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AS THIS was written in early April, the February employment report had just come out. Twice as many jobs were actually created in February as had been predicted, and so, once again, Wall Street trembles. Many investors are worried that the economy is cranking up more than it should and that inflation is just around the corner. To cooler economic heads, this fear seems misguided, because most of the jobs created are in low-paying service occupations, and it is rising wages rather than mere number of new jobs that create inflation.
At about the same time, Louis Gerstner, Jr., the CEO of IBM, was fulminating at the March 27 "education summit" of governors and CEOs that the education system is broken and that we need higher standards to fix it. (This is the same Louis Gerstner, Jr., who, shortly after the World Economic Forum had declared the U.S. economy to be the most competitive in the world, stated that, if our schools didn't shape up fast, we'd soon be a Third World economy.) According to Nelson Smith, a spokesperson for the National Alliance of Business, standards have "revolutionized" the world of business in recent years, and the schools need to follow suit.
Against the backdrop of these pronouncements stand data from the Bureau of Labor Statistics (BLS) showing that, in the decade from 1983 to 1993, most of the jobs created were low-paying jobs in the service sector. According to the most recent BLS projections, that isn't going to change much between now and 2005.
In looking at these figures, one must constantly keep in mind the difference between rate and number. Jobs requiring college degrees will grow at a faster rate than those requiring only a high school diploma, but such jobs are much smaller in number. The current...