On Monday, Federal Reserve Chairwoman Janet Yellen gave a class of new University of Baltimore graduates some good news – their newly minted degrees are more valuable than ever before. The bad news? Workers without college degrees are likely to struggle in the coming years.
Dr. Yellen told students at the commencement ceremony that globalization is skewing the future economy of the United States in favor of college-educated workers.
“Like technological change, globalization has reinforced the shift away from lower-skilled jobs that require less education to higher-skilled jobs that require college and advanced degrees,” she said, according to The Wall Street Journal. “The jobs that globalization creates in the United States, serving a global economy of billions of people, are more likely to be filled by those who, like you, have secured the advantage of higher education.”
In her speech, Yellen said that graduates were entering one of the strongest job markets that the United States has seen in a long time – at least for college grads.
Automation and globalization, two of the scapegoats that helped President-elect Donald Trump reach victory in the presidential election, are replacing low-skilled factory jobs, Yellen said. Yet despite the consequence that shift has for American workers, the future will be bright for those who can innovate at the highest level.
Students at the University of Baltimore, where Yellen spoke on Monday, know this better than many others who will receive undergraduate degrees this academic year. The average age of the university’s students is 27. Many students decide to attend the school after experiencing the modern job market without a college degree, and seek to return to school in order to better their prospects.
Just before Yellen spoke to graduates, the Federal Reserve released a survey conducted in December 2015 that found that young people are increasingly optimistic about the future. In 2015, 61 percent of young people surveyed reported feeling positively about their employment prospects, as opposed to 45 percent in 2013.
Yellen reminded students, however, that, in this modern economy, an education is crucial to helping young people remain optimistic about their job prospects.
“Success will continue to be tied to education, in part because a good education enhances one’s ability to adapt to a changing economy,” she said.
Annual earnings for college graduates were 70 percent higher than they were for non-graduates last year, Yellen told students. In 1980, CBS News reports, there was only a 20 percent difference.
There are challenges involved in earning a college degree, Yellen acknowledged. Many students have to work part time and attend school at the same time. Others must take out thousands in student loans. But economic forecasts say that it is worth it, she says.
“The good news is that the vast majority of student borrowers who complete their degrees find work that allows them to keep up with their payments and pay off their loans.”
“Economists are not certain about many things. But we are quite certain that a college diploma or an advanced degree is a key to economic success.”