One of the things that’s driving me absolutely bonkers this election season is the focus all the candidates have on returning the USA to the economy of the 1950’s and 60’s. All of them, but especially Messers Trump and Sanders, seem to think that if we wall ourselves off from the rest of the world, we can return to those halcyon days.
It’s a pipe dream, and if you’re buying into it, you might be stuffing something other than tobacco in your pipe. I’m going to drop some knowledge on you that you might have heard whispers of, but never been forced to grasp. The “good ol’ days” are gone forever – and they’re never coming back. Labor-intensive work, requiring little to no skills that pays well, is a thing of your memories. Soon, many of the jobs that we kid ourselves about being in demand will have gone the way of the blacksmith, the cobbler and the typesetter.
It’s understandable that most of us do not want to hear this. We grew up being to ld that if we worked hard, kept out of trouble and were good citizens we could live the American dream. Then, one day we woke up to find that our jobs disappeared and they aren’t coming back. Nobody told us why, or what jobs would replace them. Then, we found out the jobs that did replace them required all kinds of skills that most of us lacked. It didn’t matter that we’d proven ourselves as good employees by every other measure: we simply didn’t qualify for these new jobs.
It would be wonderful if we could bring back those labor-intensive jobs that didn’t require much in the way of training or skills. But here’s the thing: anything that’s labor-intensive is now being done elsewhere, for much less than you would accept as a pay rate. No company in their right mind would bring those jobs back here. As an example, let’s take Apple Corporation’s outsourcing the manufacturing of iPhones to FoxConn, a Chinese company. What nobody told you (or apparently, Mr. Trump) is that FoxConn turns out those millions of units using fewer than 100 employees, and they’re mostly engaged in packaging and shipping. 85% of an iPhone’s manufacturing is automated: it’s built by robots. So, yes, I suppose you could force Apple to build a factory in the USA. But do you suppose they wouldn’t also build the doggone thing with robots? Of course they would.
This is the reality that the snake oil salesmen have avoided telling you this election season. What’s worse, they aren’t telling you that the move away from those jobs is accelerating. They aren’t telling you that by 2025, many of the jobs we currently take for granted will be gone, replaced by automation or cheaper competition from overseas. Think of it this way: the only place you find elevator operators today is in old movies. Fairly soon, anyone who drives for a living, works in the fast-food industry, works in a warehouse or does general office work will be looking for a new career. How can I say that with certainty? Because those jobs are already being slowly replaced. Amazon now has robots doing order picking. McDonald’s is rolling out ordering kiosks in their restaurants. Self-driving vehicles are already on the roads, and companies like Uber and UPS are already in partnerships with vehicle makers to implement driverless delivery systems.
In other words, you needn’t be prescient to realize that the jobs of today are disappearing and that the jobs of yesterday are not coming back. But rather than gird Americans for this reality, we get platitudes about “forcing” manufacturing jobs back to US shores. When future jobs are discussed at all, it’s usually with vague rejoinders about “getting the skills for the jobs of tomorrow.” The politicians are afraid to tell you the truth. It’s a truth I suspect most of you have already grasped, even if you haven’t acknowledged it.
This isn’t the first time we’ve undergone a dramatic shift in the workforce. Over a century ago, our great-grandparents were faced with the shift from an agrarian society to a manufacturing one. They didn’t handle it particularly well. Now it’s out turn, as we lurch from a manufacturing economy to a knowledge economy. But we can do one of two things: we can embrace it and lead the world once again. Or we can fight it and get left behind, becoming a second-rate power.
You may be familiar with Mike Rowe from his show on the Discovery Channel, Dirty Jobs. Even if you’ve never seen the show (in which case I suggest you catch an episode), you’ve probably seen him shilling cars and trucks for Ford or paper towels for Viva. And if you watch ABC’s World News then you hear his voice every night – he’s the announcer during the opening and commercial breaks.
What you may not realize is that he is also a serious advocate for vocational training. His foundation, mikeroweWORKS, is dedicated to making education in skilled trades something other than a remedial course of study. He understands a point I made several weeks back, that a four-year degree is not the best path for every student. Or for our nation’s future.
Before you say that of course our nation still values the skilled trades as highly as a college education, ask yourself how you would react if your son or daughter announced their intention of becoming a truck driver after high school. Or a plumber, electrician, farmer, or welder. Even thought they are among both the highest paying and most consistently sought after trades by employers, I doubt it would be greeted with the same enthusiasm as an announcement they wanted to become an astrophysicist or surgeon.
