So Long, University Days of Wine and Roses
By Staff News & Analysis - April 05, 2013

Why a BA is Now a Ticket to A Job in a Coffee Shop …There's a growing perception out there that a college degree no longer delivers the value that it used to. Too many college kids are living in Mom's basement, or working at Starbucks. Like most personal finance columnists, I get the letters from them: what do I do? How do I fix this? For many, the answer is grad school. But I get the letters from grad students too. A while back, I found myself talking to a professor whose school has a number of impressive-sounding graduate programs that were originally conceived as add-ons for a professional degree in law or medicine or business. They are now attracting a number of students who just go for the standalone degree. He didn't understand what the career path was for these kids, and he wasn't sure that they did either. – Daily Beast

Dominant Social Theme: That college degree is worth millions.

Free-Market Analysis: But a degree is NOT … not anymore. With Western economies in collapse, it is probably wiser to gain a trade than a degree. People who realize this are sensible and tending to their futures in a manageable way.

Formal education at its higher levels is lifted from European universities that turned it into a kind of qualifying ritual. It didn't really make any difference whether you could speak Latin or Ancient Greek, but by doing so you signified that you were accepting the rituals of the society around you and wouldn't make trouble.

But these days trouble is all around us. The Internet in particular has debunked a good deal of the common wisdom that might be received in colleges and universities – and this is especially true when it comes to economics and money, the lynchpins of modern society.

You are certainly not learning the "truth" in college and many of the jobs and professions you might seek to gain are actually the ephemera of a larger bubble economy. Such insights of course make people's heads hurt. Much easier simply to spend big bucks on college because that is the Modern Way. Here's more from the article:

The phenomenon is all too real. Skilled workers with higher degrees are increasingly ending up in lower-skilled jobs that don't really require a degree – and in the process, they're pushing unskilled workers out of the labor force altogether …

The authors think they have an explanation: during the great IT boom, the returns to cognitive skill rose. Since then, the process has gone into reverse: demand for cognitive tasks is falling. Perhaps this is because installing robots consumes more resources than maintaining them, or perhaps it's simply that the robots are doing an increasing number of those cognitive tasks. But whatever the reason, we no longer want or need so many skilled workers doing non-routine tasks with a big analytical component. The workers who can't get those jobs are taking less skilled ones. The lowest-skilled workers are dropping out entirely, many of them probably ending up on disability.

This is, of course, highly speculative: it's one paper. But it would explain a lot. Six months ago, I made quite a splash with a Newsweek story arguing that we may be overinvesting in college. There were basically three parts to this argument: first, that a lot of college attendance is signalling activity rather than skill acquisition; second, that more students with BAs are ending up in jobs that don't require them; and third, that a substantial number of kids don't finish, washing out with a lot of debt and no commensurate earning power to pay it.

Actually, this is a pretty good analysis so far as it goes, but to our pointy heads it doesn't go far enough. Begin again with the notion (as we have long pointed out) that the past century is a monetary one in which central banks have stimulated mightily and endlessly, creating entire industries that then vanish when the inevitable bust follows the boom.

We'll restrict our analysis to the US since the article is aimed at US higher education. The IT industry of the 2000s, the US auto industry in Detroit, the garment industry in long ago New England – each of these industries had their heyday and then were destroyed – not in great gouts of Schumpterian creative destruction but because of a much more mundane reason: the central banking boom of the day collapsed into a bust.

This is just plain difficult to comprehend. You mean my profession – architecture, psychology, advertising – is the product of economic forces more than inherent demand?

Yes, that's exactly right. Today in China a great boom has created hundreds of millions of jobs, but we will see how long those jobs last or how many are left once the boom subsides. Japanese salarymen were the unwitting and unfortunate recipients of just such a situation in the 1990s when the real estate bubble collapsed.

For one reason or another, we have a feeling that US and European economies are not going to return to the "mean" of 20th century employment any time soon. The kind of employment stimulation offered by the great engine of monetary growth is sputtering – and taking with it the hopes and dreams of millions who believed their birthright was a sophisticated urban job in a non-menial setting.

Face the reality of education: It was never about information initially. It was a qualifying even for the upper class. Later on in the US especially it became a rite of passage to various concocted professions that would not ever have been imagined in a less perfervid monetary environment.

After Thoughts

Find a trade or build your own profession based on market niches that are not easily visible. And good luck.

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