That only works because employers make a higher profit with better educated people.

Only to a certain degree. Exxon's been happy to lay off engineers and programmers by the thousands with the downturn in energy markets. However, they've always got a door open for entry level rig workers and cargo ship deck hands, as these jobs are higher risk and lower reward.

Educated professionals have their place, but sometimes you just need someone to turn a wrench. And because these low-skill jobs are more fungible, the businesses have an easier time swapping out younger and less experienced workers for their more expensive veteran peers.

This is what ultimately keeps labor rates in low-skill industries down. As jobs become more formulaic - more assembly-line driven - the wages commanded by the people doing that labor falls, in an unregulated labor market. Education-added-value has far less to do with it than the fungibility of the person doing the job.