Therein lies a major problem, both for the current economy and the economy of the future. Already the news is full of accounts of college graduates queuing up for job applications in the unskilled trades (think retail worker), simply because there isn’t demand for their skill set. At the same time, there is a desperate need for mechanics, welders, riggers, electricians, plumbers, HVAC techs – all you need to do is pick up the help wanted section of any metro newspaper.
Mr. Rowe understands this problem is a problem. To that end, he’s written an open letter to Mitt Romney. He wrote a similar one to Barack Obama during the least election cycle, but based on the President’s education initiatives it fell on deaf ears. You can read the full letter here, but I wanted to lift one line that I thought exemplified the problem:
“I always thought there something ill-fated about the promise of three million “shovel ready jobs” made to a society that no longer encourages people to pick up a shovel.“
In a nutshell, THAT is the biggest problem with getting our nation back to work today. Many of my conservative friends are adamant about making welfare and unemployment recipients work for their benefit checks. I don’t necessarily disagree with that sentiment. But in a nation that no longer values physical or skilled labor, how likely is a program akin to Roosevelt’s CCC or WPA to succeed?
You may recall that earlier this month I did a two-part series on the issue of college costs. Apparently, I’m not the only person who believes the underlying cause for skyrocketing tuition and housing costs is the sheer number of undergraduate students currently enrolled in two- and four-year programs.
I came across this article last night by Richard Vedder, Professor of Economics at Ohio University. Professor Vedder describes in much more detail than I allotted the cause-and-effect of increased enrollment, and also goes into quite a bit of detail about how the federal government’s subsidies only exacerbate the situation, not alleviate it. Given that word broke yesterday that the Senate did what everyone expected and came to an agreement about how to use creative accounting to extend the student loan program at current interest rates, I thought it made sense to revisit the topic. Feel free to hit the link and post your comments.
Yesterday, I dissected the underlying problem with higher education, as it currently exists. A college education costs far more than it is actually worth.
Today’s students pay far too much and receive far too little benefit to justify the expense. What’s more, in most cases they are strapping themselves with insane amounts of debt in the process. It is a debt that hampers their ability to fully function in modern society. The resulting lack of disposable income for the first decade or more after graduation results in a generation that is incapable of financially supporting themselves. If there is an economic downturn (like now), that lack of spending power means that upwards of 40% of the labor force is unable to do those things which define a middle class lifestyle: own a home, own a car, start a family. Instead of college leading to the middle class, college results in poorly educated people (who mistakenly believe they’re highly educated) reliant on the government or their extended families for support.
So, what’s the solution? We constantly hear that without college, young people have no hope of starting in a good career, that their prospects for future advancement are limited and they will be limited in their ability to fully participate in the American Dream. And so we end up focusing on ways to make college more affordable, without actually looking at the reasons for the high costs involved.
As I pointed out, the principle reason for the inflated cost of higher education boils down to the number of people enrolled. There are 3 times as many college students today as there were 30 years ago – are we really surprised that tuition and fees are also three times higher than 30 years ago? The real question is why we are funneling so many people into colleges. If it is to prepare them for post-academic life, then there can be little doubt that we’re failing in a big way.
I’ve always felt the primary purpose of education – whether primary, secondary or post-secondary – should be a dual mission: first, basic facts and skills (the “3 R’s”) and second, developing critical thinking skills. In American education, we’ve focused primary and secondary education on the former while nearly ignoring the latter. This trend is now extending into post-secondary education. A prime example is the dreaded research paper. I shudder at the memory of writing exhaustive, well-researched papers on a weekly basis while in college. The amount of time I spent developing a final paper for each class was measured in weeks, not days. Yet, today’s students often are tasked with only one paper at term’s end and drilled in preparing for weekly quizzes – an approach similar to the high school experience. The original purpose of higher education in the American system, developing one’s mind to sift through tons of data, determine which pieces are relevant and create a cohesive argument from them, is being lost. In other words, we’re graduating millions of kids prepared for an extended stay on “Jeopardy!” but not ready for the types of jobs that traditionally require a college degree.
