Note: this was originally written in November 5, 2011, on my Facebook. At the time, I knew that the “Great Recession” was affecting me, people graduating from college at that time, as well as people with existing jobs. For example, tourism is a big source of jobs, so it was common to see hotels cutting back hours for all employees or furloughing (a business term meaning unpaid leave of absences) employees, as an alternative to laying off employees. My idea was not that college is a bad idea, but for many people, it will not be a good investment. Whether that is because they will choose a major w/o real-world job prospects, they elect to go to an incredibly expensive school (think $60k+/year tuition), or they have a better chance of success in a trade or vocational school like plumbing or coding or working right away. I dug this article back up because student loan debt is a big topic in the upcoming elections among Democractic Party candidates. Not only is the value of a college education diminishing, but the cost of tuition continues to rise as well. Also, to be honest, I was a bit bitter that I had spent so many years getting a college degree, yet it was so difficult to find a job in my area of study. This is reflecting in my writing, which is completely unedited.
A college education from a good school is like a new, BMW 3-series: it’s a luxury item meant for wealthier people, yet poorer people get it anyway, leaving themselves in a financial mess. With Occupy Wall Street-fever spreading the country and with the economy and job market looking like Lindsey Lohan after a 3-day coke-binge, I have done a lot of thinking on the value of the traditional, 4-year education.
1. Money In vs Money Out
There’s a simple idea behind a college degree:
increased $ potential after college > cost of college
Can you tell me that liberal arts, photography, and family studies will increase your earning potential by that much? Many jobs will pay a few dollars more per hour if someone has a degree vs someone without. However, that incremental pay might not even be worth it because of opportunity costs.
2. Opportunity Costs
If Warren Buffet gave you $25k and 4 years to make something of it, do you think you he’d be impressed if at the end of the 4 years, you had a diploma to show for it? My guess is he’d likely go Chris Brown on your ass.
(Note: $25k is my estimated cost of education+books+fees at my state university. Change this figure to your estimate.)
Time is money.
If someone starts a career job out of high school, they will have accumulated experience, skills, and indispensability to their employer. A college graduate, after 4 years, will have a piece of paper and no guarantee of a job.
Moreover, general education pad the time needed to graduate. If take a look at your college transcript and your job today, you’ll probably see 1/2 of the classes you took are irrelevant to your trade. That irrelevance costs time and money. Honestly, why the hell did I have to learn about tectonic plates when I’m just going to crunch numbers for the rest of my life?
Parents want the best for their kids. For most middle class parents, this means a college education is mandatory. The parents want their kid to have an advantage over the next kid (whose parents are thinking the same thing), so there are many middle class kids going to get a degree eventually. Add poor kids with scholarships and financial aid into the mix. Add kids who want an education for themselves and take out student loans. And add kids of extremely wealthy parents, because for the wealthy, graduating from a prestigious school is almost a requirement. Inevitably, the state of education looks like this:
college graduates looking for jobs > jobs looking for college graduates
The job market is more saturated with college graduates than hip-hop is with auto-tuned tracks (shawty! yeaaaaaaa). An exxagerated effect of this unbalance could be seen in China a couple years ago, where graduate students were applying to sell pork:
With that said, we have some really, really well-educated secretaries and dogwalkers in today’s economy.
Feel free to share thoughts.