By: Binyamin Appelbaum
Via: The New York Times

Personal income for residents of Arizona, Florida and Nevada grew much faster than the national average during the housing boom. Since the peak of the boom in 2006, however, incomes in those states are lagging behind the national average.

The pattern continued in 2011, according to the latest data on personal incomes released last week by the Commerce Department. It forms part of the growing body of evidence, which I described in an article on Tuesday, that the recession may mark an enduring shift in the geography of American growth. Regions where borrowed money fueled booms are now struggling under the weight of those debts.

The map below compares the growth of per capita incomes by state over two consecutive five-year periods, from 2001-6 and from 2006-11.

Source: Commerce Department

In the seven states shown in pink – Arizona, California, Florida, Idaho, Nevada, Utah and Wyoming – income growth outpaced the national average during the housing boom, but has lagged behind the average since the crash.

They join the states marked in red, where personal income growth has lagged behind the national average throughout the last decade.

The states marked in light blue, by contrast, outpaced the national average over the last five years after lagging during the earlier period. They join the dark blue states, which have maintained above-average income growth.

By: James R. Hagerty And Alistair Macdonald
Via: The Wall Street Journal

MUNCIE, Ind.—Jerry D. Bumpus Sr. was a member of the United Auto Workers union for four decades and earned as much as $28 an hour at a General Motors Co. car-parts plant before accepting a bonus to retire at age 60 five years ago.

On a recent Saturday morning, Mr. Bumpus, wearing a black jacket and clutching his résumé, was one of several thousand people lining up to apply for jobs at a new Caterpillar Inc. plant that makes train locomotives here. Those jobs start at as low as $12 an hour plus benefits, and there is no union representing the workers.

“I’m able to adapt to that,” says Mr. Bumpus, who hopes he can get the job to build up his scant retirement savings.

Things have changed in Muncie, a city of 70,000 where closures of auto-industry plants and other factories have left about one in five homes vacant. Jobless workers here and in many parts of the Rust Belt have lowered their expectations and become more flexible. At the same time, state politicians are fighting harder than ever to attract employers with lower taxes, streamlined regulation and other incentives. Companies like Caterpillar are eagerly exploiting both trends.

The politicians and workers are realizing that the battle for scarce jobs isn’t just with Asia and the Sunbelt states. It also is with neighboring states and Canadian provinces in the North American industrial heartland.

“Our challenge as a state is to stand apart from our Midwestern colleagues,” says Dan Hasler, Indiana’s commerce secretary, adding: “Our goal in Indiana is really pretty simple: It is to help companies improve profitability.”

That happens to correspond with Caterpillar’s agenda. The Peoria, Ill.-based maker of heavy equipment is adding jobs at the new plant in Muncie even as it closes an older locomotive factory in London, Ontario. At that Ontario plant, unionized workers earned about twice as much as the company pays in Muncie.

When Caterpillar announced the closure of that Ontario plant in early February, the Canadian workers were enraged. “I’ve been here 25 years and they wanted to offer us a bowl of rice to work, like we were workers in Asia,” says Rafeek Khan, a 55-year-old machinist at the plant. Other workers planted burial-style crosses, bearing their names, in the soil outside the chain-link fence Caterpillar had erected to keep them out. Caterpillar said wages at the plant were too high, making the plant uncompetitive.

The contrasting experiences of workers in Muncie and London show how the 2008-2009 recession and the painfully slow recovery of the job market since then have left North American workers with less bargaining power. The median weekly earnings of U.S. wage and salary workers, adjusted for inflation, were down 1.8% in last year’s fourth quarter from a year earlier and have been about flat over the past decade, according to the Bureau of Labor Statistics. Employers rarely cut wages, even during recessions, preventing any sudden plunge in median pay. But many new hires are willing to work for lower pay when jobs are scarce, and that is keeping a lid on wage costs.

Companies are concentrating many of their manufacturing investments in states where unions are weak and wages relatively low. Boeing Co., for instance, last year opened a nonunion airplane plant in South Carolina, supplementing its unionized factories in the Seattle area. Starting pay for assembly workers at the South Carolina plant is $14.35 per hour, compared with $15 in Seattle. But the union employees in Washington state tend to be much more experienced and average about $28 per hour. A Boeing spokesman cited regional differences in labor markets.

Where companies are expanding or modernizing unionized plants, they are winning concessions. Harley-Davidson Inc. in recent years told unions in York, Pa., Kansas City, Mo., and near Milwaukee that it would move production elsewhere unless they accepted more-flexible working arrangements, including greater use of temporary workers. The unions complied.

