capital are critical to economic growth and security. And anyone who can’t find a job or is stuck with a low-paying job is told to acquire the skills necessary to succeed in today’s economy.
Unfortunately, the results of believing in that myth have been catastrophic. Earnings have stagnated or declined for everyone except the very top earners, even for those who have educational qualifications, and jobs that didn’t previously require credentials now do. College-educated workers are increasingly forced to take jobs in low-paying industries.
The skills gap is not why workers aren’t prospering. If it were, those with higher skills should be doing better, not worse. Instead, employees are victimized first by policy failure — since the economy is not operating at full employment, those who depend on their labor for living may not find work — and second by the deluded guidance of experts who point to education as a panacea for all their problems.
As the chart below illustrates, the most-educated workers have seen their wages stagnate for the past seven years, and everyone else has suffered outright declines. A new study by sociologists Richard Breen and Inkwan Chung found that most of the increase in inequality over the last three decades occurred within different educational attainment groups rather than between them (i.e. the gap isn’t between high-school and college grads but within different educational categories). Instead, inequality primarily derives from the top 1 percent and 0.1 percent taking an increasingly large share of the national income. Breen and Chung conclude that equalizing educational attainment would do little to ameliorate such inequality.