“Education Is The Key?” Assessing The Value Of A College Degree In A Tumultuous Economy

by Austin Hill
Half of recent college graduates can’t find employment. Those who find a job often settle for something less than a “college level job.”

So what good is a college education, anyway, in our very unstable economy?

As 2013 launches with more federal government debt and American businesses guessing when the next punitive regulatory show will drop, most Americans are ignoring an area of societal upheaval that is poised to get more intense. Increasingly, Americans are wondering how essential it is for one to possess a college degree.

The upheaval transcends what you’ll read in the occasional “top paying” and “worst paying college degrees” articles. In fact, the presumption that a particular college degree will land one in to a particular job with a particular salary is actually part of our problem (such presumptions don’t adequately allow for the fact that our economy, and, thus, the relative value of skills and services, is always subject to change).

The most obvious manifestation of this problem is found in the pain of ever-rising tuition costs, and student loan debt. This isn’t anything new, but the recessionary conditions of the past five years have brought college degree price tags, and the debt they engender, under the microscope.

President Obama has spoken to this concern over the years, and-not surprisingly- he has proposed more “free” and reduced-rate student loans (all to be subsidized by taxpayers). His main challenger in last year’s presidential race, Mitt Romney, campaigned on policies to spur job creation as means of putting young graduates to work. Yet both candidates ignored the real problem: no matter how the economy performs or what the labor markets are doing, the price of a college education always moves in one direction-up.

So, why does this happen? Why, when the prices of other products and services either remain flat or decline, do tuition rates steadily rise? At least part of the answer is found in one very important fact. It is a consistent agenda within institutions of higher learning to offer as many low cost, and even “free” tuition programs as possible. Whether you’re examining state run colleges and universities, or private institutions, look in to the details of their budgets and the agenda becomes clear. It is a point of pride when, year after year, college and university leaders can report that they issued more “scholarship” programs that were doled-out according to ‘financial need.”

This is to say that colleges and universities are often set up to function like their own little economic re-distribution systems. And while the goal of getting lower income Americans enrolled into college is noble, the cost of it is usually balanced on the backs of middle class students and parents who are trying to earn their way through life. If a student isn’t “poor enough” to qualify for needs-based assistance, then the student will face ever-rising tuition rates.

The less obvious component to the college education dilemma directly involves changes in the nature of our American economy. Although it doesn’t fit conveniently in to the various narratives of our national political dialog, the fact is that our country may very well be – believe it or not – on the verge of a manufacturing renaissance (gasp!). And it may be happening without the permission and blessing of the AFL CIO (gasp again!).

For most of the past forty years, the U.S. has been a place where great things are invented and designed, but the actual building of those things has happened on other continents. Yet last year, the General Electric Corporation began once again to build refrigerators and dishwashers in the U.S., reversing a nearly two-decade long trend. Last fall, the Deloitte global consulting firm published a report suggesting that nearly three-quarters of a million jobs in the U.S. manufacturing sector remain un-filled, because employers can’t find workers with the correct skills. And Jeff Immelt, CEO of General Electric, even suggested that the U.S. is poised for a sizeable “in-sourcing” boom – the opposite of “out sourcing” – where manufacturing jobs that were once “sent overseas” return home.

This scenario also challenges the importance of a college degree. It suggests that we may be on a trajectory where people who know how to weld, operate a lathe, and run a drill press, could one day be in higher demand than those with accounting, engineering, and computer science degrees.

An “in sourcing” boom. A manufacturing renaissance. Some would call these things wishful thinking, yet the beginnings of such phenomena are here, right now. Americans should be preparing for it – and we should all be asking the leaders of colleges and universities why their prices only go up.


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