Job Skills About half of college grads underemployed => disaster?

[gleem]

[QU117795OTE="NTL2009, post: 5809743, member: 599596"]My first comment is that there is no justification for having MW keep up with inflation,[/QUOTE]

Then there is no justification for any type of remuneration to keep up with inflation.

I'm questioning whether a MW is even a reasonable/desirable way to go about it.

MW has been accepted for 79 years.

http://www.heritage.org/poverty-and...nditioning-cable-tv-and-xbox-what-poverty-the Really, you believe what you are lead to conclude? I would really like to see their data/analysis. In 2005 the average wage was $35449 per person. The threshold for poverty for a family of four was $19971.

In 2014 typical families having two wage earners have an average AGI (not total) income of about $117,795 for those filing jointly and for those filing a separate tax return had an AGI of $64,819 ( therefore $129,638 household). Adjusting for the increases in wages between 2014 and 2005 which was 1.26 the three numbers above are $93,648 (household filing jointly), $51,531 (filing separately), $103,062 (household filing separately). These numbers are only for families and do not include singles or heads of households. The median household AGI in 2014 was $35,000 while the average was $73,298. Adjusting to 2005 the median should have been about $28,000 and the average $58,600.. When the median is half the average there is a problem.

 

[NTL2009]

OK, I get it, you don't like what Heritage presented! Like I said, I hope to review it more in depth, but it will be a few days before I get to that. Maybe their take on it is garbage, I hope to find out.

Now, I'm not trying to back-peddle out of that, but it really was just a little side-diversion (does MW really need to keep up with inflation?), from the overall topic of should we have MW at all. And I think that questions still stands, regardless of the inflation adjustment issue or whether the article I linked is garbage or not.

MW has been accepted for 79 years.

That doesn't mean it's right. You don't want examples, do you (no, you really don't!)?

 

[NTL2009]

... When the median is half the average there is a problem.

OK, I really do need to be moving on for a while, and maybe you were trying to say something else, but...

As I said before, I do believe in safety nets. But a safety net, IMO, has nothing to do with 'keeping up with the Joneses". It means, to me, to provide a reasonable level of comfort and safety for people who cannot manage that for themselves.

edit/add: Or, if that wasn't in reference to MW, but just to the shift in the spread of income, well, just like I don't think it is up to anyone else to determine the 'right' price for anything, I also don't think it is up to us to determine the 'right' spread of income. But there I go with that 'consistent' thing again.

I've witnessed a huge spread in capability and motivation across people at the high school and college level. Compare the top 5% in a graduating class to the bottom 5% of those who started (some/many of that lower 5% never made it to HS graduation, some are incarcerated). When you observe that, how can you be surprised in the difference in outcomes? Or even compare the top 5% to the 'average' or 'median' student. Big difference!

 

[olivermsun]

does MW really need to keep up with inflation?

Presuming that at some point in time it was determined that x is a minimum acceptable wage, then I think you'd have to explain why, after falling to keep pace with inflation, it wouldn't fall below minimum.

the overall topic of should we have MW at all. And I think that questions still stands, regardless of the inflation adjustment issue or whether the article I linked is garbage or not.

That doesn't mean it's right. You don't want examples, do you (no, you really don't!)?

Actually, I think examples would be helpful to the discussion.

 

[NTL2009]

OK, last call!

Presuming that at some point in time it was determined that x is a minimum acceptable wage, then I think you'd have to explain why, after falling to keep pace with inflation, it wouldn't fall below minimum. ...

But I am not "Presuming that ... x is a minimum acceptable wage". I'm saying that is for a free market to decide (not a free-market w/o some controls and regulations, not the 'wild-west', which is a common rebuttal).

MW has been accepted for 79 years.
That doesn't mean it's right. You don't want examples, do you (no, you really don't!)?

Actually, I think examples would be helpful to the discussion.

Oh boy. Slavery. And since this is a physics forum: belief that the Earth is flat and is the center of the universe. Spontaneous generation (two millennia > 79 years).

Is that enough? It's not a comparison, it's a logic test. Something existing for a long time does not make it right. Other things are needed to make it right.

