Monday, December 09, 2013

How long should we continue to pretend that college pays?

[Whatever] the causes, the political consequences of a continuing decline in the real average wages of young college-educated workers will be momentous.
If you are nodding in agreement with that statement, then we have very little to disagree about.

I have now made it a routine of sorts to remark in the introductory class, in the appropriate contexts, that the rest of their lives will be exciting, but challenging when it comes to jobs and economic futures.

It is not merely their jobs and incomes that worries me.  That too.  What worries me more is this--we are not designed to sit around and do nothing, even if somebody takes care of our basic needs.  It is not for nothing that we have that old saying that an idle mind being a devil's workshop.  It does not mean that one becomes destructive--not doing anything constructive can be a challenge for most of us.

The animals in us might look for rewards via food and sex for what we do.  But then we are more than mere biological creatures.  We think. Some more than the others.  The rewards for thinking are way more than food and sex.  Some of those rewards are intangibles--like love and family.  However, these intangibles don't just happen, and meaningful work that pays is the route to many of those intangibles too.

Which means, well, we have a problem when the youth have no jobs waiting for them.  Jobs that pay well.  A big problem.  Not a new one, of course--even I have been blogging about this (like here,) and writing op-eds on this, for a few years now.

Even when people talk about these issues, they tend to overplay the income inequality issue.  Yes, it is awful how the top one percent, and the top 0.1 percent are getting richer by the second.  But, that takes the focus away from the larger issues behind these conditions:
college-educated workers in the United States are now subject to a combination of global market forces and public policies that are reducing their economic prospects.
We will have to re-work that old Bill Clinton campaign slogan to "It's the global economy, stupid!"

I am reminded of this succinct statement of the problem:
The paradox is this. A job seeker is looking for something for a well-defined job. But the trend seems to be that if a job can be defined, it can be automated or outsourced.
The marginal product of people who need well-defined jobs is declining. The marginal product of people who can thrive in less structured environments is increasing.
I suppose I am having an additional layer of problem with this because of the conflict within me that I blog like this while working in the higher education business which promises students that if they work hard and get that diploma, well, the American Dream is all theirs.  A bizarre version of an Orwellian Doublethink!

I am sure the folks at the university have noted that for a long time I have not participated in any student recruitment events--it will be one more blot on my permanent personnel record!  Strangely enough, nobody has directly asked me for my reasons--at least if they did, I can present my arguments that we are massively overselling higher education and find out how they justify the hype that then imposes a tremendous cost on students.

Maybe this is nothing but the end of the term blues. Or because I am under house-arrest thanks to the snow and ice.  Maybe it will be a wonderful new year.

4 comments:

Prats said...

I have always wondered that Cost Benefit Analysis of highly leveraged education through mortgage will soon make it a business decision guided by return on investment rather being driven by quest for knowledge. Increasing cost of education and the decline in the real term wage value are both an equal contributor in this.

Sriram Khé said...

Oh yeah, as I have often argued in this blog and elsewhere, we have atrociously created synonyms out of credentialing for jobs and the pursuit of knowledge. Most students are in colleges because they view the degree as the credential needed to find a job. Almost always, colleges also make that kind of a sales pitch to students and their families. The bait. "You can do whatever you want to do" ... "The world is your oyster" and all that kind of attractive slogans.
And then the switch when they meet with academic counselors or even the very people who sold them the bait--students are told that college is not any prep for a particular job as much as it is to discover who they are and how college is prep for lifelong learning.

I way prefer full disclosure up front: unless one is in a professional program (was was my undergrad in electrical engineering) or on the path towards a professional program, college isn't a job-prep place at all.

I tell students that the four years of time and the money they spend is one heck of an investment that they need to carefully think through. But, the sales pitch is way too slick and convincing and many find themselves highly leveraged when reality hits them. Then, instead of simply walking away from the sunk cost, some get into more debt by going after graduate degrees that won't do any good--from an investment calculation.

Colleges are happy to take all the money, build fancy buildings, and provide the environment for the two most important things that youth might want at that age--sex and entertainment!

Ramesh said...

Yes, it is the global economy stupid. In the last two decades, actually the numbers of jobs has vastly increased - not reduced. Standards of living have also significantly increased for everybody - not just the top 1%. Automation is there but jobs have not reduced. The problem is that jobs are in China and India - not in the West. But globally the trend clearly is more jobs and higher education is the passport to them.

Take the case of India, which we know well. We can't get enough people to fill jobs. The attrition rate amongst janitors - those who clean the floor in malls and corporate offices is 30% per annum - that is a job which needs no skills at all, and yet we cannot find enough workers. Almost every businessman you meet will moan about not being able to find workers, whatever be the position and skill level. Part of the problem is the dole for every rural guy ; so its as paying to sit around and do nothing than work hard - defeats your hypothesis of an idle mind. But still, the plentiful jobs is a great position for a country to be in.

The cost benefit equation for higher education in the US might be warped, but it is alive, well, and very much kicking in both India and China.

Sriram Khé said...

Oh yeah, I agree with you that the labor market dynamics are very different in India or China compared with here in the US. And, therefore, correspondingly, the role that higher education plays also differs.

However, in the "it's the global economy, stupid!" we need to understand that now, the US labor market is not independent of the Chinese or Indian labor markets. This means that when we here in the US want a certain compensation for the work that we do, well, in the old days we were able to get that because there was nobody else in the world who could do that. It is, of course, no longer that story. It's the global economy, stupid! Which then means that going to college to get a diploma is no longer a guaranteed path to the American Dream either.

In addition to higher education (here) spinning the highly misleading and irrelevant narrative about college and jobs, politicians also do a huge disservice by talking up college and, even worse, by portraying India and China as our competitors who are stealing "our" jobs.

Oh well ... time to take a break from blogging ... see you all next year ;)