By Katie Kieffer
Image credit: “Alex ref room III” by NJLA: New Jersey Library Association on Flickr via Creative Commons.
If you want a good education and a pile of money, you do not need a college degree. At least, not if you’re an American. Modern-day higher education is failing students both in terms of life-long earning potential and overall educational quality. Today, I will explain why college degrees are becoming inconsequential and offer a set of possible solutions.
When your college funds are going to professors like sex toy demo guru, John Michael Bailey at Northwestern University, it’s probably a good time to look at what your investment is really getting you. The cost of college tuition is rising significantly faster than inflation and wages are not keeping up with inflation, reports The Wall Street Journal. Meanwhile, the average salary for college graduates dipped 1.7 percent from 2009 to 2010, says The New York Times.
More School, Less Pay, Fewer Jobs
Government policies such as high taxes and Clinton-era loose home-ownership policies led to the current economic downturn and have created a situation where a higher education yields higher debt and fewer high-paying job opportunities for college graduates.
Today, a plumber with a high school diploma can out-earn a teacher, an MBA-holder, and, even a doctor. This is due to factors like rising tuition and student housing costs, the greater number of pre-retirement years spent studying, mounting student loan debt and the way the progressive income tax hits a doctor harder than a plumber who will spread his or her wealth over more years in the workforce, Professor Laurence Kotlikoff explains in Bloomberg.
Even before the government-induced economic downturn, U.S. entrepreneurs proved that a college degree is unessential to success. Consider billionaire college dropouts like Bill Gates, Ralph Lauren, Paul Allen, Steve Jobs, Larry Ellison and Michael Dell. Or, look at Taylor Swift. The 21-year-old country pop artist didn’t need a college degree to earn $45 million and the title of 2010′s 12th Most Powerful Celebrity from Forbes.
Taylor Swift at the 2008 American Music Awards. Image credit: “Taylor Swift” by Archman8 on Flickr via Creative Commons.
Yes, Charlie Sheen didn’t go to college either, but let’s just assume that he’s an outlier.
When students graduate from college today, they have a hard time finding well-paying jobs in the private sector. After long searches, many college grads give up on landing a job in their preferred career paths. This month, The New York Times reported that young college grads are joining the public sector in droves. Young people are settling for government jobs, because, at the end of the day, they need to pay the bills.
In February, the President tried to motivate the business community to create jobs with a “neighborly” fruit cake. Unfortunately, businesses can’t magically create jobs from desserts. U.S. corporations have less buying power in the U.S. today due to the 35 percent corporate income tax rate. It is simply more profitable to do business abroad.
For example, by using completely legal income shifting strategies such as the “Double Irish” and the “Dutch Sandwich,” Google lowered its tax rate to just 2.4 percent and cut its taxes by $3.1 billion over the past three years. Less-educated or more business-friendly populations are increasingly taking “knowledge” jobs from the U.S. and the U.K., including teaching jobs, the Guardian reports.
More school, meager gains in knowledge
The quality of a college education is deteriorating while the price is going up. Studies prove that students show essentially no gains in learning during their first two years of college. College is so easy that most students can surf through college by spending 50 percent less time time studying than previous generations and still achieve a 3.2 grade-point average.
Even Ivy League colleges are resting on their laurels and failing to live up to their reputation of greatness. “Many other university programs have caught up with them academically,” W. Kent Barnds, vice president of enrollment, communications and planning at Augustina College, told USA Today.
Image credit: “Harvard” by tom.mendalka on Flickr via Creative Commons.
Potential Solutions
1. Eliminate anti-business policies. For example, slash the corporate income tax rate so that U.S. corporations will retain and create well-paying jobs in the U.S. that outweigh the costs of rising tuition and inflation.
2. Encourage innovation by making entrepreneurship culturally acceptable. Not everyone needs to go to college. Sure, Steve Jobs dropped out of college, but now we have iPads. Certain young people will excel by putting the $55,000 a year that they would have spent on tuition at a prestigious institution towards building a small business.
3. Reduce college bureaucracy. Is it necessary to have fluffy positions like the “Dean of Student Life” or the “Director of Campus Diversity?” Leave these roles to student volunteers in campus clubs and students will see the savings on their tuition bills.
What do you think? What are your ideas for preventing college degrees from becoming an unessential debt burdens on young Americans and their parents?
Flickr credits:
Here’s the link to the article Katie wrote and to the NYTimes piece:
http://katiekieffer.com/2010/02/25/dumped-blame-washington/
I’m not sure what your point is in your second paragraph. You seem to go back and forth.
Again, not sure what your point is in the third paragraph with your comments regarding Steve Jobs and Google partners. Steve Jobs didn’t finish college. That’s a fact. He has hired many people, including countless college grads. I think you are ignoring Katie’s points which are that that college is valuable, it’s not necessarily the right fit for everyone, and, that right now we need to improve our higher education so that it is more educationally sound and doesn’t land every college grad in massive debt when they graduate. I’m pretty sure you and I could agree on that.
Hello again,
I would love to be directed to the article Katie authored which explains the housing bubbles connection to Clinton era loose housing policies, but I presume I can find it. However, the New York Times article is…well, quite beyond my powers to find in a reasonable time frame. You could be generous and point me to it. I would ever so much appreciate it. But, I hope you will forgive me when I don’t take your word for it. Further, even if I did take your word for it, I would still appreciate an understanding of the causal relationships that you and Ms. Kieffer are referring to.