 

[jack action]

Do people not see how dire this situation is? Hundreds of billions are burned without any return. Sure, plenty of people profit. But with such a big portion that doesn't, it's scary. That's 4 extra years that these grads could have spent contributing to the workforce. That's also billions of dollars wasted by government investment.

It also shows that a large amount of people are easily willing to gamble on 50/50 chances, which might be more telling than the dollar amount lost. Is this a bubble waiting to burst?

What would resolve this situation? I'm thinking that borderline students(those that are not already great academically) should probably just wait out the storm and go to college at the right time when a profit appears to be highly probable; certainly better than just a coin flip, actually, they should go when it's much better. Well, we wouldn't even know if this is a viable solution since people's tendency to overreach mean that not enough would listen. The advice is probably already out there.

Just to set back this thread to the original - and very interesting - subject, let me add my 2¢.

People nowadays have this very weird vision that (higher) education must be linked to a job. It shouldn't be. It's about developing skills, increasing your knowledge and shaping your critical thinking. Yes, those should help you find a job, but that should not be the goal. Sadly, it has become the sole objective with this era of mandatory education for everyone. An investment that must pay back in short term.

Also education in itself is a business that employs people who give a service. Thus, on an economic viewpoint, there is no waste. If people stop «buying» education, they will only buy something else. So I don't see a bubble bursting. Anyway, nothing society wouldn't recover economically speaking.

How come if I take guitar, dance or italian lessons, nobody accuses me of wasting my time and money because I don't have the intention of make a living out of it? (Although it doesn't mean it won't help me in my work either.) How come if someone spends more time and money studying whatever, it is suddenly considered a waste of resources? How much knowledge and education is too much knowledge and education?

Although I must agree that if someone puts himself in huge debt for it or the government finances blindly everyone, that becomes a problem.

That kind of thinking - studying in hope of a better pay instead of the pleasure of learning something new - defies the purpose of getting an education in the first place. It becomes only a race to get a diploma to fill an empty space on a CV. You must appreciate what you learn, otherwise you will never see what you can do with it. That is why we have so many professionals today that don't deserve their title; Worrying more about how much they make rather than producing a quality good or service.

I remember the countless people, when I was at university, that were telling me that I didn't need to know something because a computer or a «less skilled» worker would do it for me; Or when I was told that I could blindly copy someone else's work to pass a course. But I want to learn this stuff! I like it! Why would I try to not learn it? I guess I was odd that way. I remember than in engineering, we had to take some courses from a list of subjects out of the engineering curriculum. There was a chemistry course that was in the list by mistake, a class meant for people in the «non-science» studies, which was some entry level stuff for engineering students. Most engineering students took that course because it was an easy pass, maybe even an easy «A» to boost up their GPA. I refused to take that course because, from my point of view, I wasn't learning anything and I would've wasted my time and money taking it. I better wanted to learn something new that was more interesting (I finally chose an American history class).

What would resolve this situation? People will have to set their values to something else than always making more money. People will have to learn to share their knowledge with one another rather than selling it to the highest bidder, sometimes at an inflated value. Do parents charge their kids for teaching them to speak or potty-trained? That would be silly. So why sharing higher knowledge becomes a business?

 

[olivermsun]

OK, last call!
But I am not "Presuming that ... x is a minimum acceptable wage". I'm saying that is for a free market to decide (not a free-market w/o some controls and regulations, not the 'wild-west', which is a common rebuttal).

Given that a certain minimum wage was originally agreed upon as a safety net, it seems logical that such a wage would need to keep up with inflation to continue to fulfill whatever its purpose as a safety net. Contrary to your earlier argument, the safety net would in fact need to "keep up with the Joneses," if by "Joneses" what you mean is the dollar amount corresponding to the same level at which the safety net needed to kick in.

Oh boy. Slavery. And since this is a physics forum: belief that the Earth is flat and is the center of the universe. Spontaneous generation (two millennia > 79 years).

These are really strange examples. Are you saying that a minimum wage is like slavery? Or that the minimum curvature of the Earth is flat? Actually, I have no idea what argument you're trying to make with these examples.

Is that enough? It's not a comparison, it's a logic test. Something existing for a long time does not make it right. Other things are needed to make it right.

