The recent debate on the value of higher education has been centered around the question, Is college worth it? The problem with the way this question has been addressed in our national discussion is that we may be asking the wrong question, or questions.
Daniel Indiviglio, a former investment banker and consultant, now writing for the Atlantic, nicely points out that part of the debate isn’t as much a debate as it is a simultaneous discussion of two related concerns. Really, there are two separate questions being addressed: 1.) Are college degrees valuable? and 2.)“Should college degrees be as important in the economy today?”
As to the first question, whether a college degree is valuable, Indiviglio says: “These days, getting a college degree is a pretty good idea. Indeed, if you're someone who can get into college, going is practically a no-brainer.”
A lot of research has been done on the returns to educational investments. Most recently, the Hamilton Project at Brookings, showed that despite the hefty initial investment, the average worker with a college diploma consistently earns more money than an equal-aged worker with only a high school diploma. And the gap in earning power only grows wider with age, shrinking only well into a person’s 50s. More shockingly: “The average college graduate will surpass the highest earnings of the average high school graduate soon after graduating.”
The Atlantic’s Derek Thompson also amassed a series of graphics that further gird the importance of education in more than just financial terms:
The higher level of educational attainment, the lower your chances of unemployment.
More education = higher hourly wages
White-collar jobs have grown faster than middle-skill-level jobs the last three decades
Jobs requiring masters, professional, associate degrees will grow twice as fast as overall job market
So, yes, a college degree makes a difference. A master’s degree makes a difference. A PhD, depending on the field, makes a difference. But saying that a college degree is valuable is not the same as saying that it should be valuable, says Indiviglio. This is where the college-is-a-bubble talk comes in:
Imagine if employers, no matter what business they're in, begin believing that college degrees are incredibly valuable. Careers that traditionally favored college degrees now consider them mandatory and some that never sought a degree suddenly begin seeking college grads. That leads young adults to see a college education as more and more vital, as they want to be competitive in the labor market. So as the asset's cost rises, they take on more and more student loan debt to ensure they get a degree, through ultra-cheap government-guaranteed financing.
Of course, the latter story has not yet come to an ugly end, like the housing bubble did. But some people believe there's an education bubble being inflated.
As a result, a college degree, comes dangerously close to being reduced to a signaling device to employers in lieu of an IQ test, and college admissions a sorting mechanism. What happens within that four-year span, between admission and graduation, has, arguably, diminishing relevance as part of the career formula.
What we are left with is a fleet of “over-educated” receptionists, customer service reps, bartenders, waiters. Almost 30 percent of flight attendants have a college degree, according to the BLS. Among baggage porters and bellhops, 17 percent. So, while it’s true that a cashier with a college degree earns more money than one without, that doesn’t necessarily mean that a cashier should have a college degree.
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