Democracy and education are always good. That is perhaps the most fundamental core belief of the vast majority of American parents; certainly more of them hold to it than believe in God, the sanctity of marriage or the tuck rule. But just as American faith in democracy has been shaken by the election of Hamas in the Palestinian Authority and by what appears to be the looming failure of the Orange Revolution in Ukraine, the belief in higher education as a universal panacea will be severely tested in the coming decades.

The belief in a near-sacrosanct prime directive to pursue education is primarily rooted in the ability of the more highly educated to command higher wages from their employers. This has long been true, but the advantage was significantly compounded during the last four decades, when machine automation, computers and outsourcing enabled U.S. employers to replace skilled, highly paid but less-educated American workers with machines and inexpensive foreign workers. This resulted in the current situation where a college-educated worker can expect to earn twice the income of a worker who possesses only a high school degree over an average lifespan.

But that trend has largely run its course. So much of the American industrial base has already been exported that much of the remaining blue-collar labor is the sort that cannot possibly be outsourced. While it is much cheaper to find workers to assemble electronic hardware in Taiwan or Mexico, it is not cost-efficient to hire a Korean plumber, security guard or retail clerk, because regardless of how low the hourly wage might be, airplane tickets are more expensive.

However, the development of the Internet and a reliable global communications infrastructure means white-collar office workers, those for whom a college degree is almost always considered a necessity, are increasingly replaceable, regardless of their level within the organization. Location is all but irrelevant in an age of conference calls, project management software and e-mail, and if an executive can hire a newly minted MBA from India for a fraction of the salary of an American graduate of Harvard, he would be a fool to not at least consider the costs and benefits.

While there are a number of barriers to white collar outsourcing, including cultural and language barriers, these are far less daunting than they might appear at first glance. When I was the CEO of a technology company a few years ago, I ran it one time zone and several latitudes away from my entire employee base. I happened to do so from within the United States, but could have as easily run the operations from the Bahamas, Mexico City or anywhere else with telephone lines and decent Internet connections.

Remote management makes group meetings all but impossible, but as anyone who has ever worked in an office knows very well, intra-corporate meetings are negatively productive and cause more problems than they solve. Shunning the office also tends to cut down on other productivity-enhancing, profit-building activities such as water cooler conversations, sexual harassment and the daily commute. And while one might not get to know one’s fellow employees quite as well, it’s not as if the addition of a few cubicle-dwelling corporate rats to one’s social circle is likely to make a significant difference in one’s quality of life anyhow.

It is interesting, then, to note that what two economists at the Economic Policy Institute, Lawrence Mishel and Jared Bernstein, call the skill premium shrunk 6.8 percent between 2000 and 2004. As Geoffrey Colvin of Fortune notes:

The real annual earnings of college graduates actually declined 5.2 percent, while those of high school graduates, strangely enough, rose 1.6 percent.

Meanwhile, even as the compensation advantage it brings is reduced, the cost of a college education is quickly rising. A comparison of statistics taken from CNN/Money shows that the total cost of a four-year public degree has increased from $8,086 in 1999 to $11,354 in 2004, a 40 percent rise, while the cost of a degree from a private university has gone from $21,339 to $27,516, a smaller but still hefty 29 percent increase.

And the trend has just begun, as few higher-level executives realize just how eminently replaceable their management staffs may be, most likely because it requires recognizing the possibility of their own inherent superfluousness. Once the old school begins retiring and are replaced by technologically savvy executives who understand the irrelevance of location to intellectual labor, one should expect to see radical changes in the world of white-collar employment rivaling those that rocked the blue-collar world in the recent past.

Of increasingly questionable quality, it is probable that a college degree has never been of lower value. Parents and prospective students alike should seriously investigate the matter before blithely assuming debt in order to follow the educated lemmings on a path that appears to be ever more outmoded.

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