Every economic crisis brings in its wake a wholesale reordering of society. The Great Recession of 2008, no matter how mild in comparison to past upheavals, has altered the world in ways unanticipated just a decade ago. That college graduates would get caught in this latest round of restructuring took almost everybody by surprise. The Federal Reserve Bank of New York reports that nearly half of recent college graduates, some 44%, now work in jobs for which a college education is not necessary.2 This is an extraordinary rate of failure. The absorption of fresh entrants into the workforce has always been a slow process, but the situation facing college graduates is unlike anything experienced previously. Rather than higher education serving as a conduit into the middle class, it has instead become fraught with uncertainty and debt. Substantial portions of the population are downwardly mobile. Welcome the new “precariat”—precarious and proletarianized.
This isn’t the first time that the modern economy has created a college-educated surplus. During the 1970s, a generation of college graduates also came up against a ceiling of un- and under-employment.3 Like today, it was a period of considerable economic turmoil and adjustment in the domestic and international arenas, and like today students were central to protest movements that spanned the globe, with a host of civil rights, anti-war, identity-oriented, and national liberation movements in the 1960s and 1970s and Occupy and the Arab Spring in recent years. What confounded our understanding of these developments in the earlier period was that many of the student protests took place within the university system; that is, before the students actually entered the job market. It was a college-educated cohort without a specifically economic nomenclature attached to it (like “precariat”); instead, the media affixed labels drawn from pop psychology to identify a “generation gap” that spawned a “youth rebellion.”
The production of college graduates, nonetheless, clashed with the ability of the system to absorb them. Richard Freeman, whose The Overeducated American describes this phenomenon in great detail, wrote that: “recipients of [. . .] degrees in most fields accepted salaries in the early 1970s at real rates of pay far below those of their predecessors—and often in jobs quite divorced from their field of study and well below their levels of aspiration.”4 In other words, what began in the 1960s as a rejection of American society because of its endemic traits regarding inequality and war, became during the following decade an inability to integrate into the job market because of altered economic conditions. Half a century later, we are now able to recognize a recurring pattern that was only dimly glimpsed at its onset: college graduates on their way down socially and economically.
The difference between then and today, however, is that, in the ’70s the college-educated population was not yet the object of economic restructuring. Not the casualization of labor and its transformation into part-time, semi-skilled employment, but the deindustrialization of the factory-employed proletariat was the ruling agenda. The rebels of the 1960s and 1970s were lucky. Despite the economic stagnation that characterized the decade following their emergence from the university system, college graduates eventually found jobs, even though large portions of the working class were losing theirs. Factory-placed robots and the movement of production facilities to low-wage regions of the world was the leitmotif of a lost profitability that machines were thought to restore. The computerization of skilled work is a recent occurrence.
Today, college attendees account for roughly 40% of all 18 – 24-year-olds nationwide.5 Assuming that the same 44% of them will not find suitable jobs, this amounts to nearly one-fifth (18%) of that entire cohort. They join the remaining 60% of the age cohort who do not attend college at all and who are in truly dire straits, faced with wages that have been stagnating, if not outright declining, ever since the 1970s. A major part of the problem is that many jobs are now part-time or temporary, with employees characterized as “freelancers” or “independent contractors.” Estimates vary widely—from 20 to 40% of all jobs nationwide—but in any of these scenarios, a huge number of people fall into this status.6 The situation for college graduates mirrors quite precisely the overall pattern within the United States, in which the population is split between a relatively well-off upper-middle and upper class of some 18 – 22%, with everyone else facing a dreary future. A vast working class is in the process of coalescing, with a surge of newcomers from the downwardly mobile college graduates as the latest entrants.
Just the opposite process took place in the decades after World War II, when a major segment of the working class gained entrance into the university system and thereby into the middle class as well. This was the heyday of the Keynesian era, when it was thought that government spending could be increased with few detrimental effects on the economy at large.7 Education benefited greatly from this largesse, especially public universities and colleges, which have continued to expand ever since. The decomposition of the working class by means of its partial absorption into the middle class constitutes one of capitalism’s greatest achievements. Education, specifically a college education, became a primary mechanism through which social classes were separated from one another. It’s what differentiated white-collar from blue-collar, and office work from factory and warehouse employment. To be middle class meant to be college educated. The actual working of the class system, of course, was much more complicated and nuanced than this,8 but nonetheless, class and education—in people’s minds and in many people’s experiences—became inextricably linked.
