Wage lag now hitting college-trained Degree seen failing to become higher-pay ticket.

May 14, 1992|By New York Times News Service

Two labor economists have reported that the pay of most college-educated people -- once thought to be exempt from the wage stagnation that has afflicted most Americans for more than 15 years -- has failed since 1989 to keep up with inflation.

The findings, published yesterday by the Economic Policy Institute, a Washington research organization that often supports Democratic candidates, suggest that the more the high-paying jobs vanish from the workplace, the less a bachelor of arts degree becomes a ticket to a rising income -- a conclusion that other economists said was probably accurate.

"Unless we create more jobs, the college-educated are going to crowd out the people below them," said Janet L. Norwood, a senior fellow at the Urban Institute and until recently the commissioner of the Labor Department's Bureau of Labor Statistics. "The college-educated can at least go down, but the people below them have nowhere to go."

The study, by Lawrence Mishel, research director at the Economic Policy Institute, and Jared Bernstein, an economist there, found that among the college-educated, average pay continued to rise at a faster pace than inflation in the last three years only for black women with bachelor of arts degrees and all men and women with at least two years of postgraduate study.

"Black women, educated and uneducated, are becoming the prime wage earners in black America," Mr. Mishel said.

But for most Americans, a marked slowdown in the national economy, starting in early 1989, has pulled down wages. This is true not only for high-school-educated factory and clerical workers, but also for the educated.

Indeed, the gap between high school and college graduates, which averaged $5.40 an hour in 1973, is now $5.97 an hour, with the college-educated employee averaging $16.69 an hour, after adjustment for inflation, and the high school-trained worker $10.72. That makes a college degree still an advantage, although a diminishing one, since the degree commanded $17.55 an hour in the late 1980s.

The Bush administration argues that recent wage problems are a result of the recession that is now giving way to a mild recovery. But most economists argue that if the recovery keeps the economy as weak as it was in 1989, before the recession set in, then the wages of the college-educated will continue to suffer.

"You need economic growth far stronger than it has been in recent years to reverse the trend . . . ," says Richard Freeman, a labor economist from Harvard.

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