The unemployment crisis by education
By Mike Konczal
Live at The Week, Brad Delong writes Does Washington care about unemployment?:
Today, the unemployment rate is kissing 10 percent. Global financial markets are sending us a message that the excess demand for high-quality financial assets is growing again.
Yet, unlike 1983, there is no sense of urgency in Washington. ...
A degree of panic would be more appropriate — along with a commitment to use that panic to drive job creation. The combination of unemployed workers and unmet national needs makes this a uniquely propitious moment for the U.S. government to spend more and tax less. The government’s long-term fiscal imbalances will eventually require us to reverse the mix — to tax more and spend less — so that we arrive at 2020 with a smaller national debt than previously estimated. But that is the wrong policy for today’s emergency. ...
But whenever I wander the halls of Washington these days, I can’t help but think that something else is going on — that a deep and wide gulf has grown between the economic hardships of Americans and the seeming incomprehension, or indifference, of courtiers in the imperial city.
Have decades of widening wealth inequality created a chattering class of reporters, pundits and lobbyists who’ve lost their connection to mainstream America? Has the collapse of the union movement removed not only labor’s political muscle but its beating heart from the consciousness of the powerful? Has this recession, which has reduced hiring more than it has increased layoffs, left the kind of people who converse with the powerful in Washington secure in their jobs and thus communicating calm while the unemployed are engulfed in panic? Are we passively watching an unrepresented underclass of the long-term unemployed created before our eyes?
The idea of a permanent underclass of long-term unemployed completely disconnected from the job market has been increasing year in and year out, and in this crisis it may take on a serious hold for sizable chunk of the American population.
I want to see if the idea of a break by education holds up in the data. I grab U3 unemployment by education level from bureau of labor statistics for those without a high school degree, those with a high school degree only, those with some college but without a bachelor degree, and those with a bachelor degree or above. All data is for people age 25 year and over. This data separated by education only goes back to 1992. Here it is plotted:
(Click through for larger image.) As you can see, this crisis has been more devastating for the less educated in society. But how does it look comparably? I take the same data, and subtract the U3 unemployment rate for college graduates and above for each of the top three education lines.
(By definition the college graduate line is zero for all years, since it is college graduate percentage minus college graduate percentage.)
What’s interesting is that the unemployment rate above college graduate is consistent, or declining out of the 1992 recession, from 1992 to 2006. High school graduates had 3 percent higher unemployment rate over college graduates during the boom of 95-99, the crash of 00-03, and the weak jobless recovery of the "Greatest Story Never Told" economy of 04-07. In good times as in bad, this was consistent, and not since the 1992 recession has there been a disconnect. But during this crisis, it has skyrocketed; high school graduates now have 6 percent higher unemployment than college graduates.
Is this part of the weak reaction? I don’t know. People who have been reporting only in the last 15 years haven’t seen this kind of disconnect. Are there other ways to quantify this you can think of? But we can see that the lowering tide is not sinking all boats in the same way.
Washington Post Editors
June 1, 2010; 2:17 PM ET
Categories: Charts and Graphs , Economy , Education , Financial Crisis | Tags: economic hardship, job creation, recession, unemployment, widening inequality
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