3) Despite the headwinds of Obamacare and uncertainty of the future, the US economy will continue to grow. Unemployment will decline and the deficit will shrink due to a large part to capital gains tax receipts from a rising stock market. However, the gap between college-educated unemployment and non-college-educated unemployment will grow larger, refocusing the debate from income-inequality to the education gap in our society.
Well, in a NY Times article yesterday discussing the February unemployment number, I read this:
While salary gains have been muted across the work force, more educated workers continue to enjoy much better employment options than those with a high school degree or less. The unemployment rate for college graduates in January stood at just over 3 percent, compared to 6.5 percent for high school graduates and 9.6 percent for people who lack a high school diploma.
The problem for economic growth in general, and wage growth in particular, is that only one-third of the American work force — 50.4 million out of 155 million — have a college degree or more. By contrast, there are approximately 73 million workers who have a high school diploma or some college, and 11 million workers who did not finish high school.
With many less educated workers chasing a limited number of new jobs, employers have little reason to increase wages. “It’s just an extremely competitive environment for workers, where people have little negotiating power,” Mr. Harris said.
See, I told you so?
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