Boom and bust of the cognitariat

Posted: 5 March 2014 in Uncategorized
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Liberals and conservatives agree on one thing: the answer to the declining fortunes of the American working-class is more college education.

As workers’ wages have stagnated over the course of the past three decades, and as the real wages of workers with a high school education have actually declined, the solution offered by countless politicians and economists on both wings of the mainstream political spectrum has not been structural change but, instead, more education. “Get a college education,” they pontificated in unison, “and your problems will be solved.”

The increase in wages and employment of college-educated workers during the technology boom of the 1980s and 1990s appeared to confirm their view, and to excuse the escalating costs of a college education (and the growing indebtedness on the past of college students). Now, the fortunes of the cognitariat have gone bust. They have increasingly joined the ranks of the proletariat, and added to the already-enormous pressures on those below them in the educational hierarchy. The result, in the past decade, has been wage stagnation across the board.

That’s the central thesis of recent research by Paul Beaudry, David A. Green, and Benjamin M. Sand. Their argument is that the Information Technology revolution ended in 2000 and that, as a result, there has been less need for cognitive workers, which not only led to stagnating wages for college-educated workers but had a cascading effect through the rest of the labor market.

The reduction in demand for cognitive jobs during this period implies that high-educated workers switch, in part, to accepting routine jobs. This movement of high-educated workers into the less skilled occupations amplifies the push of less educated workers toward non-employment. In fact, less educated workers move out of cognitive jobs because of the decrease in demand for those tasks, and they move out of routine jobs both because of decreased demand and because of increased supply to those jobs by the higher educated individuals. In this sense, employment has what we think of as a cascading nature, with more skilled workers flowing down the occupation structure and pushing less skilled workers even further down. Hence, even though the major change in the bust period relative to the boom period is the shift in the demand for cognitive jobs, non-employment increases among the less-educated as this is the main escape valve for the labor market.

The net result has been stagnating wages and decreased employment in both the cognitive and routine sectors, an increase in employment in the low-wage manual sector (as the rising fortunes of the tiny minority at the top led to increased demand for the services performed by manual workers), and decreased employment rates as the least educated have been forced out of the labor market altogether.

So, what does this mean for the idea that a college education is the solution to all our problems? According to the authors,

having a BA is less about obtaining access to high paying managerial and technology jobs and more about beating out less educated workers for the Barista or clerical job.

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