That’s according to Jordan Weissmann at the Atlantic. Weissmann explained that a recent (oft-cited) Georgetown University study determined that the country needs more college graduates using this method:
[Researchers] reached [their] conclusion in their 2011 report by using the college wage premium — how much more bachelor’s holders make compared to everyone else — to try and model the changing demand for college graduates over time. Then they look at the actual number of young people getting degrees. As of 2010, demand was far outstripping supply.
But something seems intuitively off about their findings. The college wage premium has essentially been frozen for a decade, even as earnings for high school grads have actually fallen. If there was such intense competition for college-educated talent, you’d expect it to continue rising.
Right, because, well, when you get right down to it, if college graduates were really in demand, wouldn’t we be paying them really well? Wouldn’t we be offering them health care and nice retirement plans rather than internships?
College graduates certainly make more money than high school graduates, but that doesn’t mean they’re in huge demand. Think about it this way: a newspaper editor makes more than a retail clerk. Does that mean the world needs a lot more newspaper editors? Well no. A better indication of demand here would be if newspaper editors make more money than they used to. They don’t.
Similarly, in the last decade the wages of young people with only high school
degrees credentials dropped by by 10.1 percent. The wages of recent college graduates declined by only 5.4 percent. What seems to be happening is this: graduates look like they’re making a lot more money than high school graduates than they used to. That’s true, but it’s really just because mere high school graduates are making a lot less money.
Obviously what’s going on here is more complicated than the newspaper editor example. There are long-term economic trends and short term ones. During recessions everyone has trouble finding a job. But it’s not clear that over many years the economy will benefit much from a huge increase in college attendance. If there’s no real need for a great percentage of college graduates in America, the wage rate for that group will actually fall. High school graduates’ wages will probably fall more, but let’s keep this in perspective.