“Overproduction” of PhDs

I am trying to find some logical way to misunderstand what appears to be a bad joke at this stage of our collective history. While I understand, or am trying to, the institutional and structural changes taking place in the academy, I cannot wrap my head around the following dumbed-down statement.

We are over-educating too many people and, consequently, are suffering from a surplus of people who know too much.

It is my own dumbed-down statement. And I want it to stand as one absurd way to understand what is happening. My imagination is strained.