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Economy Takes White-Collar Workers to the Cleaners

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In this economy, learning to pour concrete may be more useful than a college degree.

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In past American recessions, when the US still had a healthy manufacturing economy, blue-collar workers often suffered the worst unemployment. And though this time such blue-collar trades -- especially ones focused on housing construction -- have also suffered greater unemployment than the national average, our current recession may represent a paradigm shift: "Creative" types have also been hit hard by the crisis.

This raises the issue of the value we place on college, and on both white- and blue-collar professions in the Information Age, which has seen 2 bubbles and crashes.

The months since the collapse of Lehman Brothers have been disastrous for professionals, except those in the fields of health care and education. From August to April, there was an overall drop in employment of 4.3%. More significant, however, were the steep declines in highly skilled occupations: 9.3% in computer and math jobs, 10.3% in engineering and architecture occupations, and a whopping 11.5% in arts, design, entertainment, sports, and media occupations.

It's likely that many of these jobs will not return. Newspapers -- from the New York Times and USA Today down to small-town rags -- have made job cuts that are likely to be permanent; television networks are eliminating news divisions; architecture firms in major cities have lost their bread-and-butter corporate clients. The picture is equally grim for the financial industry, since so much of the employment growth in financial services over the past 20 years appears superfluous in hindsight.

Call it the New Risk: Saddled with excessive college debt, young professionals are looking into the abyss. Those just starting their careers, along with new college graduates, will do so without the prospect of the high-paying financial and consulting jobs that paid 6 figures and were relatively easy to come by when I graduated from Brown in 2005. I knew people who majored in art history and philosophy and went to work for Goldman Sachs (GS), JPMorgan (JPM), Morgan Stanley (MS) and other investment banks. It was bewildering. Their lack of knowledge and genuine interest in finance didn't stop them from getting big salaries and bonuses.

To make matters worse, the cost of college has risen at twice the rate of inflation over the last 2 decades. Students borrowed $19 billion in private loans last year, from a bewildering array of sometimes usurious lenders. About two-thirds of new college graduates, or an estimated 1.8 million, have taken on student loans to pay ever-rising tuition and room and board costs. The average cumulative college debt among this group is about $22,500, according to FinAid.org, a website that specializes in financial aid.
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