Most significant about this era was the near-complete jettisoning of a working-class identity by the working class itself, even those parts that remained ensconced in traditionally working-class occupations, neighborhoods, and incomes. This too was a development unanticipated by commentators, irrespective of their political orientations and allegiances. Daniel Bell’s The End of Ideology (1960) set the stage for discussions among academics and college students; for the working class, the conduit was newspaper journalists and television news anchors. It’s not that society became classless, but that either you were “middle class” or you were poor. Only a small percentage of the working class went through this transformation at first, but it was enough to prompt everyone else also to rethink their identity.9 “Working class” as a frame of reference largely disappeared from people’s vocabularies.
The post-World War II era was one of enormous material success. Of particular importance to college attendees was the simultaneous expansion of government and business. While the population of the United States expanded by one-third between 1950 and 1970, its college-bound population expanded by two and one-half times. Government employment doubled during that same period. Given the government’s new roles in stimulating and also regulating the economy, a huge bureaucracy was needed to keep track of its many undertakings. It’s what precipitated the reshuffling of social classes.
The business community was equally beset with profound transformations, especially its expansion internationally and the unfolding of new levels of commerce that focused on the distribution, marketing, and sale of goods that were produced in unprecedented quantities and varieties. These functions similarly required new bureaucracies to sit alongside and atop the underlying production facilities, which themselves had grown increasingly complex due to mechanization and an ever-expansive international division of labor. An entirely new administrative apparatus was needed to deal with the sudden growth of use-values. White-collar (office) positions increased by 75% even though the civilian labor force only increased by one-third.10 After three-quarters of a century of full-scale industrialization, from the late 1800s until the decades after World War II, the economy was ready to absorb parts of the working class into the middle class in order to facilitate these enlarged aspects of society.11 The needs of governing and business were reflected in the expansion of higher education.
The shedding of a working-class identity did not need much prompting. The proliferation of commodities was sufficient. For the first time in history, working-class consumption included a wide variety of non-perishable and durable goods such as kitchen appliances and automobiles, conveniences that until the post-World War II era had been mostly confined to the middle and upper classes. The variability of models, colors, and extra features, all of which were calibrated to distinct income levels, meant that consumption was stratified, when not altogether individualized. Clothing in particular had evolved along these lines for some decades already. All this represented a form of upward mobility, irrespective of actual wage levels. Whether someone was truly a member of the middle class seemed not to matter when it came to consumption and the individual choices it offered. Within the workworld, other processes downplayed the emphasis on social class as an identity marker. From the late 1800s on, the job world, both blue- and white-collar, had introduced minute differences in titles and pay scales as a means to keep employees in competition with one another while also providing them with a small measure of occupation and income flexibility.12
The business world was quick to note these altered orientations. Individualized consumption rather than one’s place in the productive apparatus (use-values vs. exchange value) became the focus. When, in addition, working-class parents raised their children to be middle class, the use of class as a marker of identification was muddled even further. In this case, “working class” became a status to be transcended rather than embraced. Working-class identity had never been stable, in any case. Stability presupposed a world that did not change significantly from generation to generation, whereas in capitalism, the transformation of social life occurs so rapidly that parents are often baffled by the cultural and material referents that their children hold dear.13 Within intimate relationships, class was not the overriding signifier, but simply one of many variables that were based on one’s parents and partners—their ethnicity, geographic backgrounds, occupations, home communities, and more. Identity was a negotiation, not a fixed entity. Individuals used hyphenated self-descriptions, and they often categorized themselves as working class in one context and middle class in another, depending on the nature of the conversation and the status of the person with whom they were conversing. Much of the working class thought of itself in dual class terms, as college graduates of working-class parents, or working-class parents of middle-class children. Only select groups within society continued to speak about the “working class.” The terminology took on an antiquarian tone, a nomenclature used principally by the overlapping categories within the American nomenklatura of intellectuals, academics, and leftists.
A half-century ago, the confusion over class helped open the population to new attitudes about diversity. As women and minorities joined the paid workforce in greater numbers, they prompted a major reassessment of accepted truths about the homogeneity of society. Positive or negative reactions hinged on how one viewed the future. In other words, cultural reorientation was a by-product of upward mobility. At the same time, the reorientation was perceived by some as a precipitating factor in downward mobility.
Already by the 1960s—a full decade before full-scale deindustrialization began in earnest—the groups that remained within the working class felt under siege. The most prominent groups received special attention from politicians, a well-financed and religiously oriented radical right, and the media at large. These included skilled craftsmen, who by virtue of their incomes and job security represented something of a “labor aristocracy.” Their jobs were maintained through high levels of exclusivity in terms of race and gender; in other words, these were predominantly white male professions in which the father-son traditions that had been so prevalent in the factory system were still maintained. Electricians, plumbers, carpenters, and small-scale contractors represented one strand, police officers and firefighters another. In the former, licenses, apprenticeships, and sponsors ensured exclusivity; in the latter, unionization proved an effective mechanism to guarantee similar results. These were among the first audiences to whom conservative talk radio appealed as a source of influence. This group could be deeply conservative on some issues while quite liberal on other ones—for instance, opposing social spending for the poor while still voting Democratic.