The logical argument here is that, assuming that a minimum wage was agreed upon earlier (it was) and it worked before, at that level, without wreaking havoc upon the economy (seemingly it did), then it would need to be adjusted according to inflation for the same situation to continue...

 

[olivermsun]

Just to set back this thread to the original - and very interesting - subject, let me add my 2¢.

People nowadays have this very weird vision that (higher) education must be linked to a job. It shouldn't be. It's about developing skills, increasing your knowledge and shaping your critical thinking. Yes, those should help you find a job, but that should not be the goal. Sadly, it has become the sole objective with this era of mandatory education for everyone. An investment that must pay back in short term.

...

How come if I take guitar, dance or italian lessons, nobody accuses me of wasting my time and money because I don't have the intention of make a living out of it? (Although it doesn't mean it won't help me in my work either.) How come if someone spends more time and money studying whatever, it is suddenly considered a waste of resources? How much knowledge and education is too much knowledge and education?

An education is a wonderful thing, and one that pays in the long term instead of being focused on near-term profit is a true luxury. However, between now and Nirvana, one still has to eat. If you can afford guitar lessons, then more power to you, but if you starve as a result then it might be fair to criticize you for wasting your time and money. Finding the right balance is a personal decision, but it's also a choice that society can influence. you want people to think deep thoughts and solve hard problems (or just live happy, fulfilling lives) you might want to reduce the chance that they starve halfway through a really good thought...

 

[jack action]

but if you starve as a result

you might want to reduce the chance that they starve halfway through a really good thought...

Not being able to buy a Porsche is not starving, though.

 

[olivermsun]

Not being able to buy a Porsche is not starving, though.

That's starvation of the soul!

 

[UsableThought]

OK, I get it, you don't like what Heritage presented!

Yes, sorry, I went on at too much length, probably.

 

[gleem]

However, between now and Nirvana, one still has to eat. If you can afford guitar lessons, then more power to you, but if you starve as a result then it might be fair to criticize you for wasting your time and money. Finding the right balance is a personal decision, but it's also a choice that society can influence. you want people to think deep thoughts and solve hard problems (or just live happy, fulfilling lives) you might want to reduce the chance that they starve halfway through a really good thought...

People have chosen "starvation" over career choices for a long time.. Artists ( visual , performing etc) are the prime example, Driven by the desire/expectation of attaining notoriety or self fulfillment people have deliberately chosen careers that require substantial material sacrifice. And they lived with it.

In many ways going to college has become like running off to Hollywood to make a splash in the films. Unlike actually going to Hollywood we do not have a lot of people warning them that they should examine this choice carefully before committing. And unlike Hollywood colleges are enticing people to come to them. because that is their business. I think a contributors to some of the problem are the for profit colleges that have sprung up in the last decade or so. They cannot afford to be choosy and definitely need to fill seats. What is the saying: You pays your money and you makes(takes) your choice(chance)".

 

[Vanadium 50]

it sounds to me from your above quote (with the bolded highlight) that you seem to be arguing how much better things were "back in the old days", essentially wallowing in nostalgia (something that always irks me).

What irks me is a shabby form of debate where one makes up hisown interpretation and then attacks it. I can't be wallowing in nostalgia for a period in which I didn't even exist. Furthermore, this objection can be applied to any situation where things were better in the past. And, just to definitely squash any claims of nostalgia, many things were worse in the past.

But this ignores the crucial fact that fewer people in the past those graduated from college/university in liberal arts and humanities degrees (of which I place film studies in the same category).

I'm afraid I can't parse this.

 

[gleem]

I came across a quote that seems appropriate for all college grad or anybody for that matter to keep in mind.

"Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education alone will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent."

Calvin Coolidge

 

[Dr. Courtney]

One big problem is that the government (and lenders) are just as eager to fund students with low GPAs seeking low value degrees with low earnings potential as they are to fund students with high GPAs seeking high value degrees with high earnings potential.

The funding mechanisms need to communicate more accurately to students that the value of their degree matters depending on the school, the GPA, and the major area of study. Money for college should be much harder to get for degrees with low earnings potential.

