Sadly, we can’t all become the face of a new perfume or have our own line of designer headphones. So, our best option is to figure out why the uphill battle to pay our bills is getting worse and fix it.
Older Americans believe our struggles stem from a lack of ambition, that we have gotten lazy. But it’s difficult to find motivation when it seems there is little reward for hard work. And the shrinking reward is well documented – in the form of lower earnings (down 3% over the last decade for full-time workers aged 18-34, in constant dollars) and higher unemployment rates (16.8% for ages 16-24; 9.8% for ages 25-34), which has saddled us with a massive $1 trillion in student debt.
But older Americans have it backwards. We did not randomly decide to become lazy and accrue debt. What they see as lost ambition is our discouragement from lost opportunities for success. Right as more of us are investing in higher education and going to college, the jobs being created for us to fill overwhelmingly require only a high school degree or less. And it’s not getting better. According to the Bureau of Labor Statistics, over the next decade almost 7 out of 10 new or replacement jobs in the economy will not need a college education, the same share as jobs in the economy today.
That means we are all feeling the strain as more as us compete for a smaller share of middle- and high-skill jobs, the jobs that pay a decent salary. Even Kim K and Snooki feel the strain, struggling to compete. We constantly see these reality stars forced to up the ante (or “work” in their terms) to stay relevant, with attention grabbing headlines like a 72 day marriage and a reported pregnancy. After all, there are many Bachelorettes, Real Housewives, and Teen Moms vying for their jobs. Their antics make sense in this regard – what are their alternatives if they let the spotlight get away? They almost certainly would have to take a pay cut as their technical skills are questionable. It’s a tough world out there. Obtaining the skills our parents had won’t take the cake anymore, let alone guarantee a slice.
Recent college grads are among the worst affected. Sure, those of us with college degrees are more likely to find work than non-graduates. But too many of us are working jobs that do not use our degree or brain power. Too many of us are accepting jobs that we could do with a high school diploma, and our salary shows. College grads aged 18-34 with full-time jobs saw a 14% drop in earnings since 2000 (in constant dollars). And for the few high-skill jobs that are out there, those with standard issue liberal arts degrees need not apply. That’s not encouraging for the 1.6 million college graduates in 2009, of which just 5 percent of had a degree in engineering. More studied visual and performing arts.
Indeed, too many of us feel like we might have more success making an explicit video or participating in a drunken escapade on the beach and getting arrested. Just ask Judge Judy. Or Maury.
But not going to college could be even worse. If college grads are taking the best of the non-degree jobs, then those of us without a college degree are essentially squeezed out to worse jobs (or no job), and almost certainly will take a pay cut to compete. We are thus forced to choose between two evils, with college winning for the wrong reasons.
What happened to the mid-level job market? Look no further than the economy. The economy – more specifically, the value we contribute to the economy, has relied too heavily on spending and borrowing over the last decade. The reality is we have an economy driven by debt fueled consumption instead of investment and innovation (brain power). As a result the majority of today’s jobs are in areas like retail and heavily subsidized healthcare.
Should that mean we should surrender to our fate, live with our parents forever, and allow Judge Judy be the most intellectual time of the day? Of course not. It just means we have to take matters into our own hands instead of spending our time trying to become the next Kim K or Snooki.
To increase the number of opportunities, the number of high-wage, high-skill jobs, we must make better use of our increasing education. The fact is we can’t earn more than the value we create, and the only way to create more value is through innovation, through developing the next line of goods and services that will enhance our competitiveness. Higher education is the only way to sharpen our skills and develop our human capital; it has always led the way to lower unemployment and higher earnings.
Instead of getting frustrated at the lack of opportunities, putting aside our ambitions and accepting a future where our quality of life is worse than our parents’, let’s step up to the challenge. Let’s accept being globally competitive is a constant struggle: we will never stop having to work for it. We have to throw away our false expectations that we are owed a good life without adding value to the economy. Singer Flo Rida talks of his ambition to be the next billionaire in “Good Feeling”, but his only qualification appears to be that his “mama knew he was a needle in a hay stack.” That’s not going to cut it. It never did.
Hopefully we can get excited at the prospect of earning enough to pay for rent and a private island getaway without winning American Idol, excited at the prospect of working at a job that uses our brains and skills. We can get there, we have the potential. But, in the words of singer Ciara, we are going to have to “work, work, work, work.” And there is some encouragement out there. Already the labor market showed signs of thawing over the last few months, in sectors outside of retail.
We may not be the next Kim K or Snooki. But we need to be in a world where that’s still okay, where we know we can be successful with hard work, motivation, and good ideas. Let’s recapture lost opportunities, make new ones, and make an act two that even Clint Eastwood can be proud of.