Thursday, June 15, 2017

The higher education bubble is destroying U.S. labor markets

In 2014, only 36 percent of jobs available — 54.8 million — required some college, a postsecondary nondegree award, a Bachelor’s degree or more at the entry level according to data compiled by the Bureau of Labor Statistics.

Yet at the same time, today, 61 percent of the civilian population aged 25 and over has some college, a Bachelor’s degree or more, accounting for 131.4 million people. That accounts for approximately 76.6 million Americans who might have been better off financially not incurring any student loan debt and entering the labor force much sooner.

The overwhelming incentive is for younger people to go to college to improve their job prospects thanks to the massive misallocation of hundreds of billions of dollars of federally subsidized grants and loans for higher education.

Yet, despite all the subsidies, shortfalls are found throughout labor markets, whether that be in the medical and health care professions, STEM, railroad engineers, electricians, occupational therapists or machinists.

This week, the White House is promoting Workforce Development Week with major job retraining initiatives being promoted by the Department of Labor. Obviously, many factors play into Americans not being properly trained to perform the jobs actually available in the economy.

To the extent the Trump administration recognizes the need for non-college job training — a substantial majority of jobs do not require college — with the White House’s calls for private sector-based apprenticeship programs, they are to be praised.

Yet, the elephant in the room remains education. Overall, we’re still peddling the fiction that a college education is for everyone and pushing millions of our brightest into an environment not conducive for producing as many good paying jobs per capita as prior generations.

The reason is our higher education system does not — and cannot, by design — efficiently marshal resources to produce the laborers our economy needs.

We’re just throwing hundreds of billions of dollars of subsidies at the higher education wall and watching in slow motion as the catastrophe unfolds.

Last month, Gross Domestic Product (GDP) for the first quarter of 2017 was revised upward to 1.2 percent according to the Bureau of Economic Analysis. It originally came in at 0.7 percent, but even with the upward revision, that stinks, and was certainly not good news to the Trump administration.

Particularly, because without robust economic growth, it will be hard or impossible to create the amount of jobs needed to truly get Americans back to work. And we know that because we just came off the worst decade for economic growth in U.S. history since GDP was invented.

Since the height of the U.S. economy in the late 1990s, with the popping of the dotcom and real estate bubbles in the years since, there has been a huge hit to labor markets, particularly in the working age population of 16 to 64.

Since 1997, the employment-population ratio of 16-64 year olds has dropped, from 73.5 percent to 69.9 percent, accounting for 7.5 million Americans who would have jobs had the rate remained the same.

An additional 8.5 million would be counted as unemployed, bringing the total to more than 15 million rather than the reported 6.9 million had labor participation remained the same, a 9.4 percent unemployment rate instead of the misleading 4.3 percent rate we see today.

When comparatively fewer working age Americans are neither working nor looking for work, while there are simultaneously still job shortages in certain professions as Baby Boomers retire, the reason is because there are quantitatively fewer jobs available per capita and at the same time, we are training an entire generation of Americans for the wrong jobs.

We’re overeducated and underemployed.

Coupled with the continued offshoring of American jobs away from manufacturing, despite all of the education subsidies, labor markets have not adjusted to provide jobs that require all those college degrees we’re producing. Yet the shift the economy has experienced the past two decades away from is undeniable.

President Donald Trump is well aware of these challenges. That is why he campaigned on bringing those jobs back to America — and why he reminded Americans in 2016 that the unemployment rate vastly understates the dire nature of U.S. labor markets.

A lot can collapse in just 20 years. After two successive, failed administrations that have not incentivized doing business in the U.S. all the while pushing the Millennials generation into the overfunded university system, the current states of the U.S. economy and labor markets speak for themselves. Millennials were betrayed by these false promises.

To prevent the same thing from happening to the next generation, the emphasis must now shift, and dramatically. These older institutions must be shattered. The tax dollars currently dedicated to higher education funds should dramatically cut, allowing private markets and institutions to fill in the education and training gaps needed in labor markets as they once did.

When you subsidize everything, you do not incentivize anything. It is good that we are talking about the skills gap in the U.S. labor force, but a discussion on workforce revitalization without looking at the ongoing, utter waste in the higher education system is a joke.


Some ideas for educational reform from a moderate British Leftist

Rhiannon Lucy Cosslett

It’s only after you have left school and, in adulthood, gained a bit of distance, that you can be fully aware of the gaps in your education. History is a prime example. A group of British people together around a pub table and can probably weave together some kind of cohesive narrative across the centuries. In isolation, however, what you discover is that one person did the Romans, another the second world war, and a third spent two years on medieval crop rotation. Meaning that as a school leaver, you’ll have a vague idea about how it all fits together, but whole epochs remain shrouded in mystery.