Tony Wilson, president of the International Association of Machinists union local in Kansas City, said workers felt little choice other than to accept Harley’s conditions. A Harley spokeswoman said the conditions were part of a transformation needed to make the motorcycle maker more competitive.

Over the past two decades, Caterpillar has been at the vanguard of corporate efforts to rein in unions. The company deployed white-collar staffers and temporary workers to operate plants during a 17-month UAW strike at eight plants in 1994 and 1995. The union eventually capitulated, making concessions in such areas as health-care benefits.

The equipment maker has gradually reduced its reliance on organized labor by opening plants in the South, where union support is scarce. At the end of 2011, about 27% of Caterpillar’s U.S. workers were represented by unions, down from 32% in 2003. As it opens new plants, Caterpillar makes no secret of its strategy. An online job advertisement posted by the company last year sought human-resources managers in Muncie experienced in “providing union-free culture and union avoidance.”

Companies like Caterpillar also are shopping for lower taxes and regulatory costs. That is where the politicians come in. All of the Rust Belt states are pursuing pro-business agendas and wooing manufacturers and other employers. But Indiana has been particularly aggressive.

Republican Gov. Mitchell Daniels, who was first elected governor in 2004, has cut costs by shrinking the state work force. That allowed the legislature last year to pass a bill that will cut Indiana’s corporate income-tax rate in stages to 6.5% in 2015 from 8.5%.

By contrast, Illinois, struggling to control pension and other costs, raised personal and corporate taxes last year—drawing a public rebuke from Caterpillar. In early February, Caterpillar sent an email to officials in Peoria County, Ill., where the company has its headquarters, telling them it had decided not to build a new construction-equipment plant there, partly because of what the company called “concerns about the business climate and overall fiscal health” of Illinois.

Caterpillar since has announced that the $200 million plant will be built near Athens, Ga. That was partly because Caterpillar wanted proximity to an Atlantic port. Even so, Illinois Republicans say Caterpillar’s decision not to consider their state for the plant shows the need for stronger efforts to reduce taxes and other costs of doing business there. “We are competing with states around us, and they are very aggressive,” State Rep. Don Moffitt, a Republican, told reporters. Illinois Gov. Pat Quinn, a Democrat, counters that he has made the state more attractive to employers, such as by enacting changes in the unemployment-insurance system. Those reforms are designed to save companies $400 million over the next seven years.


In early February, Indiana enacted right-to-work legislation that bars contracts requiring all workers to pay union fees and makes it harder for unions to organize work places. Indiana became the 23rd state with such a law, and the first in the industrial Midwest. “This announces, especially in the Rust Belt, that we are open for business here,” Republican House Speaker Brian Bosma said.

Indiana already is less unionized than its neighbors. The percentage of Indiana workers represented by unions last year was about 13%, compared with 15% in Ohio, 17% in Illinois and 18% in Michigan. The national average was about 13%. In Muncie, the UAW was a major political force in the 1960s and 1970s, representing more than 7,000 manufacturing workers in the city. For years, the union even owned and operated a public park in Muncie. Today, the UAW is barely visible there. It doesn’t represent any manufacturing workers in Muncie, though it still has a tiny branch representing deputy sheriffs.

The results of Indiana’s efforts to attract manufacturing jobs are encouraging so far. The number of Indianans employed in manufacturing at the end of 2011 was up 7.6% from two years before to 472,500, compared with a 3% rise nationally, after plunging during the recession. Over the past decade, Indiana’s performance has been better than other Rust Belt states. Its manufacturing employment is down 20%, compared with drops of 26% in Illinois, 29% in Ohio and 35% in Michigan, according to data from Moody’s Analytics.

Like many other small Midwestern cities, Muncie has suffered from an exodus of manufacturing jobs. Bitterness lingers from a 1989 strike in Muncie over cuts in health benefits at BorgWarner Inc., a maker of car transmissions. BorgWarner used managers to continue production at the plant while 2,100 workers tried to block the entrances and in some cases threw nails on the road. After seven weeks, the two sides settled the strike and agreed on a plan to reduce health-care costs. BorgWarner closed the plant in 2009 after an unsuccessful attempt to get more worker concessions.
In the past few years, Muncie has lured some new manufacturers, including Brevini U.S.A. Inc., a maker of parts for windmills. When Caterpillar announced in October 2010 that it would build locomotives in a vacant Muncie factory once owned by Westinghouse Electric Corp., the town was jubilant. Local officials put together a $28 million package of tax breaks, training grants and other incentives.