 

[olivermsun]

One big problem is that the government (and lenders) are just as eager to fund students with low GPAs seeking low value degrees with low earnings potential as they are to fund students with high GPAs seeking high value degrees with high earnings potential.

Suppose for the moment that this is a true statement.

If the government were "more eager" to fund students with high GPAs seeking high value degrees and "less eager" to do the opposite, wouldn't there be a concern that the government is over selecting for who will succeed and how they should do it? And are those the right criteria to select for?

The funding mechanisms need to communicate more accurately to students that the value of their degree matters depending on the school, the GPA, and the major area of study. Money for college should be much harder to get for degrees with low earnings potential.

Insuring that students have access to accurate information is a good thing, but actually weighting the opportunities is taking things a step further. To take an extreme example: should it be much harder to fund students who want to be elementary school teachers rather than those who aspire to be investment bankers because the latter have a (much) higher earnings potential? At least some people would argue we need exactly the opposite incentive structure.

 

[Vanadium 50]

Money for college should be much harder to get for degrees with low earnings potential.

Why?

If I am a lender, I primarily care if I am paid back. I'm not interested in social engineering. Unless STEM majors have lower default rates, I should want to lend to everyone.

 

[Dr. Courtney]

To take an extreme example: should it be much harder to fund students who want to be elementary school teachers rather than those who aspire to be investment bankers because the latter have a (much) higher earnings potential?

Surely you can't think it wise for most aspiring elementary education majors to accrue over $100,000 in debt. Given the likely salaries of most elementary education majors, I'd say it's going to be hard for them to pay back much more than $20,000-$30,000 from their salaries. Borrowing more ends up putting pressure for repayment on other parties (parents, spouses, etc.) Many times it is the taxpayer rather than the lender who is holding the bag when these loans are not repaid.

 

[olivermsun]

Surely you can't think it wise for most aspiring elementary education majors to accrue over $100,000 in debt.

I don't think that would be wise for most elementary ed majors, but that is very different question from whether the government or should be "eager to fund" elementary ed majors or not based on their earnings potential.

Given the likely salaries of most elementary education majors, I'd say it's going to be hard for them to pay back much more than $20,000-$30,000 from their salaries. Borrowing more ends up putting pressure for repayment on other parties (parents, spouses, etc.) Many times it is the taxpayer rather than the lender who is holding the bag when these loans are not repaid.

The taxpayer, in part, pays for public education anyway, and much of the financial pressure has always fallen on parents, spouses, etc., for anything beyond that.

On the other hand, a scarcity of qualified ed teachers because they have trouble finding/paying back education costs is also a burden on taxpayers.

 

[olivermsun]

Why?

If I am a lender, I primarily care if I am paid back. I'm not interested in social engineering. Unless STEM majors have lower default rates, I should want to lend to everyone.

You may also have a professional and/or legal obligation to inform the client when a loan is likely not in their best financial interests.

 

[gleem]

As far as teachers are concerned why not subsidize their education. Most European countries including Scandinavia offer free tuition to their citizens.

 

[Dr. Courtney]

I don't think that would be wise for most elementary ed majors, but that is very different question from whether the government or should be "eager to fund" elementary ed majors or not based on their earnings potential.

No, it's the same question. A bank should not lend $200,000 for a home only worth $100,000. Why should the government be eager to fund ANY degree worth much less than the loan amount? I'm not saying don't lend money to the elementary ed majors, just that the amounts should be more commensurate with the value of the degree and the likely ability of the graduates to repay the loans in a timely manner based on their earnings.

$30-$40k is a much more reasonable total loan amount for an elementary ed degree than $100k. But as it stands now, students can just as easily exceed $100k for an elementary ed or art history major as they can for electrical or chemical engineering. And a 2.0 GPA keeps the loans coming semester after semester. That's unwise.

 

[jack action]

It seems that the discussion is again going towards linking a degree to a job.

If that is the vision, then there is only one way for doing it right: The student or the government shouldn't finance those degrees, the companies that need them should. A contract stipulating that the person must work for a certain amount of time at a certain salary should be part of the deal.

The good company can be choosy, the good student can be choosy, the unchosen student can still earn a degree if he pays for it and, best of all, the government is irrelevant. That's how I like my economic system.

