Why is it that 30 years ago you could be a factory worker and earn a middle-class income while now many university graduates are making minimum wage?
I have spent a ridiculous amount of time thinking about this exact question. I have an answer: the labor market was weird for about 3o years.
30 years ago--actually further back than that, 50 years ago is a better timeline for your question--the US was an industrial powerhouse. Most of the world was ravished by World War 2 and any fighting since then. The US had built up industrial capacity to an unprecedented level. And there was cheap labor throughout the world, but we couldn't get to it. China was closed. Vietnam was closed. You couldn't trust India to not confiscate your property. There were also shipping problems. International trade was a lot more expensive and risky than it is today. Even if businessmen could get to the cheap labor they wouldn't have been able to cheaply get the stuff back the States or to Europe where the demand was.
The US had a decently educated blue-collar workforce and white-collar workers who could squeeze productivity out of the manufacturing process. Even today we have extremely efficient manufacturing practices compared to the rest of world.
We've decided to export the manufacture of cheap stuff to East Asia.
But we still manufacture stuff in the US. See this great article in The Atlantic: Making It in America. We don't manufacture widgets anymore, we manufacture the machines that manufacture the widgets. We send that over to the China and exploit those labor arbitrage opportunities. To work in a factory today requires some serious skills. You can't just go from high school to the factory. You go to a community college to learn physics, chemistry, calculus, programming, the whole intro-to-engineering curriculum. And those manufacturing jobs pay enough to compensate for the extra training.
Why are there so many struggling college graduates? Most have no marketable skills. College graduates are struggling at very different rates. English majors and anthropology majors and psychology majors and sociology majors can't get by. Engineering majors and statistics majors and computer science majors and finance majors are killing it.* They have skill sets that the market demands. Businesses don't need someone who markets themselves as a 'people-person' or an 'effective communicator.' They want to see hard skills. Those soft-skills will get you promoted. But without those hard skills you won't get a job.
In the 1970s college became accessible to a lot more people. That was a good thing. Employers needed people who had those soft skills and were perceived as trainable. College degrees signaled those things. An engineering degree was icing on the cake. And the weird thing was that skills were devalued. It didn't matter if you were a whole lot smarter than the guy who majored in poetry. Without that degree you didn't stand a chance. A bunch of kids to today grew up with parents and adults telling them that college is the key to success. To those adults it was. Why should they know any better? But what they didn't foresee was the slowdown in general hiring that was coming.
The crash of '08 meant that companies needed to get efficient fast or fail. They couldn't afford to bring on a whole bunch of generalists and train them. They needed people who could make them a profit as soon as they could. You saw this most clearly with law students. Most entered law school in 2006 when law firms couldn't hire enough people. They graduated in 2009 in the midst of a hiring freeze that didn't end. There was one exception: patent lawyers. You can't just go to law school and be a patent lawyer. You basically have to be an engineer or else the USPTO won't let you sit for the patent bar. There's a shortage of patent lawyers but a glut of attorneys. This has trickled down to entry level hiring.
Employers are demanding skill sets. If you have those skill sets your set. If you don't you're going to have a problem. And honestly, isn't that what we would expect?
*On the whole. There are always outliers, so I don't want to hear about someone's cousin who can't find a job with their two PhDs in awesomeness. They data says I'm right.
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