Production of locomotives began last year on a small scale, and the company is gearing up for higher output. The closure of the 62-year-old Ontario plant, Caterpillar’s main North American location for assembling locomotives, promises to bring more work to Muncie and another new plant in Brazil.

Caterpillar is seeking to hire more workers for the Muncie plant, mostly at wages of $12 to $14.50 an hour, compared with the equivalent of more than $30 an hour for most workers at the plant being closed in Ontario.

The lower wages in Muncie are fine with John Velasquez, 47, who joined CAT as a material handler in July and is now training as a welder. “I’m glad to have a job,” says Mr. Velasquez, who lost his job in housing construction during the recession.

Dustin Pittsford, 24, was among the thousands who lined up at Caterpillar’s recent job fair for potential employees. Mr. Pittsford says he currently is raising two children by working at a tire store for $8.25 per hour. The Caterpillar wages would be “a step up for me,” he says.

Muncie’s mayor, Dennis Tyler, has mixed feelings. He was a union member throughout his career as a firefighter here. And his father was a UAW member when he worked at the BorgWarner plant. “Driving down wages doesn’t do anybody any good,” the mayor says.

Even so, his top priority is jobs. Whether those jobs are unionized or not, he says, they are welcome.

London, Ontario, whose population is 366,000, also has suffered from losses of automotive-related jobs and is eager to keep as much manufacturing employment as possible. Worry began to mount last spring when Caterpillar proposed to cut wages at the London plant by about 50%. The union refused that offer, and at the end of 2011 Caterpillar said it would lock out the workers until they agreed to a new contract. The workers set up a camp outside the factory gates, burning scrap wood in old oil drums, and picketed around the clock.

During the lockout, London Mayor Joe Fontana says, he called senior Caterpillar executives frequently to ask what the government could do to help keep the jobs in London. “I’d ask, ‘Do you want new equipment, new research grants?’” he says. Caterpillar’s answer, the mayor says, was that the first step was to sort out the wage dispute.

Early on Feb. 3, Mr. Fontana took a call from a Caterpillar manager and learned that the plant was closing. “I said, ‘I can’t believe you have closed the plant when we were still talking about ways to get you back,’” the mayor says. A Caterpillar spokesman declined to comment.

Now Canadian officials at provincial and federal levels are thinking about how to make the region more competitive. They note that Canadian corporate taxes are lower than those in the U.S. One big problem, though, is that a stronger Canadian dollar has made the nation’s exports less competitive.

Finding new ways to attract employers “is something that we are very diligently engaged with,” says Brad Duguid, Ontario’s minister of economic development and innovation. “One of our challenges will be competing with low-paid jurisdictions around the world.” By some measures, that now includes Indiana.

via Morning Edition, NPR

As the Mayor’s Conference takes place in Washington D.C., city governments are dealing with severe problems at home — from high unemployment to funding cuts. Steve Inskeep talks to Mick Cornett, the Mayor of Oklahoma City, about how his city has managed to avoid some of these problems.

via NPR Planet Money


In his latest New York Times Magazine column, Adam Davidson writes, “mobility has reached its lowest level in recorded history…This suggests, among other things, that people aren’t packing up for new economic opportunities the way they used to.”

To continue the discussion, we asked two demographic experts on different sides of the debate – Joseph P. Ferrie of Northwestern University and William H. Frey of the Brookings Institution – to answer the following question:

Have Americans lost the economic incentive to move?

William Frey’s response:

In a recent campaign stump speech, Presidential candidate Mitt Romney testified, “I believe in freedom. I believe in liberty. I believe in an opportunity society.” I was waiting for him to next say, “and I believe in the right for Americans to move any place, anytime to achieve their goals.” He didn’t say that, but high migration levels surely have done much to keep our economic engine humming – compared with the more stagnant levels in Europe and Japan.

Of course, migration, both short distance and long, hit historic low points in the last four years (I summarized the trends here and here).

Does this mean that we are on our way to economic stagnation, which will keep large numbers of our work force perpetually stuck in place? I don’t think so.

Migration rates have certainly declined since the 1950′s, when we had a younger (and thus more mobile) population, and renters were buying GI-Bill financed homes. Since then, the population has became older, more settled into owned homes, and dual earner couples proliferated. The nation’s shifting demography made us a little more sedentary. But this does not mean that opportunities became less available to young people or that they were less likely to migrate to take them.

