Mike "Mish" Shedlock
Mike "Mish" Shedlock Mish is an investment advisor at Sitka Pacific Capital. He writes the widely read Mish's Global Economic Trend Analysis.
Recent Posts
- Full-Fledged European Bank Run; ECB Deposit Insurance is Not the Answer; How FDIC Played a Part in the US Real Estate Bust; Monetarist Fools are Everywhere; Believe in Gold
- Fear vs. Anger: Door-to-Door Fear-Mongering in Ireland on Merkozy Referendum; Expect Fear-Mongering in Greece as Well
- First Time Ever - Majority of Unemployed Have Some College Education; Five Solutions to Education, Student-Loan Crisis
Those who think the answer to the unemployment problem is more education might be surprised to learn the Majority of Unemployed Attended College.
For the first time in history, the number of jobless workers age 25 and up who have attended some college now exceeds the ranks of those who settled for a high school diploma or less.
Out of 9 million unemployed in April, 4.7 million had gone to college or graduated and 4.3 million had not, seasonally adjusted Labor Department data show.
In 2011, 57 percent of those 25 and up had attended some college vs. 43 percent in 1992. Those without a high school diploma fell from 21 percent to 12 percent over that span.
Along with the increasing prevalence of college attendance has come a growing number of dropouts who have left school burdened by student loan debt, but without much to kick-start their careers.
Among everyone up to age 24 who has left college or earned a two-year degree—including those not actively searching — the full-time employment-to-population ratio has plummeted from 69 percent in 2000 to 62 percent in 2003 to 54 percent.
This has occurred even as student lending and enrollment at community colleges has soared, elevating the student loan crisis to the center of political debate and becoming a rallying cry for the Occupy Wall Street movement. Those who graduated with a four-year degree fared better employment-wise but many of those still struggle with student loans. Many others end up underemployed in retail sector jobs as opposed to the curriculum they studied.
Student loans are a trillion dollar problem and growing every quarter. President Obama wants more student loans, but all that does is make many graduates debt slaves for the rest of their lives.
The cost of education is preposterous and the solutions are easy to describe.
Five Solutions
- Kill the federally funded student loan program entirely. Student loans do nothing but drive up the cost of education. Anyone can get a student loan because the loans are guaranteed and cannot be discharged in bankruptcy. The beneficiaries of this horrendous setup are teachers and administrators, not the kids receiving loans.
- Kill state aid to colleges as well
- Increase competition by accrediting more online universities, even foreign universities. This will drive down costs immensely.
- Public unions are a huge part of the reason for driving up teacher salaries, so collective bargaining (collective coercion actually), must end.
- High school counselors and parents must educate kids that there simply are no realistic chances for those graduating with degrees in political science, history, English, art, and literally dozens of other useless or nearly-useless majors.
The deflationary overhang of student debt is enormous. Those in debt will postpone buying homes, getting married, starting families, and spending money in general.
The only solution is to ensure kids not get into massive debt in the first place. The way to achieve that is to drive down the cost of education.
Sadly the Obama administration (like many before it and many at the state level as well) has done nothing but throw money at the problem, rewarding unions and administrators while making debt slaves of kids as education costs spiral out of control.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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6. Enable Student Loans to be Dischargable in Bankruptcy
7. Raise Taxes to pay for education
Ultimately, one of the biggest problems with higher education today is that we're dumping a ton of money into educational tracks that don't help the economy. We're dying for engineers, programmers, and hard scientists. There are jobs for them, lots of jobs. Outsourcing is a known bad idea at this point, you don't do it for real design work. I understand why we should subsidize students in those majors.
How many liberal arts majors do we need? These lib arts guys don't really produce anything, except maybe some books. Their career track is usually "more education, then academia" (aka, "propagate the system"). This is stupid. I love reading history, and I don't even mind funding some RESEARCH, but economic resources should be going to economically useful professions. Subsidizing lib arts students is a dumb use of resources. And don't get me started on how these worthless lib arts majors all wind up being worthless teachers when they fail out of life; not only are they screwing our economy, they're fucking up our elementary and high schools as well.
I always quote Good Will Hunting: "you dropped a hundred and fifty grand on a fuckin education you coulda got for a dollah fifty in late chahges at the public library".
Education doesn't need to be this expensive. With technology and the internet, you can have 1 million ppl in a single classroom.
We need to apply manufacturing of scale to education. Instead of having 1000s of schools with 1000s of the SAME departments, make 10 huge universities that are education hubs that provide the same education for a fraction of the cost.
There are plenty of programmers on elance.com that do a fine job and are brilliant....that will do your work for $5/hour.
Even a Comp Sci or Mathematics degree is OVER PRICED.
The demand you are talking about is seasoned engineers with 30+ years in the field. Comp Sci and math majors are some of the HIGHEST unemployed.
This notion that only liberal arts degrees are not finding work needs to be SQUASHED. Graduates of every major is having a rough time finding a job. There is no silver bullet major that guarantees you a job.
The key is ACCESS. Let PEOPLE (why do we assume education is just for 20 year olds???) have access to a college degree for $500.
We need to adjust to a lower cost of living, because the rest of the world lives far below our standards....and they aren't any dumber or less motivated than we are. And that's where the jobs are going.
We need extremely CHEAP,quality education. And we need to be willing to make less money and spend less money. It's much easier to do that when education is dirt cheap. That also means cheaper health care and other services, as those workers will be plentiful and affordable.
Maybe that is why there are so many poorly run companies now. Plenty of people who might be qualified on paper but in reality are probably barely fit to dig ditches or flip burgers.