Economists regularly warned in the 1990s that the U.S. faced a shortage of educated workers. The fears were fed by official projections from the Education Dept. which seemed to show an impending decline in the number of new college graduates. For example, an Education Dept. report released in 1997 projected that the number of new bachelor's degrees granted each year would actually decline for the rest of the 1990s.
But the latest data and projections, released by the Education Dept. in late August, show that the number of new college graduates continued to increase in the second half of the 1990s. As a result, colleges and universities are churning out far more graduates than anticipated.
For example, the latest report estimates that 1.3 million bachelor's degrees will be granted in 2002. That's about 10% higher than what was forecast five years ago. Moreover, the number of new college graduates is now expected to climb for the foreseeable future.
The differential is even bigger at two-year schools, such as community colleges. According to the report, the number of recipients of associate degrees in 2002 is estimated to be about 14% higher than previously forecast.
That implies fears of a shortage of educated workers were overblown. On the downside, however, college grads may face more competition for jobs, especially if slow growth continues.
By Michael J. Mandel