Why Are So Many College Graduates Driving Taxis?

[Purveyor]

By Peter Orszag - Jun 25, 2013

It’s a parent’s nightmare: shelling out big money for college, then seeing the graduate unable to land a job that requires high-level skills. This situation may be growing more common, unfortunately, because the demand for cognitive skills associated with higher education, after rising sharply until 2000, has since been in decline.

So concludes new research by economists Paul Beaudry and David Green of the University of British Columbia and Benjamin Sand of York University in Toronto. This reversal in demand has caused high-skilled workers to accept lower-level jobs, pushing lower-skilled people even further down the occupational ladder or out of work altogether. If the researchers are right (which is not yet clear), the consequences are huge and troubling -- and not just for college grads and their parents.

Let’s start with some basic facts. There have always been some graduates who wind up in jobs that don’t require a college degree. But the share seems to be growing. In 1970, only 1 in 100 taxi drivers and chauffeurs in the U.S. had a college degree, according to an analysis of labor statistics by Ohio University’s Richard Vedder, Christopher Denhart and Jonathan Robe. Today, 15 of 100 do.

It’s hard to believe this is because the skill required to drive a taxi has risen substantially since 1970. If anything, GPS technology may have had the opposite effect. (Acquiring “the knowledge” of London streets, as taxi drivers there are required to do, is cognitively challenging, but it may no longer be necessary.)

Educated Firefighters

Similarly, in 1970, only about 2 percent of firefighters had a college degree, compared with more than 15 percent now, Vedder and his colleagues found. And, according to research by economists Paul Harrington and Andrew Sum of Northeastern University, about 1 in 4 bartenders has some sort of degree.

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http://www.bloomberg.com/news/2013-06-25/why-are-so-many-college-graduates-driving-taxis-.html

[WestStar]

1. How can you tell your cabbie was a philosophy major?

They ask "WHY do you want to go to the airport?"

[Igel]

2. A nice article that fills column inches but not brain cells.

The "earnings premium" is nice to mention and all that, but you really have to have more categories than just "college" and "no college" to do it justice.

Got JD? More $.

Got B.Eng.? Not bad. Not bad at all.

Got BA in French language and literature? Probably not much $.

Now cross that with colleges. Got JD from Rural Midwest University at Lesser Podunk (R-MULP)Less $ than JD from Harvard.

Got B. Eng. in nuclear engineering from R-MULP and want to compare with mech eng from MIT?

Or how about that R-MULP degree in French, featuring a week's study in Quebec and specialization in Moliere, versus that Berkeley BA that had you do your junior year at the Sorbonne entirely in French and where you also mastered simultaneous interpretation and EU business law?

Yeah. It's like comparing peaches and turnips. Esp. given the research that shows that the "cognitive skills" associated with college are scant for some schools and majors and extensive for other schools and majors.

[formercia]

3. There are more applicants to fill positions

Thus, employers have the luxury of being selective in who they hire. Increased competition for jobs, allows it to be a buyers' market, forcing wages down, even for those overqualified for the position. It's a win-win for employers and helping them achieve increased profits and higher Stock valuation.

[Thor_MN]

4. How many of 100 (insert high level job) jobs were held by H1b Visa holders in 1970?