A second group within the working class consisted of the working poor, people who either had not recognized or were prevented from taking advantage of the educational system in terms of upward mobility. Often, they were the children of migrants from agricultural regions inside the United States or from abroad. Low-paid warehouse and service positions pushed them into the working-class precariat that has since expanded substantially and in fact is so destitute that the government regularly needs to intervene with supplementary benefits such as health insurance provided through the Affordable Care Act, Earned Income Tax Credits, and food stamps.14 This part of the working class remains bitterly divided racially and geographically. Urban minorities comprise one portion, the other resides in run-down rural and suburban communities, particularly in the south and center of the country. The latter group has also been a prime target for religious fundamentalists and right-wing politicians who preach a doctrine of self-reliance.
The traditional factory proletariat, to which hardly anyone pays attention these days, remained relatively steady in size from 1970 to 2000, supposedly the high-tide of deindustrialization. It’s true that the industrial workforce did not grow during these years, while both the population and the number of employees overall grew rapidly. Nonetheless, the number of employees involved in manufacturing was quite stable. “Deindustrialization,” as a description, thus tends to obscure as much as it explains. Only after the turn of the current century did an actual numerical decline in manufacturing employment set in. Until then, the same number of workers produced a vastly expanded number of goods.
Which goods they produced and where they produced them did change, however; the historical centers of industrialization in the Northeast and Midwest were to a great extent abandoned, while new production facilities were established in the southern and southwestern parts of the country. Electronics and plastic manufacturing replaced metal production. The appearance of industrial establishments also changed dramatically, from multi-storied brick buildings with ample windows to “big box”-type constructions of one or two stories with few windows except for upper-level corners that housed administrative offices. Warehouses, distribution centers, factories, and big box retail establishments such as Walmart and Target became indistinguishable when viewed from their exteriors. But the people inside were just as numerous as ever, some 20 million during the last few decades of the 20th century.15
To these various groups now come the college-educated precariat. These are middle-class aspirants with working-class lives. While major parts of the working class think of themselves as middle class, parts of the middle class are adjusting in reverse fashion. Some of this means rethinking the educational system. Student debt, rather than serving as a facilitator of future success, has instead become a barrier to upward mobility, a cautionary factor in an uncertain job market. Whereas a liberal-arts college education was once thought to be a guarantee of a middle-class existence, the focus increasingly is on graduate professional education and math-based professions like finance and information technology, and also the fields within marketing, anthropology, etc. that directly feed the math-based professions.
This generation of college students, like the precariat of the 1970s, is not afraid of blacks and latinos, given the diversity of the institutions which they just attended. They are thoroughly avant-garde and bring with them to the poor, urban neighborhoods where they find still-affordable rents a wide range of cultural, artistic, and intellectual interests that help enliven already lively neighborhoods. These two communities share similar sensibilities about injustice and politics. But the new precariat also attracts cafes, restaurants, and other small businesses, a signal that a neighborhood is vulnerable to gentrification. It is an untenable situation, and one which in all likelihood will not continue very long. The new precariat lives a working-class existence, buffered in some cases by parental support. Among the upper-middle and upper classes, an inter-generational family wage seems to be emerging, as parents invest in their children’s immediate well-being. Contra Thomas Piketty, income and wealth are increasingly used to cushion the downward mobility of the children.16 Student loans, still thought to be the responsibility of graduates, are slowly shifting back towards their parents.
Those who are not quite so fortunate join a highly distressed working class. According to the U.S. Census Bureau, one-third of the of population drops below the poverty line over a four-year period.17 This indicates a tremendous tumult throughout the bottom income levels of society. Deindustrialization and the dispersion of the industrial proletariat is ongoing. In the last fifteen years, manufacturing employment has shrunk by 25%, as deindustrialization has finally become a reality.18 Wages keep sinking because new positions are pegged at lower salaries than the ones they replace. This of course is implicit in the shift from manufacturing to services, from union to non-union, from primary employers to contractors and temp agencies. The part-time, underpaid service sector dominates expansionary efforts; that is, small businesses and chain-store retail establishments are among the few growth areas within the economy. The casual and part-time jobs that account for some 20 to 40% of all employment are especially prevalent in the restaurant, creative arts, and computer industries where the college-educated precariat tends to congregate. Budget cuts continue to haunt long-deteriorated public schools and services. Low-income neighborhoods—white, Latino, and black alike—have been plagued for decades by crime, substandard housing, lack of sufficient public transportation, HIV/AIDS, addiction, and incarceration. No low-wage family in the United States has been untouched by these crises. Marital instability and female-headed households define the working-class precariat, just as delayed childbirth and a return to the parental home define the lives of the college-educated precariat.