This is also a result of herding high school students into college. I think the best way to tackle the costs associated with college stem from rethinking the way we handle primary and secondary education. Current elementary and secondary school curricula are leftovers from the days when the United States was principally an agricultural society, and recent reforms have done little to address that fundamental flaw. If anything, the recent and increasing emphasis on standardized testing and evaluation of student and teacher achievement is a step backward and fails to address the real world situations most young people face after graduating from high school. Because our education system now deemphasizes critical thinking skills in favor of rote memorization and socialization, most kids enter into adulthood knowing a set of facts that are essentially meaningless – unless preparing for life as a game show contestant.
The best course of action, I believe, is to reintroduce vocational training during high school and reemphasize critical thinking skills, beginning in primary school.
Vocational education programs, where they do exist, are often maligned, snubbed and underfunded. However, I see nothing wrong with providing basic education in critical skills developing courses (math, the sciences, history, English) while also providing 2-3 hours per day of vocational instruction to those students who prefer that track. This is a similar education structure to the German model, essentially – only instead of four tracks of study, I would streamline it to two and I wouldn’t begin the vocational track until the age of 13 or 14, not 10. Along with making vocational education an acceptable option, though, we need to reconsider the courses available. Traditional “vo-tech” professions such as auto mechanic and machinist should continue to be included, certainly. But many professions that currently require a bachelor’s degree only require it because it signifies the holder has developed basic critical thinking skills, along with the basic technical skills required. Professions like LPN or Network Engineer do not require the job holder to have in-depth conversations on the merits of St. Thomas Aquinas’ views of married clergy; there is no reason that learning how to create such a dissertation should be part of the education process to enter those fields.
As I said, the current emphasis on standardized testing results in less classroom time devoted to developing critical thinking skills. In extreme cases, it is turning our teachers into nothing more than room monitors and test graders. The practice grew from concerns that education standards in the US lagged other first-world nations in education achievement. While the goal was and remains laudable, the prescribed cure is making things worse. As a nation, we’ve fallen further behind in academic achievement. Somebody, somewhere decided that rather than measuring academic achievement in terms of how well students think, measuring how many arcane facts and figures they memorized was important. Don’t get me wrong, a basic knowledge set is important. But without the ability to turn those facts and figures into a thought, they are nothing more than bytes of data. We need to empower teachers to create thinking students and reward those students for developing their thought processes. The notion that those skills can wait until college to fully develop is proving wrong-headed.
Of course, there are challenges associated with this type of program. The biggest is probably changing the mindset we currently have regarding education. That requires buy-in from multiple stakeholders. Teachers unions, who’ve proven resistant to change in the past. School administrators, beholden as they are to current power structures. The federal government, still trying to figure out how “No Child Left Behind” left so many kids behind. Most importantly, it requires not only acceptance but a demand from parents, who likely will be confused by the changes.
The other option is to simply continue on the current course and leave another generation of kids ill-prepared for adulthood, in three phases of their development: their academic achievement, their career preparation and the amount of debt they’re saddled with before they ever earn a dime.
This is an unusual time of year to discuss the state of higher education in America. After all, May is usually the end of the academic year for most universities. The senior classes at most have already received their sheepskins and incoming freshman won’t arrive on campus until August. We’re well into June and most folks thoughts are on summertime fun.
But as with everything in this topsy-turvy year, higher education is taking up space on the front pages of major newspapers. There are two reasons for this. The first is that federal student loan interest rates are set to double in July, a situation that will make the already insane tuition costs even more unbearable for many. The second is the re-emergence of Peter Thiel, the founder of PayPal and his entrepreneur initiative. The first has, as with everything this election cycle, devolved into a partisan fight. Not a fight over the idea of maintaining the current interest rate – both Republicans and Democrats agree they should – but a fight over how to pay for the increased subsidy. (As usual, Democrats want to raise taxes on the upper middle class, while the Republicans want to gut a Democrat sacred cow). The second highlights a more critical discussion and the one I want to focus on here: how much is a college degree worth?
For those of you who aren’t familiar with Peter Thiel, he is undeniably one of the world’s brightest individuals, something of a Libertarian lighting rod and as an immigrant, the prototypical American success story. He became something of a Web 2.0 wiz kid, when he co-founded PayPal in 1999 with Elon Musk and Max Levchin. He then founded Clarium Capital and created the Founder’s Fund in 2005. Among his noteworthy achievements, he is a chess grand master. He provided early funding for Facebook and still sits on the Board of Directors. (That initial $500,000 investment is now worth an estimated $9.2 billion, based on yesterday’s market close). Thiel also foresaw the financial crash of 2008 as early as 2004, when he correctly noted that the dot-com bubble of the late 1990’s had simply transferred to real estate.
