Studer Community Institute

A degree – even in a STEM field – isn’t always enough

February 16, 2015
/ Rick Harper
/ economy

There is a fly in the STEM ointment. The wage differential between those with good degrees and those without degrees has never been larger than it is today, and it is getting bigger. This is because our economy is more knowledge-intensive every year and because routine tasks are getting automated out of existence. Both of these factors point towards higher returns to workers with technical and analytical skills. Overall, the fact that technology lets us get more goods and services today from an hour of labor is something to celebrate. It means that a given amount of population can produce, and thus consume, more stuff. This is what it means to be a wealthy economy. (We could argue about how that wealth gets distributed. My conclusion is that capitalism is great at creating wealth and indifferent about whether it flows to the 1 percent or to the 99 percent. But the wealth is there.) Gordon Moore, who founded the computer chip manufacturer Intel, observed five decades ago that computer chip performance tended to double every 18 months to two years.What Moore’s Law means in practice is that the price of computing falls steeply every year. Computers are getting cheaper relative to people. Every year it becomes easier to find a technology alternative to hiring that expensive human who needs a living wage and health insurance. Robot wages are falling, and this causes human wages to stagnate or fall. These changes show up in the labor market. The jobs that show the most shrinkage are those that compete directly with robots or other computerized processes. The jobs that show the most growth are the ones where people work as partners with technology. Economist David Langdon and others at the U.S. Department of Commerce found in 2011 that growth in science, technology, engineering or math (STEM) jobs was three times as fast over the preceding decade as growth in non-STEM jobs. STEM jobs paid better than non-STEM jobs and were projected to grow twice as fast as other jobs over the next decade. But the pace of job change is fast enough that it is hard for mere humans to keep up. Even possessing a degree in a STEM discipline isn’t going to be enough to guarantee success. Massachusetts Institute of Technology management professor Erik Brynjolfsson suggests as much. He noted in 2013 that the highly successful tech startups Apple, Amazon, Facebook and Google accounted for a trillion dollars in stock market valuation (that number has risen to $1.5 trillion today), which was about 6 percent of the value of all U.S. companies. At the same time they only employed only a little more than one-tenth of one percent of workers. Wealth creation, even in our desirable high tech sectors, doesn’t mean job creation. Further, Brynjolfsson points out that many of the products and services developed and sold by these high-value, low-employment firms embody technologies that then replace workers in the broader economy. He calls it a “double-barreled effect.” The takeaway is that we all need to be more tech savvy than before, and we need to stay current. The job market will favor highly skilled people who pursue lifelong learning, and it will punish those who don’t. There are good opportunities in non-STEM areas, particularly in running a successful business or pursuing a trade, and these opportunities might not require a university degree. Industry certifications reflect the skill needs of businesses, and they can provide a good pathway to stable, high-wage employment. Our modern economy can create the jobs that are needed, and it will always reward those who have scarce skills. Dr. Rick Harper serves as director of the Studer Institute, a Pensacola, Florida-based organization that seeks citizen-powered solutions to challenges the community faces. He also directs the University of West Florida’s Office of Economic Development and Engagement in Pensacola.

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A degree – even in a STEM field – isn’t always enough

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