Sunday, September 03, 2017

What Does a College Degree Get You?

by George N Romey

Mr Romey is right. A college degree is a bad move for most people these days and a VERY bad move if you have to go into debt to get it. Even if you have a kindly father who pays your fees it is not necessarily a good move.  It means that you are out of the workforce for four years when you could have been earning money.

The obvious alternative is taking a trade apprenticeship. Plumbers and electricians are an aristocracy of labour and are usually among the high earners. But what say you are either clumsy or a bit of a snob so don't want a trade?  What then?

There is a way forward but you have to be interested in SOMETHING.  You go online and talk to people who do that thing  until you know a heap about it.  There are even MOOCs (online courses) that tell you university level stuff about various subjects.  Maybe take one of them.  You then apply for jobs in that field.  If you show that you really know your stuff without having studied it formally that will really impress a lot of employers.  Employers value keen-ness much more than a bit of paper. 

And if you are looking at government employment, cover yourself by investing in a diploma mill degree.  Bureaucrats don't give a damn so will probably give it a quick glance and tick the relevant box that says you are qualified.  They mightn't even want to see it at all.

But whatever you do, you must learn frugality if you want to have an easy life ahead of you.  You have porridge for breakfast instead of bacon & eggs, for instance.  I myself lived on tiny amounts of money when I was young and always had savings.  Now that I am well established I can have whatever I want.  And if you think you can get rich by spending a significant slice of your income on beer and cigarettes (to say nothing of drugs) you haven't got a clue.

So the options for the average person today are actually more limited than they once were. In my day, kids worked their way through college (I did), hopefully with a bit of support from scholarships, bursaries etc.  Nowadays, though, fees have become so expensive that kids from most families can't make that work -- unless Dad can chip in too.

So why is that?  Why have options become worse?  It is because of credentialism.  The formal requirements for most jobs have been jacked up beyong all reason.  To become a teacher in the old days, for instance, you just did a one-year apprenticeship and then taught stuff you were good at.  Now you have to have a 4 year degree.  So there is now a HUGE DEMAND for college courses.  And what happens when demand rises?  Prices rise.  That relationship is as old as the hills.

But, as I say, you can circumvent the blockages just by knowing your stuff  -- maybe with the help of a diploma mill degree. Twice in my life I got jobs for which I had no formal qualifications.

My son spent 8 years in the university system studying mathematics but got nowhere.  He didn't have the stellar ability that you need to get far in that field.  So he did a one year course in computer programming and is now a high earner.  He does sometimes think of what might have been if he had gone  into IT straight out of high school.

In a recent presentation on Youtube by economists Richard D Wolff he discussed a new Amazon warehouse that opened in Northern Massachusetts with financing and tax breaks from the state and with great fanfare.  The warehouse mostly automated had openings for jobs paying from $12 an hour to $14.75 an hour.  All of the jobs were 30 hours or less a week (presumably to avoid providing healthcare.)

The jobs on the upper end were team leader jobs that required a college degree.  So the college graduate likely with thousands in student loan and credit card debt was looking at about $23K a year.  Needless to say this would likely prohibit independent living unless there was a spouse making at least that if not more.

Unfortunately the jobs at the Amazon warehouse are representational of most jobs today.  Let's say we have two college graduates either living together or married working at Amazon.  Out of their $46K a year they will pay FICA, state taxes and possibly a local tax.  They will have rent (in Northern MA it runs about $1K a month for a one bedroom apartment), utilities, at least one car payment, student loan and credit card debt incurred while going to school and healthcare insurance not provided by Amazon.  Add into the mix gas, food and other expenses and you quickly see two people that probably don't have $100 sitting in a savings account.  One incident away from financial disaster.

If you want to understand our economy here is a hypothetical example based on a real world job.  Mr. Bezos made of billions and collects companies like some people collect antiques.  What's he going to do for customers when the bulk of Americans are finally squeezed into his type of employment?  Will the robots at Amazon Prime sit rusting waiting for orders that are now longer coming?

When I graduated from college in 1981 I started in banking a princely sum of $11K a year, probably adjusted for inflation close to $23K a year now.  Of course I had fully paid medical, dental vision, pension, paid time off and short term disability which would cover a full paycheck for up to 60 days.  Within 3 years with the same employer I was up to $25K a year.  Do you think Mr. Bezo's $14.75 an hour employees will more than double their pay within three years?  Likely not.


The higher ed bubble is bursting as vocational training gets a boost

For years, the message was to go to college. A college degree became essential for nearly any job and American youth have flocked into Universities at higher rates than ever before. But mounting debt and the struggle to find jobs has created a bubble that is ready to burst. Now, some states are starting to expand programs which promote vocational training and trade jobs, rather than sending everyone to college.

