Over the weekend I was reading up on May’s dismal job report. The Labor Department reported Friday that only 69,000 jobs were added. Then I thought about the recent influx of college graduates. That is when I learned about a more serious development in our country’s economy – The Diploma Divide.
The Brooking Institution reported that 32 percent of U.S. metropolitan areas have adult residents with a four-year college degree. Earlier this year, unemployment was 7.5 percent in cities where more than one in three adults were college educated; 10.5 percent for cities where one in six adults had a college degree. Their research also revealed that we are beginning to witness a new trend: “The Diploma Divide.”
In geographic areas where manufacturing prospered before the recession like Ohio’s Rust Belt, jobs that did not require a college degree were plentiful. Now that the Rust Belt’s job market has evaporated, those residents that attained a four-year degree since the recession need to follow the job market. Consequently they tend to migrate to geographic areas where other college graduates succeed. The Metropolitan areas that have benefited the most are San Francisco, Austin, New York City, Stamford, and Raleigh. These cities are experiencing growth sectors in technology, finance, as well on being the home to research universities.
How big has the Diploma Divide gotten? According to the Brooking Institution, the difference historically between the most educated (residents with four-year degrees) and least educated cities was 16 percentage points. Today the spread has doubled. What is the by-product of the Diploma Divide? College graduates have higher household incomes, lower divorce rates, fewer single parent households and longer life expectancies. In the words of a senior fellow at Brookings that raised the red flag, “knowledge breeds knowledge.” To me it sounds that this vicious cycle does not bode well for an overall, balanced economic recovery.
What are your thoughts?