Mal-Employment

Virtually no one, except possibly members of this administration, would argue that an economic recovery over the past five years has been robust. Unemployment remains high with the percentage of people who have given up looking for jobs growing every quarter, GDP is stagnant and far too low, spending remains out of control (tempered only by a Sequester that was roundly condemned in Washington), debt now approaches $17.3 trillion, and the Fed keeps printing money (QE-4?) in an effort to keep it all from collapsing.

The president suggests that "income inequality" is the most important issue of the day, implying that if only the rich made less money, the 99 percent would make significantly more. Of course, this, like most aspects of current administration policy, is pure fantasy. Throughout modern history, the divide between rich and poor closes only when the economy is robust, when good jobs are plentiful, when moderate and large businesses are growing, when the government gets out of the way, enabling small businesses to grow into bigger ones.

Income inequality will always be with us—people simply do not have equal ambition, intelligence, enthusiasm, drive, risk tolerance, mobility, social skills, dexterity, ... the list of characterics that lead to "success" is long and complex. To believe that it's simply a matter of the proper mix of big government incentives, programs, and entitlements is folly. In fact, to believe that in a modern post-industrial, information-driven economy, it's simply a matter of education is also folly. Sure, education is important, but it's only one of a number of critical success factors.

In speech after speech over the past few years, the president has stated that every child should go to college. He has encouraged the expansion of a corrupt and dishonest college loan program to make that happen. The result: many people do go to college, but they enter into programs (e.g., gender studies, philosophy, journalism, puppet arts) that have little hope of helping them get a good job upon graduation. However, one thing is certain—many of the young people who enter college today will emerge with a meaningless degree and very meaningful and crushing college debt.

CNNMoney reports:

Economists call that figure the "mal-employment" rate, and right now it tops 36% for college-educated workers under the age of 25, according to figures crunched by Andrew Sum, director of the Center for Labor Market Studies at Northeastern University.

"People don't go to college to be a waiter or a bartender," Sum said. "They lose and we lose."

The official unemployment rate for grads under age 25 was 7% in May, but that doesn't reflect all those who are under-utilized in one way or another. Nearly 8% of grads are working part-time, but would like full-time positions. These workers aren't counted in the mal-employment rate.

Not surprisingly, hospitality and retail are the most common occupations of the mal-employed. Of the nearly 3 million recent college grads, 152,000 are working in retail sales and nearly 100,000 work as waiters, bartenders or in other food service posts. Another 80,000 serve as clerks or customer service representatives, with 60,000 working in construction or manual labor.

Your major matters. Those with degrees in accounting, engineering or computer sciences are much more likely to find college-level work than those who focus on fields like "sports and recreation" or "regional studies," researchers have found.

In an ironic twist of fate, the very young people who vigorously supported this president and his promises of hope and change are now reaping the outcome, mal-employment coupled with heavy college-related debt.

In his blog, Matt Walsh tells his personal story. He was a very poor student, hated school, and was pushed to go to college. He refused, and through hard work became a successful writer. Here's what he writes:

... There are millions just like [me]. Sadly, some of these tales follow a slightly different path. Many times, that kid who’s being choked to death by “formal education” will eventually get suckered into going to college. He’ll go, not because he needs to be there, nor because it’s the best thing for him, but just because. Because because, and that’s all.

So he’ll amass a gigantic debt, miss out on four or five years that could be spent honing his specific skillset, and end up exactly where he could have been, and would have been, without college. Only now he’s 28 thousand dollars in the hole and half a decade behind the curve.

Something has to change. Listen to me on this one. Something HAS to change. This can’t continue. It is not a sustainable model. There are millions of kids with no assets, no plans, and no purpose, taking out enormous loans to purchase a piece of paper they’ll likely never use. It can’t go on this way.

While student loan debt, already over a trillion dollars, continues to set new records every year, so too do college presidential salaries. They essentially dupe gullible young adults into purchasing 90 thousand dollar cars that will sit in the garage and never be driven, and they make out like bandits.

I hear plenty about the corrupt hucksters on Wall Street, why aren’t we talking about the wealthy con artists in academia who turn absurd profits by convincing broke kids to bankrupt themselves?

Obviously it ought to go without saying that some people do need college: doctors, lawyers, engineers, etc. Nobody disputes that. But the rest of us must radically rethink our attitudes towards “higher education.”

Total student debt has gone up by 275 percent in the last decade. How far will it climb, how many more kids will be thrown to the wolves, before we change direction? Since I was born, college tuition rates have gone up by 500 percent. FIVE HUNDRED PERCENT. Why do we send guys like Bernie Madoff to prison while the academic elite get away with gouging an entire generation to death?

Matt Walsh sheds some light on the harsh reality of modern college education and its debt ridden aftermath. As usual, when political fantasy crashes into reality, fantasy loses every time.

Update (1/22/2014):
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In writing about another subject entirely, James Taranto makes a very cogent comment about the higher education industry. He calls it:

... a predatory and lightly regulated industry that markets itself via appeals to economic insecurity. thereby inducing millions of young Americans to take on often-crushing debt

If you think about it for a second, there is a mildly predatory aspect to higher education. The industry implies that one cannot succeed economically without what they offer, and then they offer a wide array of majors that are just about useless. Interestingly, even a useless degree will work when the economy is good, but hope and change has led to an economy that is stagnant and in some respects, getting worse.

It's fascinating that a president who expresses outrage about "inequality" and suggests that he is sympatico with young people is oddly silent about predatory actions aimed at young people. Since he's very anxious to regulate, how about a warning label on every college catalog along the lines of:

WARNING: Many of the courses and some of the majors offered by this institution of higher education will be highly unlikely to prepare you for meaningful employment after you graduate.