Tuesday, June 15, 2010

Education and Jobs Through 2018

There is a great report out this morning from the Georgetown University Center for Education and the Workforce: Help Wanted: Projections of Jobs and Education Requirements through 2018.  The report documents, in 110-odd pages of detail, recent trends in workforce demand for various different occupational categories, and how much education matters to them, as well as making projections out to 2018.  For example, the graph above shows the drastic decline in the fraction of non-college educated workers since the 1970s, and projects that it will continue through 2018.  Regular readers of this blog will be unsurprised.

This report is not by a bunch of wild-eyed technology visionaries, but rather by buttoned-down labor economists.  That has advantages and disadvantages.  On the plus side, there is massive, solid, well argued detail here - no flights of fancy, just lots and lots of statistics and analysis, and relatively uncontroversial short-term extrapolation.  On the other hand, the situation with respect to the Singularity overall is akin to "Is our spaceship headed into the Sun?"  A report that says "The spaceship temperature will be three degrees higher next month" is a useful piece of evidence, but somehow misses the main point.  I wish they had tackled the "What will it be like in 2050?" question, at least briefly.

For example, if you stare at their Table 1 for a minute or two:

This shows the change in your likely position in the income spectrum based on education.  The big story is obviously that in 1970, high school dropouts and graduates were mostly middle income, and now the dropouts are mostly lower income, and the high school graduates are increasingly at risk of that too. And then ask yourself - what will another forty years like the last forty do?  I would tend to guess that the great bulk of non-college-educated folks will form an unemployable underclass by then.

The position of the report is that we need to ramp up the amount of secondary education to compensate.  And certainly, in the short term that makes a lot of sense.  However, in the long term, I think the questions run much deeper.  Remember, half the population has IQ below 100.  Will all of those folks benefit from a college education?  What are we going to do with the rest?  What kind of society will we have with a very large unemployable underclass?

A few more highlights that caught my eye.  Here is the wage premium associated with using computers in your job, by education:

Clearly, using technology always increases your value, but the more education and skills you have, the bigger a multiplier technology gives you.  Thus information technology is a fundamental driver of income inequality.

Next is another chart providing more detail on how education correlates with income:

This next one shows the shift in wages in various occupational categories and education levels between the mid eighties and the mid aughties:

(Here STEM = "Science Technology Engineering Mathematics" - ie people like me).  Besides the general shrinkage of real income for uneducated workers, note how in Food and Personal Services, flooded with applicants, wages even for educated workers have shrunk dramatically.

Finally, here is the average real wages for various education categories:

I expect, over time, even a Bachelor's degree won't be enough to protect your income.

Folks face rather a Hobson's choice here: do you work with the technology, and thus enable this overall trend?  Or not, and make your chances of success in life that much poorer?


Datamunger said...

This wouldn't be much of an issue if China, Mexico, India, etc didn't exist. i.e. If everything used in the OECD had to be manufactured in the OECD...how would there be a problem?

In addition, the poor of the developed world pay little or no taxes, get free food & health care and often get direct income support. I'm not complaining...this is at it should be. In fact, things should be beefed up a little, even at my expense via taxes. My point is: they are not abandoned.

I can't rule out this singularity business long term...but in the meantime, looks like a low-skilled labour glut to me. Globalization is screwing those with modest skills much more than tech is.

Datamunger said...

I'll go on the record supporting protection of manufacturing etc via import tariffs. It is much better for people to have jobs than be idle. It's a tax on everybody else. But we may have to swallow it & fix the exchange rate issue too.

Greg said...

Datamunger... what about the report that Foxconn is considering closing down its factories in mainland China (eliminating 800,000 -- 800,000! -- jobs) and replacing them with an automated factory in Taiwan? If it makes sense in China, it makes even more sense in the USA.

Automation can compete with ten-dollar-a-day jobs already; how long before it's competitive with $5-a-day, then $2-a-day? At that point you're below the global poverty threshold, literal 'starvation wages.'

The 'singularity' thing (wholesale automation) might be closer than you think. The low-skilled labor glut might be about to become permanent--say hello to the Food Stamp Civilization.

It's a good thing that Stuart is thinking about this--some-one needs to!

MisterMoose said...

The singularity may or may not happen any time soon, but we will see robotics replacing human labor for more and more jobs (and not just on the low end; how many secretary/receptionists have been replaced by voicemail systems?). Computers have made us so productive that only a few million people around the planet are actually needed to produce all the stuff that the other 6+ billion consume. When the fruit-picking robots begin to compete with migrant Mexicans, then we will know that the end is near...