 

[FallenApple]

Just to set back this thread to the original - and very interesting - subject, let me add my 2¢.

People nowadays have this very weird vision that (higher) education must be linked to a job. It shouldn't be. It's about developing skills, increasing your knowledge and shaping your critical thinking. Yes, those should help you find a job, but that should not be the goal. Sadly, it has become the sole objective with this era of mandatory education for everyone. An investment that must pay back in short term.

Also education in itself is a business that employs people who give a service. Thus, on an economic viewpoint, there is no waste. If people stop «buying» education, they will only buy something else. So I don't see a bubble bursting. Anyway, nothing society wouldn't recover economically speaking.

How come if I take guitar, dance or italian lessons, nobody accuses me of wasting my time and money because I don't have the intention of make a living out of it? (Although it doesn't mean it won't help me in my work either.) How come if someone spends more time and money studying whatever, it is suddenly considered a waste of resources? How much knowledge and education is too much knowledge and education?

Although I must agree that if someone puts himself in huge debt for it or the government finances blindly everyone, that becomes a problem.

That kind of thinking - studying in hope of a better pay instead of the pleasure of learning something new - defies the purpose of getting an education in the first place. It becomes only a race to get a diploma to fill an empty space on a CV. You must appreciate what you learn, otherwise you will never see what you can do with it. That is why we have so many professionals today that don't deserve their title; Worrying more about how much they make rather than producing a quality good or service.

I remember the countless people, when I was at university, that were telling me that I didn't need to know something because a computer or a «less skilled» worker would do it for me; Or when I was told that I could blindly copy someone else's work to pass a course. But I want to learn this stuff! I like it! Why would I try to not learn it? I guess I was odd that way. I remember than in engineering, we had to take some courses from a list of subjects out of the engineering curriculum. There was a chemistry course that was in the list by mistake, a class meant for people in the «non-science» studies, which was some entry level stuff for engineering students. Most engineering students took that course because it was an easy pass, maybe even an easy «A» to boost up their GPA. I refused to take that course because, from my point of view, I wasn't learning anything and I would've wasted my time and money taking it. I better wanted to learn something new that was more interesting (I finally chose an American history class).

What would resolve this situation? People will have to set their values to something else than always making more money. People will have to learn to share their knowledge with one another rather than selling it to the highest bidder, sometimes at an inflated value. Do parents charge their kids for teaching them to speak or potty-trained? That would be silly. So why sharing higher knowledge becomes a business?

For cases like guitar learning or stuff like golf, money spent does not lead to profit. That is ok because usually people that do those things have money to spare and are doing those on their own free time when they already have a career. When it comes to higher education, people will gamble on it, even if they can't afford it. I've heard of people not paying their bills and ruining their credit just to pay for their kid's SAT classes. It's this wide spread mentality that is the issue. Also, Education is not a side investment where people working do on the side so that just in case they need a better job, they can fall back on their degree. It's an investment that requires 4 years of full time commitment because most schools charge per semester and traditionally wants people to graduate in a timely manner.

I think one resolution is to move everything to the unit system where people pay per unit instead per semester so that people can attend part time. That way they can easily work and earn a degree at the same time, which means that if the degree doesn't work out, they would have at least have advanced at their current job, which lessens the economic damage.

 

[gleem]

A contract stipulating that the person must work for a certain amount of time at a certain salary should be part of the deal.

Just like the military academies.

 

[FallenApple]

Why?

If I am a lender, I primarily care if I am paid back. I'm not interested in social engineering. Unless STEM majors have lower default rates, I should want to lend to everyone.

It is not too unreasonable to assume that people that have marketable degrees are less likely to default, at least until several proper longitudinal studies has been conducted to truly investigate the matter.

 

[FallenApple]

One big problem is that the government (and lenders) are just as eager to fund students with low GPAs seeking low value degrees with low earnings potential as they are to fund students with high GPAs seeking high value degrees with high earnings potential.

The funding mechanisms need to communicate more accurately to students that the value of their degree matters depending on the school, the GPA, and the major area of study. Money for college should be much harder to get for degrees with low earnings potential.