The reason Thiel is a controversial figure in higher education is his creation of the Thiel Fellowship, whose sole purpose is to find students with great product and/or business ideas, have them drop out of school, and award them with $100,000 grants to launch their businesses. Additionally, business and engineering leaders mentor Thiel Fellows. The goal is to bypass college entirely and get right to work.
Why would Thiel, who holds BACP and JD degree from Stanford, work on a project that is popularly seen as undercutting the value of higher education? Simply put, he doesn’t believe that the way the college experience is currently constructed holds real value for most students.
And it’s easy to understand why. Stop to consider my home state’s primary public university, Rutgers. Students in the 2017 class can expect to pay about $96,000 for their four years – provided they’re a New Jersey resident (that cost balloons to $154,000 for out-of-state students). A New Jersey student from a median income family can fully expect to have to pay $84,000 after state and federal grants. Assuming they don’t receive any scholarships, that hefty price tag will come primarily from loans. This is just an illustration, of course. There are other fine universities that carry lower tuitions and fees, but the point remains: why so much? Well, the answer is actually simpler than the very public teeth gnashing might lead you to believe. Nationwide, tuition is about 300% what it was 30 years ago. Over that same time, student enrollment rose 315%. This is simple supply-and-demand economics. There hasn’t been a commensurate increase in the number of colleges and you have more students competing for the same amount of resources. Everything else (capital improvements, staff, etc.) stems from that simple fact.
But has the intrinsic value of a Bachelor’s degree risen by a similar value over that time? Probably not. You can make several solid arguments that if anything, the value of a Bachelor’s degree is less than it was when I graduated in 1989. First, there’s the sheer number of college graduates now in the work force. In 1992, BLS estimated there were 27 million college graduates, comprising about 25% of the work force. (See chart to the left).By 2009, that number reached 44 million, comprising 36% of the work force. And for our 2017 graduate, those figures are estimated to be 58 million and 45%. Where once a Bachelor’s degree separated you from the rest of your age group (and therefore put you near the head of the pack for advancement, promotion and salary), by 2009 there were more people sporting a Bachelor’s degree than people with only a high school diploma in the workforce. The BA or BS after your name has become what the high school diploma was a generation ago: a sign of basic academic achievement.
Then there’s the question of what a student learns during their course of study. Certainly, some practical workplace knowledge is gained, but most work skills are acquired as a result of internships and part-time employment. Quite a few students graduate without even the rudimentary skills required – a fact that many hiring managers are well aware of. I have a humorous anecdote that highlights the point: in 2007, I started a paid internship program at a company I ran. One of the interns was a very bright and driven kid attending one of the better business schools in New York. After he graduated in 2008, I offered him a full time position as an assistant site manager at our premier location. I was assisting during one particularly hectic event and asked him to create a pivot table in Excel. After what must have been 15 of the most frustrating minutes in his young life, he looked at me (nearly crying) and admitted he had never learned how to create one. As it turned out, he was an honors graduate who was horribly unprepared to work in his chosen field of study (Business Management). A short while later, he left both the company and the business world behind and decided to follow a vocation more to his liking (Entertainment). I doubt that young man today would say the money he spent on his degree was worth it.
There’s also the question of how much a degree actually prepares you for the life-long learning required in today’s economy. The courses I studied as a young electrical engineering major seem almost quaint by today’s needs. Hardware has changed and so has the software that drives every gadget in our possession. I received a well-grounded (pun intended) theory of how electricity works, but as for specific knowledge related to my field now – that part of my education is useless. The computer languages I use on a daily basis didn’t exist in 1988. The circuits I work with involve components that weren’t dreamt of then – and the gadgets of today do things that could only be found in episodes of Star Trek. The study habits I use to learn these new technologies aren’t the result of a well-honed college experience, otherwise my house would be littered with half-eaten pizzas and empty beer cans. I’ve probably made more use of several of the liberal arts courses I was required to take over the past decade than the ones directly related to my degree.
So, if Peter Thiel is right, what then is the alternative? We’ll look at that tomorrow.