Education Achievement And Unemployment

This Great Graphic was on re-posted on Business Insider from Calculated Risk. It charts the changing unemployment rate for different education levels in the US.

It shows that those at least a four-year degree experience significantly lower levels of unemployment, and get hit less hard during economic downturns (the blue bars).

Work associated with less formal education may be more susceptible to competition from technological advances as well as low wage competition from abroad.

Consider that the US grows agricultural products as do many developing countries. One key difference is that the production in the US is capital intensive not labor intensive. It appears that what would be low skilled work in a developing countries may require higher skill and greater knowledge. Given the number of computer chips in a modern automobile, increasingly even car mechanics in the US may find an advanced degree helpful.

This is not controversial. The debate seems to be more over the cost of college education. The danger is that the cost of the college degree is continuing to rise and out of reach of an increasing number of people. This in turn is contributes to the unprecedented level of inequality. Credit, now extended by the federal government, is the way the circle is being squared. This is not a reasonable or sustainable solution. The delinquency and default rates are rising.

There is an ongoing debate in the traditional and social media space, mostly by those who have at least a 4-year degree, about whether a college education is still a reasonable investment. Surveys continue to show the vast majority of parents want their children to go to college.

It goes against the political tide of fiscal consolidation and the shrinkage of the discretionary part of the federal government's budget, but a program, like the old G.I. Bill, but broader, may be desirable. In the dozen years after its inception, 2.2 mln veterans went to colleges and universities under the program and another 6.6 mln received some kind of training. The program, incidentally, also provided low interest rate loans to buy a house or start a business. Some critics may say this is Socialism, but none called the 8.8 mln vets socialists. It has generally been seen as a success, contributing mightily to the economic prowess of America.