This already occurs to some degree. It is easier for medical students to get loans because the probability of them dropping out or not finding a good job post graduation is very low. I think much of the issue with government lending though, is that they need to cater to political correctness and keeping people happy.

 

[olivermsun]

No, it's the same question. A bank should not lend $200,000 for a home only worth $100,000. Why should the government be eager to fund ANY degree worth much less than the loan amount?

At the risk of the stating the obvious: some investments are seen as (potentially) returning much more than their short term financial returns, and hence a government might like to invest where a for-profit institution might not. Anyone who depends on, or has depended on government support of basic research ought to realize this.

I'm not saying don't lend money to the elementary ed majors, just that the amounts should be more commensurate with the value of the degree and the likely ability of the graduates to repay the loans in a timely manner based on their earnings.

This makes sense conceptually, but the details are a bit more hairy. Harvard-trained elementary ed teachers might not make vastly more than than teachers from state schools — does that mean that the government should be much more reluctant to give out loans to Harvard ed majors? Will Harvard students lose their loan eligibility as soon as they declare their major to be elementary ed instead of business administration or finance?

$30-$40k is a much more reasonable total loan amount for an elementary ed degree than $100k. But as it stands now, students can just as easily exceed $100k for an elementary ed or art history major as they can for electrical or chemical engineering.

Have you checked what even state schools are charging these days? They don't charge less for ed majors.

And a 2.0 GPA keeps the loans coming semester after semester. That's unwise.

The whole thing is unwise, but it isn't clear that further incentivizing people to choose EE over elementary ed is any less unwise.

 

[Vanadium 50]

It is not too unreasonable to assume that people that have marketable degrees are less likely to default

Show me the data. Without that, you're arguing that we should subsidize some majors over others based on assumptions.

 

[FallenApple]

Show me the data. Without that, you're arguing that we should subsidize some majors over others based on assumptions.

True. It's mostly a hunch that those are strapped for cash would have a harder time paying back. So grads working at Starbucks might have a harder time. Perhaps this data on income may serve as a proxy( but sure if it is a good proxy)

http://journals.sagepub.com/doi/abs/10.1177/0038040715602132

It shows that income differ across field of study.The next study shows that default probability goes up with lower income, though not specifically for student loans. But it's the best I've got.

To sum up, within the Lending Club data analyzed, the hypotheses are partially accepted: the higher the interest rate, the higher the default probability is. Loan characteristics, such as loan purpose; borrower characteristics, such as annual income and current housing situation; credit history and borrower indebtedness do matter. However, variables such as loan amount or the length of employment do not seem to be relevant within the data analyzed.

http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0139427

Sure, I understand that it might be hard to put two and two together for separate studies ,but if someone works at Starbucks post grad, common sense tells us that they are going to have a harder time paying back. For higher income ranges, this logic could breakdown, and the field of study might not matter that much.

I admit, this is bit crude compared to having a direct analysis on just field of study alone, but this does at least suggest that might be a connection and that this seriously needs to be investigated, especially when billions are at stake. Specifically, a large scale longitudinal cohort study is needed to really get to the bottom of this.

 

[Dr. Courtney]

At the risk of the stating the obvious: some investments are seen as (potentially) returning much more than their short term financial returns, and hence a government might like to invest where a for-profit institution might not. Anyone who depends on, or has depended on government support of basic research ought to realize this.

Over half of education majors are underemployed. See: http://www3.forbes.com/leadership/17-college-majors-that-report-higher-underemployment/

Why invest in more education majors when it is reasonably anticipated more than half of them won't be full time teachers? It makes more sense to match production with anticipated demand. Subsidizing production well in excess of demand is stupid.

 

[gleem]

This morning in my local newspaper is an article about a nearby trucking company that has initiated a debt pay-down program for college debt Only 3% of employers nationwide have such a program according to a Society of Human Resource Management study. The company cites recruitment advantage and increased employee loyalty for the program. They are hiring sales and logistics professionals.

 

[olivermsun]

Over half of education majors are underemployed. See: http://www3.forbes.com/leadership/17-college-majors-that-report-higher-underemployment/

Why invest in more education majors when it is reasonably anticipated more than half of them won't be full time teachers?