As late as 2005, a healthy 29 percent of twenty-somethings changed residences annually. Migration driven population booms occurred in dozens of Sunbelt metropolitan areas, attracting workers of all skill levels.

What happened next was the triple tsunami of a bursting housing market bubble, a financial crisis, and the Great Recession. Potential movers, especially young people, were unable to finance a new home, sell their old one, or obtain a job. Many young adults are stuck in place, living with their parents, putting off marriage, and remaining underemployed.

We are certainly in an economic mess, which may keep part of a generation from moving on with their lives. But when the economy does pick up, there will be a pent-up demand for migration among these young people and the next generation. It’s in our national DNA. And it won’t necessarily follow an education-based mover stayer divide. Hispanics and Asians of all skill levels will contribute mightily to our labor force, as they disperse around the country.

Still, it’s probably true that Mitt Romney’s unfettered capitalism will need some assistance from the government toward training this next generation for the jobs they move to take.

Have Americans lost the economic incentive to move?

Joseph Ferrie’s response:

In the 1830s, the extraordinary mobility of the U.S. population was noted by Alexis De Tocqueville: “[M]illions of men are marching at once toward the same horizon…Fortune has been promised to them somewhere in the west, and to the west they go to find it.” How did we get from there – a nation perpetually in motion – to here – a nation seemingly stuck in place?

The population’s movement peaked in the late nineteenth century. Why? The simple answer is the movement of the western frontier. It left in its wake nascent urban centers, sites that could process and ship farm products to the east and import manufactured goods back to the west. These communities ranged from small towns to great cities that sprang up almost overnight. Chicago is the most dramatic example: its population grew from 4,500 in 1840 to more than 500,000 in 1880. Population growth this rapid provided enormous opportunities for potential migrants. They easily obtained jobs in factories, warehouses, and city offices. At the same time, the U.S. was a place with substantial differences across regions in the products and industries, providing migrants a range of choices in destinations that modern movers no longer see before them.

One lesson that can be drawn from this look backward at past U.S. migration is that geographic mobility and economic mobility were closely linked for much of the nation’s history. The US had exceptionally high rates of economic mobility in the nineteenth century, compared to older European countries. The second is that going forward, geographic mobility will be less closely linked to economic mobility. The U.S. has become more economically homogenous. Americans now experience, if anything, somewhat less income mobility across generations than many Europeans.

This is unfortunate in at least one respect: it makes the route to economic mobility today considerably less forgiving than it was in the past. In the nineteenth century, an ambitious son or daughter could see their income rise simply through the act of changing location, an investment that could be made until well into their adult years. Today, by contrast, education is the route to advancement, but educational investments are already largely determined by the time individuals have reached their early twenties. Economic mobility and the “American Dream” of a better tomorrow are, if not dead, at least a great deal more elusive than they were in the past, when a train ticket to Chicago was virtually all it took to make a big step up the economic ladder.

By Ben Casselman
via online.wsj.com

The U.S. job market is showing signs of a sustained recovery. But the country’s prolonged struggle with unemployment will leave scars that are likely to remain for years, if not generations.

The latest labor-market snapshot, out Friday, gave cause for continued, if tepid, optimism. U.S. employers added 200,000 jobs in December, and the unemployment rate ticked down to 8.5%, its lowest level since early 2009.

But economists gathered here for the American Economic Association’s annual convention took a longer and generally dimmer view. Even if recent progress continues, the recession already has had a lasting effect on a generation of workers. Worse, the crisis has laid bare problems in the U.S. labor market that won’t quickly recover when the economy eventually rebounds. And the longer that unemployment remains high, the greater the risk that it will create structural problems that will endure.

The economists here, mostly academics, are studying the causes and effects of the jobs crisis from different angles, and they frequently disagree. Nonetheless, a few common themes emerge.

Long-term unemployment may be a bigger problem than high unemployment. Americans have been understandably frustrated by the slow pace of job growth. But economists say much of that slowness is explained by the weak economic growth since the recession ended more than two years ago. In that sense, the problem isn’t the “jobless recovery” but rather that the recovery itself has been so weak. If the recovery gains steam—as some economists believe has been happening in recent months—the growth in jobs should pick up as well.

