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. … 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.
He considers the drivers of the change in demand:
One possibility, as I’ve previously written, is that the effects of a globalizing workforce are creeping up the income scale. Many jobs that once required cognitive skill can be automated. Anything that can be digitized can be done either by computer or by workers abroad. While the “winner take all” phenomenon may still mean extremely high returns for workers at the very top, that may be relevant for a shrinking share of college graduates. Whatever the explanation, the Beaudry team argues that an excess of skilled workers has led them into the “routine” job market — such as sales and clerical jobs — reducing wages there and pushing less skilled workers into “manual” jobs in construction, farming and so on. …
The cold comfort I can offer is this: Going to college may still be worthwhile — if not to be sure of qualifying for skilled jobs, then at least to avoid the even worse prospects of those who don’t get a degree.
Yglesias distinguishes between a college education and skills that prove useful in the workforce:
[I]f there’s more and more automation, more and more job opportunities will end up having that quality where it’s not that you couldn’t be replaced by a machine (because soon everything will be in the category “can be replaced by a machine”) but because sometimes people just strongly prefer to interact with an authentic human being.
At that point your wage is going to be determined primarily by your customer service skills. Are you pleasant to deal with? When people think to themselves that they’d rather interact with a human being, they typically don’t have a grumpy and dyspeptic human being in mind—they’re thinking of a nice, cheerful, helpful human being. And obviously this is a real skill. We’ve all had really good customer service experiences in our lives and also had really bad ones. But I’m not sure this is a skill that’s well-acquired by getting a high SAT score and then hanging out with other people who had high SAT scores for four years while listening to lectures from very distinguished academic researchers.