The same source also finds that 30% of doctors and 34% of Ph.D.s among respondents also felt underemployed. I didn't find the breakdown of, e.g., how many STEM Ph.D.s by major have full time scientist positions in their fields, but it would be interesting.

It makes more sense to match production with anticipated demand. Subsidizing production well in excess of demand is stupid.

Health care and criminal justice majors were also high on the list. The former might be anticipated to be increasingly in-demand. On the other hand, the latter were under demand in the recent past. Should the government try to forecast and control "production" of educated citizens as if they are an industrial product? Even if it could work, is that really what anyone wants?

 

[Dr. Courtney]

Should the government try to forecast and control "production" of educated citizens as if they are an industrial product? Even if it could work, is that really what anyone wants?

The government should let the free market be the free market. Students should be able to major in anything they want if they are paying for it themselves.

The question at hand is not government control, and it is dishonest to frame it that way. The question is what the government should subsidize through guaranteed loans and how much the government should be willing to lend based on the anticipated value of the degree. Lending over $100,000 for any and every degree with no more requirement than a 2.0 GPA is foolish, and it has resulted in many many students who cannot repay their loans or who are strapped for the first decade or two of their adult lives due to these large debts.

$30-40k makes a lot more sense as an upper debt limit for most students seeking degrees with track records of average earnings below $50k for the first decade after graduation. This is not an attempt of government to control production, it is just smart lending.

 

[olivermsun]

The government should let the free market be the free market.

As I pointed out earlier, the government already funds lots of things, e.g., in science R&D, that might not otherwise be funded by a free market. So if you agree that the government should pull out of these activities as well, then okay let's also talk about why higher education as a whole should operate as a "free market" (which it probably wouldn't do anyway, for a whole host of reasons). Otherwise, invoking the free market is a bit of a cop out.

Students should be able to major in anything they want if they are paying for it themselves.

Sure, but that raises the question of: What fraction of students are actually "paying for it themselves"?

The question at hand is not government control, and it is dishonest to frame it that way.

You yourself talked earlier about changing government higher ed lending to better match production to demand, so it seems a little dishonest for you to make it sound as if I'm reframing the question in some way. I am simply questioning whether the kind of government "intervention" you're describing can even work and whether it's really what we want as a society.

 

[WWGD]

I expect the minimum wage part of this thread to be split off, as there are at least three different threads going on.

A union is a labor cartel. It can increase wages (price) by reducing supply. As such, you can reduce unemployment or you can increase wages, but you can't do both simultaneously.

A union is one of the parts of a system of checks and balances. The idea is that no one group gains too much power over other groups.

 

[Vanadium 50]

A union is one of the parts of a system of checks and balances. The idea is that no one group gains too much power over other groups.

Nevertheless it can't simultaneously increase wages and employment.

 

[WWGD]

Nevertheless it can't simultaneously increase wages and employment.

Why not? If wages go up ( at the right level of income) , consumption goes up and so does employment with it. I mean, the two (wage increase and employment level) are not intrinsically contradictory to each other.

 

[Vanadium 50]

Supply and demand.

 

[WWGD]

Supply and demand.

Yes, higher wages will increase demand. There is plenty of pent-up demand at the lower-income levels , though not too much so at the higher ones ( since the latter already have most needs taken care of). People at lower levels must buy food, school supplies, must pay for car repairs, etc. When they don't have money, they cannot obviously pay for it, so the demand for a lot of these goods is pent up. Once they have the money, demand is " released" . A worker without money may have to wear shoes with holes in them until he makes enough to buy a new pair. EDIT: As this demand is "released", supply may go up, to satisfy increased demand, creating a multiplier. Obviously there are other factors involved, but this is part of it.

 

[russ_watters]

Once they have the money...

They won't "have the money" if they get fired.

 

[vela]

The government should let the free market be the free market. Students should be able to major in anything they want if they are paying for it themselves.

The question at hand is not government control, and it is dishonest to frame it that way. The question is what the government should subsidize through guaranteed loans and how much the government should be willing to lend based on the anticipated value of the degree. Lending over $100,000 for any and every degree with no more requirement than a 2.0 GPA is foolish, and it has resulted in many many students who cannot repay their loans or who are strapped for the first decade or two of their adult lives due to these large debts.

