such change has been driven by a decline in the demand for highly skilled work—the opposite of the conventional wisdom about such demand. The employment rate in “cognitive” occupations—managerial, professional and technical jobs—increased markedly from 1980 to 2000…but it has since stagnated, even as the supply of skilled workers has continued to grow.
Orzag points to automation as the culprit for this sudden reversal of demand:
Many jobs that once required cognitive skill can be automated. Anything that can be digitized can be done either by computer or by workers abroad. While the “winner take all” phenomenon may still mean extremely high returns for workers at the very top, that may be relevant for a shrinking share of college graduates.
This is undoubtedly true. Technology has always displaced the need for certain jobs as it advances. But we are hesitant to tag this as the beginning of the end of skilled labor, for even as technology displaces old jobs, it paves the way for new ones. Just as the end of the agricultural economy led to the rise of the industrial economy, the end of the manufacturing economy will lead to the information economy, which will create new jobs in the service sector. The jobs market will scream for life coaches, entrepreneurs, personal financial analysts, and ballet teachers—all of which require cognitive skill.The real problem, as Tyler Cowen points out, is that the skills colleges teach are outdated. The higher education model no longer matches the demands of the jobs market. The modern college system was designed to train people to work in the corporate and government bureaucracies of the 20th century, which required a large number of educated people to process information. This is exactly the kind of work that is now being automated, yet colleges haven’t adjusted their curriculums to prepare students for life in the service economy. We still need educated people, but they need to be the kind who are resourceful enough to identify which jobs the market is hungry for.High schools and colleges need to stop preparing students for a world that no longer exists.[College quad image courtesy of Shutterstock]