Relationship between level of education and earnings – flawed?

GREATER standardisation and computerisation of white-collar work and an increase in graduate numbers might be challenging the notion that ‘learning equals earning’.

So say British social scientists Phillip Brown, Hugh Lauder and David Ashton in their book, The Global Auction: The Broken Promises Of Education, Jobs And Incomes. Speaking to The Straits Times, Professor Brown, 55, from Cardiff University, said a university education is better seen as an opportunity to pursue subjects students are passionate about and find intellectually exciting.

Changing how they choose, he added, ‘would also offer Singapore a better chance of creating a new generation of innovators and inventors who go that extra mile because they are doing it out of genuine interest rather than simply for the money’.

Policymakers worldwide regularly link tertiary education to individual and national economic advancement. A knowledge-based economy, in fact, promotes the belief that more highly educated workers are needed to do the world’s thinking, while workers in emerging economies are limited to low-skill, low-wage jobs in manufacturing or service work, such as in call centres.

The thinking was this: Going to college equals writing a cheque with a lifetime guarantee of a well-paid job.

Yet underlying assumptions to this might be flawed. When he and his fellow authors spoke to business leaders and policymakers in China, India and South Korea, as well as those in the United States, Britain and Germany, they discovered there was a global auction for high-skill, low-wage work.

Employees may want to increase the value of their labour and earn higher wages, but companies wanting to maximise profits aim to lower their labour costs. So they will go where they can find workers with the skills they need, but who are prepared to accept more modest wages.

The dampening effect on graduates’ salaries is exacerbated by oversupply. In the past 10 years, undergraduate numbers have doubled. China alone has more university students than the US, and ‘is also producing more scientists and engineers, sometimes of a superior quality to those found in the West’.

At the same time, companies are now able to make low-cost products to world-quality standards. Multinationals, bolstered by government policies and the localised graduate boom, are placing R&D facilities alongside factories in those countries, close to booming new consumer markets.

All this has expedited Digital Taylorism. Taylorism refers to the large-scale, assembly-line manufacturing principles laid down by US industrial engineer Frederick Taylor. Digital Taylorism occurs when white-collar work is broken down into elements. The elements are standardised and computerised, such that they can be delivered by low-skilled, low- wage labour.

In addition to outsourcing of white-collar, back-office jobs such as data inputting, he explained: ‘Now the middle office is going too. Analysing X-rays, drawing up legal contracts and processing tax returns are examples of skilled jobs going offshore.’ These developments have created what he terms ‘a global war for talent’ for the best and the brightest. So while a university graduate can get a job, ‘he would have to work harder, longer hours to keep the job’.

What’s more, class distinctions among graduate workers are also emerging.

‘There will be a cadre of thinkers and decision-makers at the top – perhaps 10 per cent or 15 per cent of the total – but the mass of employees, whether or not they hold high qualifications, will perform routine functions for modest wages.’

Those with elite qualifications are more likely to be made ‘thinkers’, leaving those with garden-variety university degrees to be ‘doers’.

In England, this trend has left about a third of graduates with outstanding education loans from as far back as 1998 high and dry – they have not even reached the required modest re-payment salary level. Whether this group eventually sees a payoff depends on how well their society delivers new opportunities.

To students contemplating further education, he says: ‘Follow your dreams but also do your homework.’

Ask hard questions about your reasons for getting a degree, which colleges offer high-quality education and if you can get the job you want after graduation.

‘However you look at it, going to university gives you more chances of getting a job, even if it doesn’t deliver the house, the big car and holidays that everyone in professional jobs seems to have in the movies.’

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