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The Death of Average

In August 2015, Democratic presidential candidate Hillary Clinton released a major statement on college and university education. It was a sweeping Obama-esque kind of transformative initiative aimed at public expectations, parental aspirations, and the dreams of millions of young Americans. Clinton promised that, if she were elected, her government would provide massive increases in funding for universities, free college tuition, and major changes and many billions of dollars’ worth of other electoral goodies, all tied to the usual Learning = Earning formula of youth career preparation.

The Clinton plan is not simply unwise, but for a number of reasons it is counterproductive, reinforcing the false dream of millions of American young adults and putting increased national emphasis on one of the most narrow and uninformed public policy priorities of this generation: the idea that higher education always equals more income. America already has a college and university participation rate that is arguably too high, and now Clinton wants to expand it. In an interview, she said, “I want every parent to know that his or her child can get a degree or you can get one yourself.”[1] One hopes that she meant every child or person sufficiently intelligent and motivated can get one.

If the United States somehow had an endless supply of jobs requiring a college degree—something that is clearly not the case —her statement would make sense. True, the plan will not fund students at private colleges, only at public ones, but the prospect of free tuition at state universities and colleges is bound to increase enrolment, especially in the absence of strong entrance requirements. Is a college degree or diploma really the answer to America’s social and economic problems? Of course the United States has serious problems of social and economic equality, but higher education is not the panacea that by itself will cure them; certainly pouring more money into the system isn’t the answer. As it is, there are some private colleges with relatively low tuition fees (Berea College in Kentucky charges $870 a year), and the Clinton plan doesn’t pay for living expenses. There are a number of sources of money already available to needy students; notably, for Americans, the Pell Grant, which provides up to $5,700. There are a good number of public colleges with tuition fees lower than that.[2] And then there’s the question of fraud. The rules to prevent this aren’t clear, but you’d have to be naïve to doubt that fraudsters are already devising schemes to profit from Clinton’s plan, should it be enacted. It’s an all-round bad idea.

Disappearing Jobs and Careers

The obsession with the Dream Factories has become a serious American problem, and a global one too. While there are always improvements that can be made in the world’s most complex, comprehensive, and diverse post-secondary system, the reality is that governments—and politicians like Hillary Clinton—are looking at the wrong end of the problem. As economist James Bessen wrote, “This is today’s great paradox. Since the beginning of the personal computer revolution, the median wage in the United States has been stagnant. Information technology may even be hurting many white-collar workers, especially those with a college education. Voice mail systems have taken over from switchboard operators, automated teller machines do tasks of bank tellers, and computer systems have automated a whole range of routine clerical tasks. Workers in these occupations have to find new jobs or learn new skills to remain employed.”[3] For a generation, hoping to reproduce the positive and career-building experiences of the 1960s and 1970s, North American politicians and government officials have expanded the university and college system, believing that preparing an infinite number of young people through undergraduate education was the key to national competitiveness and personal opportunity.

For the college and university dream to work, graduates have to find stable jobs with decent salaries and good career prospects. Students, parents, governments, and institutions can control the input—the number of enrollees and a considerably smaller number of graduates—but the second half of the equation—careers—is tied to the vagaries of the global economy. In a crucial study of the technological revolution, Rik Brynjolfsson and Andrew McAfee argued:

[D]igitization is going to bring with it some thorny challenges. This in itself should not be too surprising or alarming; even the most beneficial developments have unpleasant consequences that must be managed. The Industrial Revolution was accompanied by soot-filled London skies and horrific exploitation of child labour. What will be their modern equivalents? Rapid and accelerating digitization is likely to bring economic rather than environmental disruption, stemming from the fact that as computers get more powerful, companies have less need for some kinds of workers. Technological progress is going to leave behind some people, perhaps even a lot people, as it races ahead … [T]here’s never been a better time to be a worker with special skills or the right education, because these people can use technology to create and capture value. However, there’s never been a worse time to be a worker with only “ordinary” skills and abilities to offer, because computers, robots, and other digital technologies are acquiring these skills and abilities at an extraordinary rate.[4]

The evidence shows, in fact, that the North American drive for more and more tertiary education has outstripped the needs of the modern economy, and that the resulting underemployment and unemployment has caused serious difficulties for a large portion of the current generation. And yet what passes for policy innovation in North America rests on doubling down on a failed and failing system. This is a gamble that the solutions of the 1970s, having fallen short of objectives for a generation, will somehow come right and solve the problems of the 2010s and 2020s.

New Technologies But Fewer Jobs

What is missing in Clinton’s strategy—and what is missing from political and public-policy debate across North America—is a serious consideration of the transformations affecting the modern economy. Ultimately, the mismatch between the degrees and expectations of university graduates and the job market is only half the story. The first fifteen years of the twenty-first century have seen the worldwide transformation of work through technological change. In sector after sector, machines and digital technologies have replaced workers, initially in small numbers, but increasingly in the thousands. The changes happened first in industrial and resource industries, destroying thousands of jobs in forestry, pulp and paper, and manufacturing. The transformation spread into the service sector, with online banking changing the roles of bank clerks, and with e-commerce and other technological solutions undermining work in many other economic sectors.

Even though the transition remains in the early stages, the mass use of robots has undercut a great deal of industrial labour. Henry Ford would have loved the almost worker-free assembly lines of the modern automobile factory, but North American workers are less impressed with the mounting job losses, made worse by the shift of factories to Mexico and other low-wage countries. There are many other examples. The development of computer-based income tax forms and e-filing has disrupted the personal accounting profession. Amazon.com, famous the world over for its e-commerce operation, is truly impressive as a technologically enhanced retail company, with modern, computer-controlled and automated warehouses. But spare a thought or two for the thousands of former warehouse workers being displaced by these new technologies.

The world now faces the real prospect of continued accelerated change and rapid job loss. Autonomous oil rigs and remotely controlled mining operations promise to eliminate thousands of jobs. The first autonomous oil rig in the Arctic went into operation in 2015, and Australia’s desert mines have been world leaders in remote-controlled extraction. The impact goes far beyond the miners and oil rig workers. Removing the front-line workers means immediate declines in on-site support staff, worker transportation, accommodation services, food and other delivery systems, and the related administrative activities. Companies wishing to stay competitive—particularly when working in high-cost remote regions, where extreme weather (e.g., 120°F in the Australian outback and -50°F in the Arctic) add to the difficulties of recruiting, retaining, and caring for workers—are strongly tempted to automate their operations as much as possible. But the job losses filter throughout the economy, cutting back on opportunities for young workers.