So, will we all have to become socialists to share the wealth that the robots create for us? Or, will there be a relative handfull of owners who control all of the means of production, with the rest of us starving in the streets?

Actually, none of the above. Peak Oil and other resource depletion will put an end to the ever-onward and upward curve of human progress before we get to that point. After the fossil fuel economy collapses, a lot of PhDs are going to be out of work, and all those currently-underemployed able-bodied laborers will be the ones to survive (because they can do all the work that the fossil-fuel-powered machines will no longer have the fuel to do).

Millions of people left the farms for jobs in the cities when fossil fuels made it possible for machines to do the work previously performed by muscle power. When the fossil fuels go bye-bye, the trend will reverse, and we'll all end up as subsistence farmers again. Won't that be fun?

Datamunger said...

Greg, if automation can compete with $10/day jobs then wage arbitrage is on the way out. Much easier to move manufacturing back to the US.

Polls show even the tea partiers are big fans of Social Security & Medicare. Being on the federal dole is entrenched already. Which will be affordable if the machines will be as cheap & powerful as Stuart thinks.

As for them taking over....read Kurweil's The Age of Spiritual Machines for the schedule. It's already way behind. Even his estimate for 2010 of the computing power available for $1000 retail (inflation adjusted) is off by several factors.

MisterMoose, Stuart believes renewables (and solar in particular) will take up the slack from FF.

MisterMoose said...


Boy, I sure HOPE solar panels and windmills will cushion the fall. BTW, are we still going to be in Afghanistan in fifty years to secure the lithium mines to supply all the rechargeable batteries that we'll need to store all that sunlight and wind power?

After Obama's speech last night several of the talking heads commented on this aspect of the problem: renewable energy supplies will depend on government subsidies for many years to come, since they aren't even close to being economically competitive with FF systems. Tax payers all around the world are already telling the Greek government workers and California teachers' unions to take a hike, and not a tax hike, because the money just isn't there. Well, the money just isn't there for continued subsidies for solar and wind power either. Look at what's going on in Spain, for example.

Maybe the Chinese can afford to build a couple thousand square miles of solar panels in the desert, but we certainly can't. In fact, the Chinese are actually going in the opposite direction, scarfing up all the FF resources they can in places like Sudan and Iran. The leaders in Beijing are acutely aware, based on their own historical experience, of what happens when the rural poor get too desperate, which is why they are doing everything they can to keep increasing their standard of living (which translates into increasing per capita energy use).

I agree with Bill Gates on this. We need to push R&D to bring the cost of renewables down to the point where they can compete with FF without endless government subsidies. If we can reach that point, then the future is secure. If we can't, then it's going to look a lot more like Mad Max than Kurzweil's future.

My personal preference would be to mine the moon and asteroids, move our heavy industry into orbit, build solar power satellites to beam down all the energy we could ever need, and live happily ever after. If we don't go up and out, we will certainly go down and out...

groo said...


as a compassionate numbers guy myself this question plagues me for a long time.

I framed it somewhat differently:

How should --and can-- a society be structured, given its members and their (intellectual) capabilities and desires?

My -well- humanistic answer was: it BASICALLY should be structured according
to those capabilities and desires.

Which is not what happens, ofcourse.

(Intellectual) capabilities can be modulated to some degree (IQ going up some 10 points).

Desires --as a societal norm-- nearly indefinitely.

So, depending on the society and its inherent dynamics, an increasing gap between capability and desire CAN develop.

This is a function of the respective societies.

In other words:
Every human has a certain capability for change.
But, if the overarching society stresses this capability over a critical point,
member will drop out and go into some opposite extreme.

Eg 'slow food', Transition movements, or even teabaggers.

They simply drop out of the phase-lock, which society as a whole enforces.

I am very ambivalent in advising my son, what to do:
Study engineering.
Learn some martial arts.
Do'nt give a shit about what they tell You about what the future will be.
It will be bad.
Be near to the soil.
Maybe the data reflect something of that.
Crowd wisdom?

Singularitarians (I lateley learned that Kurzweil is a fraud) are the 'head through the wall types', and certainly do not resonate with vietnamese sweatshop-workers.

Here we Westerners bet our lives on who will win.
And it is quite a silly bet. (Think of phony messages about Afghan $trillion mineral ressources.)