Educating Ourselves: A Major Choice

Around prom time each year, we hear how American students stack up against their international peers in science, technology, engineering, and mathematics (STEM).  America’s rankings should concern even the optimists.  But the contest is not over.  Our high school grads have a few more years to develop skills that will shape much of their working career.

April 2012’s slight improvement in unemployment rate ( 8.1% ) is overshadowed by an avalanche of Americans dropping out of the labor force.  The civilian labor force slumped by 342,000 between March and April.  The participation rate stands at 63.6%.   For those lacking a high school diploma, the participation rate is 45.2% compared with 76.2% for those holding a bachelor’s degree or better.   But it’s not just years in school – occupational choice matters a lot.  For occupations with roots in STEM, compensation is consistently high.

Those heading to college this fall, will have a post-college career of about 45 years, so they should choose a career path as rewarding and secure as possible.  None of us knows the international competition and technological changes that will buffet an occupation over a half-century.

Internationally, educational attainment in STEM is improving.   A labor force with good STEM skills and a government that invests in relevant high-tech industries can create a strong comparative advantage – leading to higher exports and incomes.  Conversely where skills and capital are insufficient, labor can be a commodity without pricing power – that’s not where our high school graduates want to compete.  College graduates in STEM majors and particularly those with advanced degrees face brighter prospects than others, but over a 45 year horizon, there are no guarantees even for such plumb occupations as architecture and medicine.

For example, pharmaceuticals have been successfully developed and manufactured offshore.  Medical services seldom come from an “offshore” provider to the U.S. domestic market.  Exceptions are medical tourism in Thailand, India, and Central America, and tele-radiology for reading nighttime X-rays and for U.S. locations with skill shortages.  By 2020, when electronic health records become the norm, medical diagnosis and treatment planning could be provided by offshore practices staffed by U.S. accredited physicians.  This would cut health care costs and depress the incomes of U.S. physicians.

In architecture, a split will likely develop between aesthetics on one hand and mechanical-engineering-cost control aspects on the other.  Augmented by a database of “looks,” aesthetics will remain the province of humans but the rest could be merely applications for a “Watson-like” computer under minimal human oversight.  Aesthetic and oversight roles will be far less labor intense than today’s architecture and we’ll need far fewer professionals.  Drafting as an occupation may be entirely eliminated by an architectural “Watson.”

As an engineering example, the telecommunications sector has been on a rollercoaster.  For more than a century, copper “twisted pair” was the main physical transport.  It was replaced by fiber optics, shielded coax, point-to-point microwave, and recently by radio spectrum.  The format in which voice and data are carried went through even more changes – with internet-style packets over spread spectrum being the dominant form for mobile communications.   An electrical engineer who joined a telco after graduating 45 years ago has needed frequent re-education.  U.S. demand for expertise in twisted-pair systems is approaching zero.   A viable skill-set today would include depth in many IT topics, most of which were undeveloped in 1967.

College-bound students are choosing a career path that they will live with for decades.  It is impossible to know how those careers will change, but it’s clear that STEM-based careers can start them out with a big advantage and that frequent educational tune-ups will be needed.

Alan Daley is a retired businessman who follows public policy from the consumer’s perspective.