$30-40k makes a lot more sense as an upper debt limit for most students seeking degrees with track records of average earnings below $50k for the first decade after graduation. This is not an attempt of government to control production, it is just smart lending.

You can spin it any way you want, but the net effect of your proposal is the government picking winners and losers. Intent doesn't matter.

 

[symbolipoint]

I'm sorry but you cannot get a degree and think that means you're going to get a job. If you think that, you're a fool. Sorry, but it's true, there are so many factors involved in getting hired, personality is a large factor. I hate to say it but appearance is also a factor, I know that's unfair, but it's true. I don't mean so much physical attractiveness, although that can be part of it, but how you dress, I watched an interview of people in hiring positions and one woman said she based her hiring decisions on people's shoes. There are so many candidates for positions, employers can be that stupid and picky. Sad but true. If all else is equal, she liked your shoes more, so you got the job.

Using shoes as a way to decide is not a bad thing to do; just think about a bit...

 

[WWGD]

They won't "have the money" if they get fired.

Who/what guarantees they will get fired? This was, BTW, the intent behind GWB's tax breaks, to put money on people's pockets in order to allow them or make it easier to consume . Problem is it was aimed at those who already had most of their needs met. OF course, you don't do the raise abruptly, nor by an amount that is too large. By the same token, if people don't have money, they will not consume and the economy will remain down.

 

[russ_watters]

Who/what guarantees they will get fired?

The answer @Vanadium 50 gave you: supply and demand.

 

[WWGD]

The answer @Vanadium 50 gave you: supply and demand.

I addressed that in a previous post. Having more disposable income will increase demand and the market will increase supply to meet demand.

 

[Vanadium 50]

WWGD, at best you are making a macroeconomic argument, at worst you are denying a fundamental tenet of microeconomics.

If the former, this is an argument not for individual union membership or even individual unions, but an argument for massive unionization of the economy. As such, it doesn't really fit the topic, but in any event Russ is right. Union membership has fallen, and one reason for that is that there have been unions that have driven their companies into bankruptcy.

Just out of curiosity, have you ever been a member of a labor union? I have, and one thing I find interesting is that they tend to be viewed a lot better from the outside than the inside.

 

[russ_watters]

I addressed that in a previous post. Having more disposable income will increase demand and the market will increase supply to meet demand.

No, you didn't. You are assuming people won't get fired and will therefore have more disposable income and ignoring what supply and demand tells you must happen: some people must get fired or businesses will fail.

 

[WWGD]

No, you didn't. You are assuming people won't get fired and will therefore have more disposable income and ignoring what supply and demand tells you must happen: some people must get fired or businesses will fail.

Actually you seem to be assuming these businesses have zero margin and cannot handle a wage increase. It may be true in some cases, but not all, not for all amounts. There are additional savings by having a lower turnover when a worker has some basic stability s/he cannot have when s/he can barely afford food/transportation, etc. So it is not necessarily a zero sum. You may also have more loyal workers which results in increased productivity. Yes, supply and demand is one aspect to consider for sure, but not the only one.

 

[WWGD]

WWGD, at best you are making a macroeconomic argument, at worst you are denying a fundamental tenet of microeconomics.

If the former, this is an argument not for individual union membership or even individual unions, but an argument for massive unionization of the economy. As such, it doesn't really fit the topic, but in any event Russ is right. Union membership has fallen, and one reason for that is that there have been unions that have driven their companies into bankruptcy.

Just out of curiosity, have you ever been a member of a labor union? I have, and one thing I find interesting is that they tend to be viewed a lot better from the outside than the inside.

Yes, I have been a union member, but not of a very powerful union. And the problem is not necessarily with unions per se. They are part of a system of checks and balances. If the system is out of whack it is not necessarily the union's fault. And I believe many of the stories you refer to are accounted by one side, and not the union side. Unions have no interest in biting the hand that feeds them. Why would they willingly bankrupt the company that pays their salary? Yes, there are greedy idiots conducting union negotioations, but, then again, there are greedy idiots in every walk of life.