That’s not to say that we should return to rote learning in the kind of system envisaged by Michael Gove. An ability to memorise dates informs little about the intellectual potential of any pupil. It just tells us that they are good at retaining information. But what the history problem does illustrate is that what you learn at school is entirely dependent on where you end up, how good your teachers are, which exam board they are using, and whether your school is well funded or deprived and stretched for resources.

In an ideal world the education system would be radically overhauled, to deliver a truly national curriculum; where a child in one county has as much right to learn Spanish as a child in another. Options would not be closed off simply because of the catchment area. Furthermore an interest in, say, drama, would not preclude a pupil from also studying geography. A greater portfolio of core subjects would not only be available, but would also prevent pupils from being forced to narrow down their options at an age when they don’t yet know who they really are.

As with the French baccalaureate, they would have a range of subjects to choose from based on their strengths, but they would also be required to study a number of key subjects regardless of chosen streams. French students are able to choose from a range of living European languages, regional languages and others such as ancient Greek or Latin. Such options are rarely available to children at state school in Britain.

I would introduce a mandatory reading scheme, where older children spend time each week reading with the 11-year-olds who have just started secondary education. We did this at my school in an attempt to improve literacy and it was a great initiative, helping children grow in confidence. I would also reintroduce the books Gove dispensed with, such as To Kill a Mockingbird and Of Mice and Men – books that teach the importance of kindness and tolerance. English would have more of an emphasis on diverse voices and more modern literature.

In science, there would be more practical work (a 2017 Wellcome Trust report found that pupils in deprived areas were much less likely to report having designed and carried out their own experiments), more trips to science museums, and a thorough teaching of evolution. Girls would be encouraged to pursue Stem (science, technology, engineering and maths) subjects. Maths would have more of a practical focus on practical applications, such as interest rates on credit cards. Adult skills, as part of an improved personal, social, health and economic (PSHE) curriculum, would teach the ins and outs of a consumer credit agreement, how to do a tax return without having a nervous breakdown, and the implications of credit card debt.

Information technology would be integrated across most subject areas, and pupils would be taught to code. There would be a range of practical workshops in plumbing (everyone should know how to unblock a toilet), design and technology, woodwork, and art and graphics.

The Conservatives may have finally yielded on the need for compulsory sex and relationships education – and it is essential – but pupils deserve more than just the mechanics. SRE would include sexual consent and the importance of respecting boundaries; contraceptive options; domestic violence and what a healthy relationship looks like; female genital mutilation; child marriage; LGBT issues; the importance of female pleasure; and all the technological advances with which young people are grappling, such as sexting, social media and pornography. It would follow on naturally from the foundations laid in primary school, with pupils from the age of four onwards receiving age-appropriate relationship education, as in the Netherlands – where this contributes to the very low teenage pregnancy rate.
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My revamped PSHE would emphasise the need to support those with poor mental health, and would encourage boys to feel able to express their emotions in a non-judgmental space. Because eating disorders, gym addiction and steroid abuse still loom large for many teenagers, body image would be a discussion topic for both sexes, including airbrushing and the role of social media in forming perceptions of what a desirable body looks like. PSHE would also include more cookery and nutrition classes.

In this age of soaring teenage obesity, teaching pupils how to cook from scratch and how to have a healthy diet is a matter of urgency. This would take place in combination with expanded PE classes – without such an emphasis on team sports (those of us who regularly caught the ball with our faces still wince at the memory of hockey, netball or football) and dreaded cross-country. Dance, swimming, yoga, climbing and high-intensity interval training would also feature. In addition, pupils would be encouraged to spend more time outdoors, and there would be greater collaboration with organisations such as forest schools.

Young people have felt alienated from party politics for too long. Jeremy Corbyn may have reversed that trend, and those of us who work or have worked with young people knew that alienation was not about apathy or lacking passion; young people just felt that institutions of power didn’t have anything to offer them.

Politics and citizenship classes could of course teach the mechanics of power – how laws are made, what first-past-the-post entails, how the justice system works – but it would also teach activism. The aim would be to get pupils discussing the things that matter to them – sexism, racism, homophobia, housing, poverty, the environment – and examine why it is that their voices are so often ignored. There would be an in-built understanding of privilege and social mobility, and pupils would be encouraged to make themselves heard by writing to their MPs, composing speeches, launching their own campaigns and undertaking volunteer work.