Unprecedented rates of long-term unemployment could threaten the economy’s recent gains. Some 5.6 million Americans have been out of work at least six months, 3.9 million of them for a year or more. Research shows that the longer people are unemployed, the less likely they are to find jobs. Economists aren’t sure why—to what degree it’s because workers’ skills deteriorate, or because they find ways to cope and give up looking for work, or whether the stigma of being unemployed for so long makes companies unlikely to hire them—but the effect is the same: Many of the people out of work the longest likely will never work again.

The risk, economists say, is that the U.S. will develop an underclass of semipermanently unemployed workers, with severe consequences for productivity, public finances and even social stability. Europe, which faced a similar problem in the 1980s, is still dealing with the consequences.

“We know that once you get into that type of situation it’s very hard to get out,” said Steven Davis, a professor at the University of Chicago’s Booth School of Business.

Many problems predated the recession. The recession caused a dramatic rise in unemployment, but it also revealed deeper challenges that had been brewing for decades. By a wide range of measures, the U.S. labor market has over the past two decades lost much of the edge it enjoyed over other developed countries. The big gains in education in the early 20th century have slowed. Americans are moving less frequently and changing jobs less often, making the job market less flexible. And most critically, a smaller share of Americans are working. The labor force participation rate—the percentage of adults who are working or looking for work—peaked in 2000 and has been falling for more than a decade.


Economists don’t agree on what is behind the shift, although the aging of the baby-boom generation is almost certainly part of the answer. But whatever the reason, the effect is a labor market that recovers less quickly when it runs into trouble, a trend that was evident in the slow pace of hiring after the recessions of the early 1990s and 2000s. The recent recession exacerbated the trends, but it didn’t create them, said Harvard economist Lawrence Katz.

“Even if we had never had the Great Recession/lesser depression and the world had stayed the way it was in early 2007, we were already in a pretty sluggish labor market,” Mr. Katz said.

The recovery is only the beginning. Increased hiring and a falling unemployment rate are good signs, economists say. But even if the unemployment rate were to return to a healthy level by the end of the year—an outcome almost no experts predict—the labor market would still be far from healed. The length and depth of the crisis, unprecedented since the Great Depression, will have a lasting effect on both individuals and the economy as a whole.

For individuals, a growing body of research points to long-term effects of unemployment, especially during recessions. A recent paper by Mr. Davis and Till von Wachter, a Columbia University economist, found that workers who lose their job when unemployment is low—below 6%—lose on average 1.4 years’ worth of earnings, a substantial blow. But those who lose their jobs when unemployment is above 8% lose twice as much, 2.8 years’ worth of their pre-job-loss wages, which the authors call “staggering.”

Mr. von Wachter and colleagues also found that unemployed workers’ earnings fall 1% for each additional month they are out of work, and that those losses can last for years even after they find another job. Other researchers have found that unemployment can take a toll on family relationships, mental and physical health, and even the economic prospects of jobless workers’ children.

“There are people who are going to bear scars for the rest of their careers,” said Henry Farber, an economist at Princeton University.

For the broader economy, the stakes may be even higher. The long-term decline in manufacturing has eroded a major source of stable jobs that pay well. The construction boom of the mid-2000s helped offset those losses, until the housing market collapsed and took home builders with it. And the slow recovery has put a premium on productivity, giving companies incentives to invest in technology that lets them produce more with fewer workers—a trend that has spread from manufacturing into the service sector.

Much of the recent job growth, meanwhile, has come in the health-care and hospitality sectors, which generally employ many low-skilled workers at low wages. Those jobs help shrink the unemployment rolls, but they don’t replace the middle-class jobs that have been lost in the manufacturing and construction sectors.

“A huge issue is going to be the quality of jobs and whether we’ll have a type that generates a shared prosperity,” Mr. Katz said.

The challenge facing the country, then, is not just putting people back to work, but helping to retrain and rehabilitate the long-term unemployed, reversing a multidecade stagnation in the labor market, and finding a new source of jobs to rebuild the middle class. No one in Chicago had any easy solutions.

By Catherine Rampell
via nytimes.com

Workers are dropping out of the labor force in droves, and they are mostly women. In fact, many are young women. But they are not dropping out forever; instead, these young women seem to be postponing their working lives to get more education. There are now — for the first time in three decades — more young women in school than in the work force.

“I was working part-time at Starbucks for a year and a half,” said Laura Baker, 24, who started a master’s program in strategic communications this fall at the University of Denver. “I wasn’t willing to just stay there. I had to do something.”