The situation for college graduates has been dim for some time already. For the past twenty-five years, e.g. for nearly two decades prior to the economic crisis of 2008, the rate of underemployment for all college graduates between the ages of 22 and 65 held steady at just under one-third.19 Since the Great Recession, an additional ten percent find themselves in these straights. This is higher education’s dirty little secret—a substantial portion of the graduating class is on its way down, just like the substantial portions of the graduating classes that preceded it.
- Thanks to Anne Lopes, Richard Seltzer, Barbara Foley, Susan Carruthers, Carolyne White, and Paul Mattick for comments and suggestions.
- Recent college graduates are defined as 22 – 27-year-olds. Jaison R. Abel, Richard Deitz, and Yaqin Su, “Are Recent College Graduates Finding Good Jobs?,” Current Issues in Economics and Finance, 20:1, 2014, summarized in “Starting Out Behind,” New York Times, editorial June 7, 2014,.
- The Great Depression of the 1930s produced a similar, albeit much smaller, college-educated precariat.
- Richard Freeman, The Overeducated American (New York: Academic Press, 1976), 4.
- U.S. Department of Education, Institute of Education Sciences, National Center for Education Statistics.
- Twenty percent equals 32 million employees. Economic Modeling Specialists Intl., as mentioned in Noam Scheiber, “Growth in the ‘Gig Economy’ Fuels Work Force Anxieties,” New York Times, 12 July 2015; David Weil, The Fissured Workplace (Cambridge MA: Harvard University Press, 2014), 272; U.S. Government Accountability Office, “Contingent Workforce: Size, Characteristics, Earnings, and Benefits,” 20 April 2015.
- See Paul Mattick, Marx & Keynes (Boston: Porter Sargent, 1969), especially chapters 9, 11-14.
- See Randall Collins, The Credential Society: An Historical Sociology of Education and Stratification (New York: Academic Press, 1979),186; Andrew Hacker, Money: Who Has How Much and Why (New York: Scribner, 1997), p.218; Lawrence Mishel, Josh Bivens, Elise Gould, Heidi Shierholz, The State of Working America, 12th Edition (Ithaca NY: Cornell University Press, 2012), Chapter 4.
- The success of the G.I. Bill, which provided stipends for veterans to attend college, was still fresh in everyones’ minds.
- Population increased from 151,684,000 to 204,879,000; college attendees from 2,281,000 to 7,920,000; government employees on the federal, state, and local levels from 6,026,000 to 12,535,000; white-collar workers from 21,253,000 to 37,857,000. Historical Statistics of the United States: Colonial Times to 1970, Part 1, Series A-6, H-700, D-139, D182-183.
- It took roughly this same period of time for the agricultural population of the United States to be absorbed into the working and middle classes, such that an agricultural population barely exists anymore.
- For a seminal piece, see Kathy Stone, “The Origin of Job Structures in the Steel Industry,” in Root & Branch: The Rise of the Workers Movements (Greenwich CT: Fawcett Crest, 1975), 123-158.
- E.P. Thompson’s The Making of the English Working Class (New York: Vintage, 1966) defines the working class in cultural terms, yet his subsequent work retreated further into the past, as if cultural definitions were not entirely convincing.
- This constitutes a direct subsidy to the business world, which is saved from paying a livable wage despite objections to the tax revenues that such programs necessitate.
- Statistical Abstracts of the United States, 1970: No. 329, 2010: No. 607.
- Thomas Piketty, Capital in the Twenty-First Century (Cambridge MA: Harvard University Press, 2014).
- See Mishel et.al., p.427; John Marsh, Class Dismissed: Why We Cannot Teach or Learn Our Way Out of Inequality (New York: Monthly Review Press, 2011), 28, 40.
- Statistical Abstracts of the United States, 2010: No. 607.
- This has been true since 1990. See Abel et.al; Neeta P. Fogg and Paul E. Harrington, “Rising Mal-Employment and the Great Recession: The Growing Disconnection between Recent College Graduates and the College Labor Market,” Continuing Higher Education Review, 75:2011, 57.
GARY ROTH is a former Vice Chancellor and Dean at Rutgers University-Newark, where he now teaches.