The focus of any curriculum should not simply be on attainment and “resilience” – the current buzzword – but on producing confident, well-rounded citizens who feel as though they belong and have value in society. As in France, students would study philosophy, allowing them to enter work or higher education (if they chose to do so) with the ability to construct an argument logically, and critically examine the media that they are presented with (so thatattempts to manipulate voters – on the basis of fear of immigration, say – will fall flat).


Australia: Elite schools set to lose under new Federal funding scheme

Government schools in Australia get most of their funding from State governments so are only marginally affected by the changes.  While Americans dream about vouchers, private schools in Australia get substantial direct funding from the Federal government, which helps explain why 40% of Australian teenagers go to private schools

More than 100 prestigious private schools will receive less federal funding as part of Malcolm Turnbull’s education reforms, including the Sydney institutions of Cranbrook, Ascham, Kambala and the Kincoppal-Rose Bay School in the Prime Minister’s electorate.

Under the government’s $18.6 billion changes, 344 schools will lose funding under Gonski 2.0 compared to Labor’s existing model. This includes 24 previously identified independent schools, 27 Catholic systemic schools in the ACT, 151 government schools in the Northern Territory, and 142 non-government schools.

The Greens are calling on the Coalition to ensure the NT does not go backwards, while the ­government has dedicated $69 million over the decade to help the state adjust to the new ­arrangements.

Using Education Department data tabled in the Senate, The Australian can today reveal the so-called "hit list" of independent schools to receive less money under the government’s proposed measures than they would under Labor.

The schools — which will only be affected if the reforms to eliminate 27 "special deals" win Senate backing — include those where parents do the heavy lifting with fees, such as the Prime Minister’s alma mater, Sydney Grammar School.

Under the changes, Saint ­Ignatius’ College, Riverview — the alma mater of Deputy Prime Minister Barnaby Joyce and former prime minister Tony Abbott — will receive $3475 a student in federal funding next year, and $3979 at the end of the decade.

But some school leaders have praised the reforms, including Perth’s Presbyterian Ladies’ College deputy principal Andrew Cousins, who welcomed the prospect of a more equitable funding system. The federal per-student amount will be $3010 next year to $3990 in 2027. "Fundamentally the deals which have been done with the various states and the Catholic education system have led to great inequities in schools throughout Australia," principal Kate Hadwen said. "The more special deals we can eliminate the better. A child’s education should never be dependent upon a sector’s lobbying abilities."

Funding for the 142 independent schools does not go backwards at the end of the decade, unlike the previously identified 24 elite schools. But the 142 independent schools do experience a slower annual growth rate in their funding, receiving an annual ­indexation rate below 3.56 per cent for the first four years of the changes. The Australian has identified 103 of the 142 schools, and most of the remainder are ­believed to be Catholic systemic schools which are funded as part of a system.

The Gonski 2.0 changes are designed to fund all schools based on the same formula. Non-government schools will receive 80 per cent of their funding entitlement — called the Schooling Resource Standard (SRS) — from the federal government by 2027. State schools would receive 20 per cent. Under the changes, NT would receive 24.4 per cent of its SRS from federal funding this year.

Greens education spokeswoman Sarah Hanson-Young said: "Public schools perform an extraordinary service to struggling communities across the Northern Territory and their funding should not be allowed to go backwards. I call on the government to take some of the money that was going to wealthy private schools under Labor and use that to guarantee that current funding to NT public schools will be maintained and increased annually in line with indexation."

Labor’s Tanya Plibersek said the policy was a "fraud" but Education Minister Simon Birmingham said: "Funding for government schools in the Northern Territory will increase by $39m over the next four years and almost $69m over 10 years."

The National Catholic Education Commission argues that 619 of its systemic schools receive less money next year compared with this year.

The independent Schools Council of Australia believes 400 of its schools will feel the effect of the changes, and executive director Colette Colman said it was "not realistic for the independent sector to call for a level playing field for funding for all non-­government schools and not ­accept the impact of the changes on independent schools".

Australian Association of Christian Schools executive officer Martin Hanscamp supports the changes because they provide fairness, "despite having schools that will receive reduced funding than what they would if it’s status quo … AACS encourages the Greens to get behind this pivotal legislation possibly through negotiating for a quicker transition for ‘needy’ schools and an independent review body, worthy amendments in AACS’s view" .

Bill Rusin, principal of Covenant Christian School in the Sydney suburb of Belrose, one of the 24 independent schools that go backwards, said "for us, we were a little surprised we were going to be almost the worst hit of all the surrounding schools.

"We don’t want to cry poor-mouth. We will survive but we want them to look at the algorithm that they used to calculate the capacity to pay.”

A Senate inquiry report is due today on the changes. Nick Xenophon yesterday said he would like to "think that with some sensible compromises" the government’s legislation could pass the Senate.


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