The depressing economic reality for college graduates

The small-sized university where I teach recently introduced a major in gerontology.  Introducing a new major (and a minor too) has also been accompanied by long-term investments in terms of tenure-track faculty.

Yes, society will have to increasingly deal with various issues related to the elderly.  The question that we could ask from a public policy perspective is this: could we have prepared students for gerontology-related careers without this degree program/minor?  For an entry-level job in this field, will it really matter if the undergraduate major is in psychology or sociology or biology or English literature?

We never had these kind of discussions on campus.  I suspect it is a similar story at other universities too.  It is unfortunate that these discussions do not happen because of what these decisions mean:

• long-term investments and commitments are being made, for which benefits seem to be way to low
• the costs are being borne by taxpayers and students, who are already being sucked dry
• students are misled into believing that pursuing one liberal arts major versus another is better for jobs in that major
• a further dilution of higher liberal education

The proliferation of undergraduate majors and minors is a vastly under-reported aspect of higher education.  There is a world of a difference between researchers specializing in a narrowly defined subtopic versus a narrow major like gerontology.  Narrow focus ought to come later in graduate schooling, not at the undergrad level.  Even medical school is post-undergrad, and yet we want to invest in "gerontology?"  Of course, gerontology is merely an example.  Numerous other similar programs have been initiated over the past few years.  Works well for marketing purposes, I would imagine!

In any case, students majoring in gerontology are going to face a future that will be no different from the future that awaits students majoring in geography or English literature or business: a bleak one.

Over to Mike Mandel on what the trends have been:
 

Imagine showing every college freshman these charts.  Wouldn't that be full disclosure?  In fact, shouldn't we demand such full disclosure?  At least from taxpayer supported colleges and universities?

The typical explanation is that college graduates fare better than those without degrees.  There are huge problems with such statements.  Instead of me pointing them out from my own posts, here is from a recent Cato report:

There are numerous problems, however, with simply concluding that because enrollment, degree attainment, and the college wage premium all rose along with spending, spending increases were good investments. The first is that in looking at averages one can miss a lot of data, and many people with college degrees might not get much economic value from them. The second is that we might be fueling credential inflation, in which the difference between earnings for people with a bachelor’s degree and those with only a high school education are large not because one attains valuable skills pursuing a degree, but because degrees are so commonplace—and perhaps signal some basic threshold level of intelligence and work habits—that employers reflexively screen out job seekers without degrees. Finally, there are very large percentages of people who enroll in college, perhaps lured by the promise of government aid to pay for it, who do not end up getting degrees. Their payoff is often small or negative.

Tyler Cowen offers another take:

Non-college grads also have seen declining wages, and so one can look at the “finish college vs. finish high school only” margin and conclude that the return to higher education is robust.  Another approach is to look at the “finish college and get on a real career track” vs. “finish college and hang out” margin and conclude the sector is in trouble, which indeed is the case.  Don’t get stuck looking at the old margins only, the new and powerful margin, I am sorry to say, is relative to unemployment or extreme underemployment.  The status and avoid-shame returns are high enough to keep a lot of people going to college, at current prices, but the falling real wages for graduates aren’t going to sustain an enormous amount of extra sectoral growth, including on the price side.  Nor do I expect the preceding orgy of student debt to repeated, at that level, anytime soon.

All these mean that President Obama dusting off the student loan problems through an executive order will not do a damn thing for students because they are looking at very low returns, assuming they will find jobs, on their huge undergraduate investment dollars.

Increasingly, I feel terribly guilty that I am being a part of the problem by taking money from the unsuspecting students.  But then, if ever they make the mistake of coming to me for advice, I take the time to present them the larger picture and, therefore, how they need to systematically plan for their academic and employment lives.  Some of them never come back to my office though!

But then some read my blog, which means I am reaching an audience and being a part of the solution too.