Yesterday the New York Times ran an editorial on higher education that made sense — in part, anyway. Responding to Fed chairman Ben Bernanke’s assertion that educational differences are a root cause of income inequality, the editorial writers observe that while there is a correlation between college education and higher earnings (as well as lower unemployment), that correlation does not mean that putting more people through college is a cure for either low incomes or unemployment. They mention two important facts: Recent college grads have the same level of unemployment as non-college workers, and many of those who do have jobs are doing work that calls for no advanced academic training. Too bad they didn’t also say that the latter point has been true for a long time.
But an NYT editorial just wouldn’t be an NYT editorial without doses of egalitarianism and statism. The writers wring their hands over the degree of income inequality in the U.S., assuming that whatever the proper gap between the earnings of the very rich and of the poor, it should be less than it is. And then we get the notion that “without a concerted effort to develop new industries, the weakened economy will be hard pressed to create enough better-paid positions to absorb all the graduates.” No elaboration on that, but they’re suggesting that some government policy would lead to the development of new industries that would have enough better-paying jobs for all those college graduates who presumably are worth paying good salaries to because of their education. More jobs at good pay in new industries! Just enact some new programs and watch it happen.
Sorry, but new industries will only develop through entrepreneurship, something the government can’t mandate. We would no doubt have more of that if the federal government would dismantle its many barriers to business creation, but the Times would never suggest that capitalism works better when not impeded by innumerable mandates, prohibitions, and taxes. Furthermore, even if new industries do develop, there is no reason to assume that most of the work will be at wages high enough to compensate for the cost of college. Maybe or maybe not — only competition will determine that.
So, one cheer for the editorial for resisting the idea that processing more kids through college will solve our problems. Boos for the rest of it.