The Party Winds Down

Mengfei Chen

Mengfei Chen
Our Economy

The financial foundations of our nation are crumbling under the weight of mismanagement and the global fiscal crisis. California operated with no budget for nearly three months while essential programs and services withered. Unemployment continues to rise at its fastest rate in 16 years. A banking crisis will cost American taxpayers nearly as much as the Gross Domestic Product of Norway. The gap in income distribution between the rich and everyone else continues to widen and the United States crawls ever downward on that ladder of national status.
However, don’t worry because you’ll have that much-coveted college degree in a few months or years. That will ensure your access to the lifeboats of this economic shipwreck. That will allow you to get a good job with health insurance, a retirement plan and at least a little vacation each year. Yeah, thank goodness for that college degree, right? Not so fast. According to new data collected by the U.S. Census Bureau, workers in all educational groups, except those holding professional degrees (like doctors and lawyers), have actually gotten poorer between 2000 and 2007. That is everyone from high-school dropouts to Ph.D.s.
For a long time a college education has been insurance against a harsh economic environment, offering access to better jobs and a life squarely rooted in at least the middle class. This is still true to a large degree; college graduates are better off than their high-school diploma-only friends. But somewhere around the start of the Iraq war, the balloon that kept bachelor’s degree-holders full of fiscal helium started to leak, and the bar that separates “haves” from “have-nots” continues to move even higher. Perhaps the economy is just sinking so much that the bar seems higher.
Either way, the trend keeping college graduates in a privileged position is tapering, if not ending. Those holding bachelor’s degrees saw about a three percent decrease in their inflation-adjusted income in 2007 compared to 2000; the same goes for high-school graduates. Those holding master’s degrees dipped around 4 percent on average. During the same period, those with professional degrees saw their inflation-adjusted income (already nearly twice the average income of college graduates) rise around 3 percent, widening the gap between the rich and everyone else.
The slow death of American manufacturing signaled the end of a blue-collar middle class, but for a time the economy continued to provide well-paying jobs to college graduates and those holding advanced degrees. But now even that employment is under threat. The crumbling infrastructure of the United States – roads, bridges, levees, not to mention the lack of critical telecommunications infrastructure – is threatening to dissolve the desirability of American workers to companies that traverse the globe.
Furthermore, an eroding tax-base – exacerbated by the housing crisis and a fear of raising taxes – handicaps states’ abilities to undertake critical projects themselves. Health care costs are also a major hurdle for many people, taking more money out of their threadbare pockets. Retirement is more difficult to attain. Since 1977 there has been a 101 percent increase in people over 65 years old working; a 147 percent increase in women over 65 working; and a 172 percent increase in people over 75 working.
The only people doing better are the people who were doing well all along. Yes, the rich and the super-rich are having their best years, and with at least one presidential candidate calling to extend their tax-cuts, things should only get better.
Furthermore, now the federal government has decided to spend hundreds of billions of tax dollars to ensure the economy keeps working as it has been. College graduates will see little of this. While the federal government fights regulation and oversight, the prospect for much-needed intensive government investment in human capital and productive infrastructure has jumped to the realm of the implausible.
But do not despair. While that bachelor’s degree might not be what it used to be, you are still better off than most of the world. After all, thanks to your advanced education you will be in a unique position to understand the dynamics of the world economy as it crushes you into the earth, a luxury many do not have. Yes, the state of the U.S. economy is so precarious that the International Monetary Fund wants to conduct a “stability assessment,” something the world’s lone superpower is usually on the other side of; but hey, maybe they’ll hire some college graduates to implement the subsequent “structural adjustments.”

Brock Cutler is third-year history major. He can be reached at bcutler@uci.edu.