The assumptions are 1) that students who graduate from college have increased potential for economic mobility, and 2) the more students who earn college degrees, the more our economy will grow. But are either of those assumptions still true, in light of our new economic reality? Or are we wasting money investing in a sector that's producing thousands of janitors with Ph.D.s?
One thing's for sure: our higher education system has produced thousands of janitors with Ph.D.s or other professional degrees -- about 5,057 of them, in fact, plus more than 8,000 waiters and waitresses. When you look at all college degrees, there are more than 317,000 over-educated Americans serving us our meals, more than 80,000 shaking our martinis and some 62,000 mowing our lawns.
In all, about 17 million people in this country have completed college only to end up working jobs that require a skill level below that of a bachelors degree, according to the Bureau of Labor Statistics.
Richard Vedder of the Chronicle of Higher Education argues that this is one sign the U.S. has over-invested in higher education. He points to a new National Bureau of Economic Research report written by three acclaimed economists, which concludes, "In general, marginal and average returns to college are not the same." In layman's terms, that means that even if our investment in higher education is yielding a decent return on average, efforts to build on that investment might yield a less-good return. Or, even more simply put, there is a point of diminishing returns in higher education. And, according to these indicators at least, we appear to have reached it.
Over at the blog for the Center for College Affordability and Productivity, Christopher Matgouranis makes a similar argument, noting that the 4.4% unemployment rate for college grads may be better than the abysmal national rate (9.6%), but still suggests that a bachelor's degree is no longer "a guaranteed path to a cushy middle class life-style."
When considering public policy aimed at increasing the percentage of college graduates in the labor force, it must be an imperative to consider what these people will be doing after graduation. Is it socially responsible for us to encourage individuals to enroll in college and accumulate massive debt when the benefits are becoming increasingly uncertain? I think not. An increase in the overall percentage of college graduates will just see that more will end up underemployed (or unemployed altogether).
Encouraging students to go to college regardless of their skill level or inclination and with dwindling potential for economic benefit can lead to "credential inflation" -- the phenomenon whereby college degrees are "watered down" and employers start requiring a degree for jobs that do not warrant one. (Despite what some employment ads suggest, you probably do not need a college degree to answer a phone, or to build cabinets.)
An obvious solution is to the invest a greater percentage of our resources in vocational and other professional certification programs, which would cost less for both students and the government and could produce people who are more appropriately trained for the careers they want to and/or will pursue.
On the other hand, it could be that there's nothing wrong with encouraging young Americans to pursue degrees as long as we can ensure that they'll receive a high-quality education. After all, students go to college for more than just career training -- they also go to expand their minds, find their place in the world, meet new people and, quite often, to grow up a bit before entering the workforce. And there's nothing wrong with that, per se.
But either way, the blind assumption that dumping more money into the higher education sector will lead to certain economic gains is naïve, if not irresponsible, and requires a deeper look.
