By David Harrison
Federal Reserve Chairwoman Janet Yellen said a college degree has become increasingly important to help workers compete in a labor market affected by technological change and globalization, in a speech Monday in Baltimore.
"While globalization will likely continue and technology will continue to advance, we don't know how fast the economy will grow, what new technologies will be developed, or how quickly and consistently employment will expand," she told graduates of the University of Baltimore in prepared remarks. "What is considerably more certain, however, is that success will continue to be tied to education, in part because a good education enhances one's ability to adapt to a changing economy."
Ms. Yellen didn't discuss monetary policy in her remarks, which came less than a week after the Fed voted to raise short-term interest rates for the first time this year and penciled in three more interest rates in 2017. Instead, the Fed leader stuck to a theme she has been vocal about in recent weeks: the need to properly educate and prepare workers for the jobs of the future.
As lower-skilled jobs have either been lost to technology or outsourced to countries with cheaper labor costs, the value of a college degree has grown, she said.
President-elect Donald Trump has vowed to bring back some of the lower-skilled jobs that have been lost to other countries. While Ms. Yellen didn't address Mr. Trump's promises, she stressed the need to prepare workers for a world of increased global pressures.
"Like technological change, globalization has reinforced the shiftaway from lower-skilled jobs that require less education to higher-skilled jobs that require college and advanced degrees," she said. "The jobs that globalization creates in the United States, serving a global economy of billions of people, are more likely to be filled by those who, like you, have secured the advantage of higher education."
The Fed chief also pointed to improvements in the labor market that had pushed the unemployment rate down to 4.6%, "near what it was before the recession," she said.
At the same time, she said, wage growth is picking up "and weekly earnings for younger workers have made strong gains over the past couple of years."
Ms. Yellen spoke hours after the Fed released results of a survey conducted in December 2015 that found that young people were more optimistic about their job prospects. The survey found that 61% had a positive outlook about their employment prospects, up from 45% in 2013.
But there are still significant obstacles. Ms. Yellen pointed to an economy that is growing more slowly than in earlier expansions and a disappointing rate of productivity growth.
She also said she was concerned about how workers who don't attend college would fare in an increasingly interconnected world.
"It concerns me, as it should concern all of us, that many are falling behind," she said. "Improvements in elementary and secondary education can help prepare more people for college and the opportunities college makes available, but for those who do not attend college, we must find other ways to extend economic opportunity to everyone in America."
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(END) Dow Jones Newswires
December 19, 2016 13:44 ET (18:44 GMT)
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