A college education guarantees nothing

Joseph Kukral, Op/Ed Editor

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ntly been described as a practical opportunity for Americans to attain a higher level of skill and livelihood; however, a careful study of the facts can liken that reality to a fantasy. Despite the documented increases of wealth a college education can provide to an individual prescient enough to pursue one, there is now evidence that the excessive costs of a higher education can erase the benefits of obtaining one.

As it currently stands, outstanding student loan debt nationwide totals $1.49 trillion, which is a staggering and quite risky investment for students if the payback is less than commensurate. When analyzing data collected from 1990 to 2012 published by the Federal Reserve Bank of New York, one can surmise the impending struggles and economic distresses some could experience after entering the workforce.

College graduates between the ages of 22 and 27 suffered an unemployment rate of 7 percent in 2012 verses 3.8 percent in 1990. In addition, for those in 2012 just graduating from college and in their first year in the workforce, the unemployment rate ballooned to 10 percent (a recession-like unemployment rate) from 4 percent in 1990. Evidently, the transition into the labor force has become far more challenging for highly skilled millennial workers.

Furthermore, the challenge does not stop there. Even if recent college graduates engage in some form of work and are not unemployed, the increasing rate at which those engaged in work are underemployed is also alarming. Being underemployed, these graduates are working in jobs that do not require a college education, which renders the entire monetary investment made by the country, parents and the graduates themselves regrettably wasteful.

In 2000, roughly 40 percent of newly minted college graduates who engaged in some form of work were underemployed; however, by age 30, once these graduates became situated in the labor force, the rate declined to 33 percent. Comparatively, 12 years later, 56 percent of newly minted college graduates that engaged in some form of work were underemployed, indicating the former rate nearly doubled. Of the 56 percent underemployed, an increasing portion of these graduates are working low-wage jobs as baristas, bartenders and retail clerks, earning less than $25,000 annually (poverty level of a four person family) while those lucky enough to command higher salaries at good non-college jobs are finding such opportunities shrinking at an astronomical rate.

The ultimate conclusion? The value accorded by a college education is diminishing in the face of high, unsustainable debt in addition to the fact that many skills derived from completing a college education are plainly unmarketable.

The question that one must ask is why are these trends occuring? Assuredly, the Great Recession, which spanned from late 2007 to June of 2009, contributed to a poor labor market; however, the reality presented by these Federal Reserve studies suggests these issues transcend the effects of the Recession.

The problem is caused by a combination of factors, some of which may be viewed as adverse, but they are reality nonetheless. These include globalization, automation and the resurgence of a hyper-meritocracy of workers.

Globalization is inevitable and, in accordance with the enlightened views of most economists, is a good thing. However, it engenders intensive competition globally for productive and well-paying non-college jobs, thus explaining why so many underemployed college graduates are left to work at low-wage, low-skilled jobs. In a similar vein, automation has replaced once highly valued and well paid manual labor. In effect, both of these economic trends have squeezed the value and earnings out of well-paid non-college jobs over the past two decades, forcing more individuals to pursue higher education in hopes of obtaining something lucrative.

The Federal Reserve study indicates that at the current rate of graduate underemployment, a college education, on average, may only increase wages modestly over one’s lifetime; however, those who pursue majors in engineering, health, computer software, finance and math will receive a substantial amount of the total economic gains and payout as a result of going to college. This suggests the payout for all other majors is diminutive in comparison. This is what leads to a hyper-meritocratic elite: Only the smartest and most exceptional of students can pursue these difficult majors and thus receive the massive payout, while everyone else picks something they hope they can achieve in, let alone use to get a decent-paying job. Essentially, college is not guaranteeing windfall returns for everyone, only a select few, while a great many are working near minimum-wage jobs following graduation. In short, the economy handsomely rewards the skills of the crème de la crème, while it regretfully neglects those of nearly everyone else.