The elitist position that more college graduates start successful businesses than high school graduates will help America and will solve the problem Katie seems to be alluding to…well, it undercuts one of the solutions to the problem she is posing. I contend that more college graduates start small businesses than high school graduates. This is an empirical question, which I admit, I don’t have any evidence to support. However, I’m sure the information is available somewhere…actually, The Economist’s claim, found in their last issue of 2010, that college graduates earn over their life time 23% more than high school graduates, and then those with advanced degrees earn even more…
I see your Steve Jobs, who, mind you, took a sabbatical in India where he experimented with LSD (so, should we all do that? to become more entrepeneurial.), and raise you a Larry Page and Sergey Brin, co-founders of Google, who started Google in their garage while they were pursuing their Ph.Ds in computer science at Stanford.
Cheers,
l.w.
Katie’s earlier article and The New York Times have both explained the link to the Clinton-era loose home ownership policies.
I’m not sure how randomly tossing out names of people who may assist Steve Jobs negates the fact that he didn’t complete college and yet he used his entrepreneurial skills to start Apple and employ countless people. The elitist view that college grads are somehow better than non-college grads does not help America or solve the problem which Katie is posing: What steps do we take as a country to make college degrees a more valuable investment for students?
Love your work, Katie!
Hi again,
“Steve Jobs is the Job-creator” Oh, I see. What about his partners? Steve Wozniak and Mike Markkula? What about those academic researchers who are responsible for the advance in computer science and computer engineering? What about those military researchers who are responsible for the internet? They all had college degrees; they are all sine qua nons for Steve Jobs and his fancy gadgets. What Newton said about himself can equally apply to Jobs, He only got so far because he stands on the shoulders of giants. I will argue that he stood on the shoulders of giants who all had advanced college degrees. Further, I contend my point still stands, College graduates stil create more jobs than those who have never gone to college.
“Tracing the source of the problem back to its orginitation” What would that be? Would it be the so called CRA, Community Reinvestment Act, which was first signed into law in 1977, albeit during Carter’s administration? Almost ever President since then has made amendments to it. Bush the first increased the power of the law in 1989 The Financial Institutions Reform, Recovery and Enforcment Act. Clinton took a swipe at CRA in 1993 with the purpose of decreasing the procedural burden banks had to bear in order to comply with the law. In 1999 Clinton signed into law the Gramm-Leach-Bliley Act, which liberalized the banking industry, i.e. “This law repealed the part of the Glass–Steagall Act that had prohibited a bank from offering a full range of investment, commercial banking, and insurance services since its enactment in 1933.” This act can be seen as leading to the Collatorilized debt obligations that sunk Lehman’s, only in the sense that it gave Banks the freedom to create such financial products. However, to get there someone has to create those financial products and the banks have to have spectacularly bad risk managment. Creating financial products and running banks’ risk managment is not the government’s job, right? I suppose it could be, I think that is what Basel 3 is all about, improving world wide regulation of banks’ risk management, among other things. So, again, I assert that “Clinton era loose housing policies” was a small player in the credit crunch.
Great post, Katie! I think you make points that challenge people to think in new ways and hopefully find ways to make college a better investment, educationally and financially!
With regard to the previous commenter, Steve Jobs runs Apple and he is the boss of any developers who may have worked on the iPad or iPad 2. It doesn’t matter if they have college degrees or not – your point still stands. Steve Jobs is the job-creator, and if it weren’t for him none of those developers would have jobs and the technology probably would never have existed, especially so soon and in such a sophisticated manner.
I also agree with your point on Clinton-era loose policies. I don’t ever remember you defending Bush, I think you’re just tracing the source of the problem back to its origination. Bush perpetuated Clinton’s poor policies, but that doesn’t take away from the fact that Clinton instituted them.
Hello,
“Sex toy demo guru” seems to suggest that his research is all about demonstrating sex toys. Last I checked Dr. Bailey researched the etiology of sexual orientation. Is sexuality a topic that should not be studied systematically by the Academy? By what criteria do we say that a prof should not study a certain topic?
Further, you seem to suggest the Dr. Bailey himself was doing the demonstrating. Last I heard he had invited some BDSM advocates to discuss their life style and demonstrate their toys after class to those who wished to stay…I remind you the class was about SEXUALITY. You seem to imply that a class about sexuality is a poor use of our money. Why? The sex toy industry is a huge money maker and job maker, here and around the world.
You’ve commented on the “The Clinton era loose homeownership policies” on several occasions. I find this a tad odd, considering that Bush had 8 years to counter act them. He didn’t; in point of fact, I offer this quote from him to suggest he agreed with the “Clinton era loose homeownership policies”:
“We can put light where there’s darkness, and hope where there’s despondency in this country. And part of it is working together as a nation to encourage folks to own their own home.”
- President George W. Bush, Oct. 15, 2002
Further, the private sector is not innocent in regard to the housing bubble or the credit crunch. In fact, it is hard to find someone in America over the age of 30 that is innocent. As a country we have been consuming on credit. That will push up prices, i.e. causing bubbles, as well as eventually coming to bite us in the ***. It has, spectacularly. To lay blame on the foot of anyone person or party or policy is to ensure that we will see these problems again. For it is certain that more than one thing has to be changed for us to avoid this kind of credit crunch in the future.
As for your suggestions as to how to solve the problem you mention. I will admit making America more business friendly is laudable. Why is it so hard for congress to do so?
Your second suggestion is just silly. MIT is responsible for more patents than Apple. MIT graduates and graduate students start more high tech businesses than all those that tried to start a business right after high school. These are business that create jobs, high paying jobs, rather than minimum wage jobs. College fosters entrepreneurship. How much you want to bet that all those that were involved in the creation of the Ipad and the Ipad2 have college degrees, if not advanced college degrees?
As for your third suggestion, why are there such positions in the first place? I would bet there are market pressures involved. You forget that college is still a business. Colleges have an economic incentive to make their college-life most appealing to prospective students. If the dean of student life does that, the position is a value adding position to the university. Thus, fat chance getting the university to dispense with the position.
Thanks much, ciao.
l.w.