An Economics Nobel Laureate Posits a "Hollowing Out" in Skills Demand -- Degrees Per Se Don't Bring Dollars. (March 10, 2011)

George Bernard Shaw made the observation that "If all economists were laid end to end, they would not reach a conclusion"; which may give solace to those purporting "It is a truth universally acknowledged that education is the key to economic success. Everyone knows that the jobs of the future will require ever higher levels of skill."

But now comes the professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University who with over 750 columns dealing with current economic and political issues for The New York Times and the 2008 Nobel Memorial Prize in Economics to tell us that "what everyone knows -- is wrong".

By example Paul Krugman begins by noting: "the growing use of software to perform legal research. Computers, it turns out, can quickly analyze millions of documents, cheaply performing a task that used to require armies of lawyers and paralegals." And Professor Krugman continues saying that's not an isolated case: "[S]oftware has also been replacing engineers in such tasks as chip design. More broadly, the idea that modern technology eliminates only menial jobs, that well-educated workers are clear winners, may dominate popular discussion, but it’s actually decades out of date."

The term Professor Krugman employees to describe the change in the workforce in the United States beginning in the last decade of the 20^th century -- and there is no reason to think its much different in Australia -- is hollowing out, e.g. "high-wage occupations that grew rapidly in the 1990s have seen much slower growth recently, even as growth in low-wage employment has accelerated." So in fact those routine repetitive tasks which were the province of the white-collar non-manual  worker is increasingly becoming the province of computers; in short one computer replaces many white-collar workers with bachelor degrees, and cloud computing replaces many, many BAs and indeed begins to take over services from the in-house IT manager.

As the professor from Princeton puts it: computerized legal research and computer-aided medical diagnosis are already here,  robot janitors are a long way off. Or it's the intellectual service industries that are "offshoreable"  rather than jobs done by low-paid, less-educated workers.

So think on this: "[T]he notion that putting more kids through college [university] can restore the middle-class society we used to have is wishful thinking. It’s no longer true that having a college degree guarantees that you’ll get a good job, and it’s becoming less true with each passing decade...  just by giving workers college degrees, which may be no more than tickets to jobs that don’t exist or don’t pay middle-class wages [is not the answer]."

And professor Krugman's answer is to motivate US society to undertake a more equitable sharing of its wealth when it comes to remuneration for work performed.

That's the sort of radical proposal that in certain quarters could lead to a price being placed on the Princeton professor's head.