Many economists initially thought that the shrinking labor force — which drove down November’s unemployment rate — was caused primarily by discouraged older workers giving up on the job market. Instead, many of the workers on the sidelines are young people upgrading their skills, which could portend something like the postwar economic boom, when millions of World War II veterans went to college through the G.I. Bill instead of immediately entering, and overwhelming, the job market.

Now, as was the case then, one sex is the primary beneficiary. Though young women in their late teens and early 20’s view today’s economic lull as an opportunity to upgrade their skills, their male counterparts are more likely to take whatever job they can find. The longer-term consequences, economists say, are that the next generation of women may have a significant advantage over their male counterparts, whose career options are already becoming constrained.

For now at least, many young women still feel that the deck is stacked against them.

“Almost everyone in my program is female,” said Ms. Baker, who hopes a master’s degree will help her get a job running communications at a nonprofit group. “That’s partly because of the program, but also because as women we feel like we have to be more educated to be able to compete in really any field.”

Women still earn significantly less than men. And in the two and a half years since the recovery officially began, men age 16 to 24 have gained 178,000 jobs, while their female counterparts have lost 255,000 positions, according to the Labor Department.

Apparently discouraged by scant openings, 412,000 young women have dropped out of the labor force entirely in the last two and a half years, meaning they are not looking for work.

Among young men, the labor force fell during the recession but has been flat since the recovery began. Today, across all age groups, an unemployed female worker is 35 percent more likely to drop out of the labor force in the next month than an unemployed male worker.

Some studies suggest that women are pickier about their job choices than men. Already earning lower pay, women are less willing to work when wages fall further, especially if they are able to rely on an employed (and these days, often newly re-employed) husband. Women are also more reluctant to work night or weekend shifts, according to government data on how Americans spend their time, partly because they have more family responsibilities.

“The jobs out there just aren’t very good, and men seem more willing to take them for whatever reason,” said Jonathan L. Willis, an economist at the Federal Reserve Bank of Kansas City. “The women are looking at those same jobs and saying, ‘I’ll be more productive elsewhere.’ ”

Then there are societal influences that affect a person’s willingness to take a lesser job or return to school.

“There is still this heavy cultural message that men should be out there earning money and supporting themselves, and they feel more distressed by losing their breadwinner role,” said Stephanie Coontz, director of research at the Council on Contemporary Families. “We’ve made much more progress overcoming the ‘feminine mystique’ than this masculine mystique.”

While these roles evolve, community colleges are reporting record enrollment.

Both men and women are going back to school, but the growth in enrollment is significantly larger for women (who dominated college campuses even before the financial crisis). In the last two years, the number of women ages 18 to 24 in school rose by 130,000, compared with a gain of 53,000 for young men.

The education gap aside, in some ways young women will already have an advantage over men in the coming decade. Many of the occupations expected to have the most growth, like home health aides and dental hygienists, have traditionally been filled by women. That is not to say that men cannot take those positions, but they may not want to.

“Today young girls are told they can do anything, go into any occupation. But if boys express any interest in traditionally female occupations, they get teased and bullied,” Ms. Coontz said. “Lots of guys are not understanding what’s happening to traditional low-income or middle-income male jobs.”

Jobs in the male-dominated manufacturing industry and in other sectors involving manual labor have been, and still are, in structural decline. These careers can also be hard to maintain indefinitely because youthful strength eventually fades. And now many manufacturing workers do not have pensions to carry them through when their bodies do break down.

“It doesn’t surprise me that in a poor economy women are ramping up their schooling,” said Heather Boushey, an economist at the Center for American Progress, a left-leaning research organization. “The real question is: Why aren’t more men doing that too?”

The main risk in going back to school is the accompanying student loan debt. Tuition increases have been outpacing inflation for years, a trend accelerated by state budget cuts.

“Our funding per student has been cut 25 percent in the last three years,” said Stephen Scott, the president of Wake Technical Community College in Raleigh, N.C., which is one of the fastest-growing community colleges in the country. Consequently, class sizes have risen, and so has tuition. But the students — again, mostly women — still pour in.

“We now have 6,000 students on a waiting list because we didn’t have the resources to offer more classes,” he said.

Those attending more expensive private schools, like Ms. Baker, will have an even tougher time guaranteeing that their educational investment pays off. Including the loans that financed her undergraduate education at Wartburg College in Waverly, Iowa, she will complete her master’s program next year owing about $200,000 in debt.

“I have to have faith that I will eventually get a good job that pays enough to pay my living expenses and pay back my loans,” she said, “and hopefully make me happy in the process.”