Millennials are the most college educated generation, but at the same time are finding themselves unable to enter the labor force. The value of a college degree has dropped substantial due to increased enrollment, while tuition soars alongside attendance. Graduates are finding themselves with an invaluable degree, mounds of debt, and an inability to find a job.

This bubble has finally burst.

In states like Iowa, more than half of the available jobs are middle skilled jobs requiring some form of vocational training, or jobs which require more than a high school degree but less than a four-year college degree. Students entering college, rather than these careers have caused a skills gap across industries in the state’s labor force.

To meet labor force demands, The Houston Chronicle of Aug. 2017 explains, “More K-12 schools and Iowa companies are partnering to add and expand skilled-trades programs; from creating the Skilled Trades Academy in Des Moines to a pre-apprenticeship program in Boone that can reduce the amount of time it takes a student to complete a traditional apprenticeship.”

By instituting vocational programs and skills based training programs, states like Iowa are fighting to combat the growth of universities and provide students with additional options.

This has been a trend across state lines, California is now spending $6 million on a campaign to revive the reputation of vocational education, and $200 million to improve vocational programs directly.

This reputation revival is necessary, since vocational and trade based education has dramatically altered from its original scope. Judy Bass explained in Education Dive, that initially trade education remained focused in industries such as automotive, construction, and graphics; but today, skills training focus on engineering, robotics, telecommunications and fiber optics, criminal justice, biotechnology and computer technology. Even in the automotive industry, students receive training on up to date technology that can serve them across fields.

The United States should be training our children for jobs they can receive, not leading them to debt they cannot afford, because the reality is not everyone should go to college or even needs to. There are many students who can attend trade schools to learn skills that can support their lives immediately.

This would prevent students from simply wasting their degree, but rather putting the skills they learn to good use.

Bloomberg’s Richard Vedder writes, “The number of college graduates far exceeds the growth in the number of technical, managerial, and professional jobs where graduates traditionally have gravitated… [W]e have a new phenomenon: underemployed college graduates doing jobs historically performed by those with much less education. We have, for example, more than 100,000 janitors with college degrees, and 16,000 degree-holding parking lot attendants.”

States must combat this dilemma before labor forces collapse and graduates continue to accrue unpayable debt. Trade and vocational schools present the unique opportunity to get ahead of this problem. As always, expectations must be managed accordingly. The message should not simply be go to college but go somewhere that gives you a future.


Australian School sparks controversy with Donald Trump parody production

A PRIMARY school has come under fire for a politically-charged play that converts a theatre classic into a production about US president Donald Trump, a wall and taco-making immigrants.

The play — a take on Gilbert and Sullivan’s The Mikado — has sparked complaints to the Village School in Croydon North.

The Herald Sun understands parents have pulled their children from the production and the school altogether.

Principal Tanya Heine rewrote the opera classic to include a malevolent King Trumpet whose “attitude’s queer and quaint, his edicts will make you faint”.

It includes Elsewhegians, who wear ponchos and sombreros, work all day for little pay and sing about stimulating the economy by selling tacos.

They plot to blow up a wall that separates their country from the land of Trump Dee Doo.

The script, seen by the Herald Sun, also references America’s gun crime, a security guard named Agent Orange and characters Abbot Me-Too and Trumble-Dum.

A Poor Patrol roams the streets and threatens Elsewhegians that “if you don’t (work faster) I’ll use my blaster”.

One concerned parent said the whole-school play was completely inappropriate for children as young as five.

“It has crossed a few lines but the principal is not backing down,” the parent said.

“There’s even been talk of painting the Trump Dee Dooians — the Americans — in orange face paint.

“If we were doing Obama characters we wouldn’t do black face.”

The play ends with the bomb plot thwarted and the Trump Dee Dooians won over with taco diplomacy.

“For the tacos are very yum yum, our anger we’ll bury and all will be merry,” they sing.

Ms Heine said she altered the original play because it was no longer politically correct and risked offending Japanese culture.

She claimed no “real cultures” were represented in the production.

“Our play this year is a lighthearted adaptation of Gilbert and Sullivan, which includes contemporary references that are not in any way political,” she said.

“Anyone who sees the play will agree.

“The play is not about Donald Trump, it is about the Mikado and I have just named the characters so they have a contemporary reference.”

But Dr Kevin Donnelly, from the Australian Catholic University, said the play appeared unsuitable for primary school.

“Young children don’t have the intellectual ability to follow these arguments and debates,” he said.

“I wouldn’t be dealing with controversial political issues where there are differing opinions in primary school.

“The danger is that, unless its done in a balance and fair way, it comes across as biased and ideological.”


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