Monday, November 26, 2012
Why are you here? A Critical Eye on University Education
COMS 369, L02
Fall 2012
A university education is often the hub of social
progress, scientific advancement, and a platform for fine arts. Universities can provide the foundation for
the flourishing of knowledge and the refinement of natural-born skills.
Parents, especially those that were part of the baby-boom generation, have
encouraged their children to aspire to be university graduates; and of course
they all had the best intentions of hoping to ensure job opportunities and
decent wages to live a comfortable life for their children in what they saw as
a world requiring a changing skill set.
Yet, there are students who are endeavoring to follow their parents’
advice but are not reaching the goals that they felt a university education
would provide.
In
recent economic times, largely from the turn of the millennium until now,
university graduates have not always been able to obtain careers in their field
of study and are now underemployed or often staying in school for another
degree, incurring further student debt due to a dismal job market. This is
becoming a more prominent issue not only among students, but among parents that
are trying to guide their children down a path of success. The value of
education is seemingly becoming a shaky issue for the stead-fast university
education advocates. Furthermore, it is also becoming an uncertain issue for the
alternative group that more heavily supports trades and on-the-job training.
How can the value of a university education be determined when it has become
over-priced through tuition and flooded with students willing to incur debt to
be enrolled because it has an unstated promise that it will guarantee them over
a certain income threshold to live on if they complete the degree?
This
may be considered an education bubble that is likely to soon explode. This education bubble is made up of rising
education costs and the lessening likelihood that students will obtain
satisfactory jobs to pay off the debt they have incurred. This education bubble, albeit initiated with
good intention, is now leading to soaring tuition costs and generated degrees
for which, on the job training would likely suffice. For example, in the United
States one of the fastest growing degrees is in parks, recreation, leisure, and
fitness studies. During a ten year period the number of students earning
degrees in this major jumped 92 percent (O’Shaughnessy, 2011, para. 4). Not
only are there now degrees for which there never once was, but Industry Canada
(2011) shows the average tuition cost increase between 1982 and 2001 being 8.1
percent per year; inflation has only been at a rate of 3 percent.
This
seems to be more of a problem for liberal arts students than students in maths
and sciences. Peter J. Reilley (2011), a
CPA with over thirty years of experience and a contributor to Forbes, proposes
that the Millennial generation (those born between 1982 and 1995) are strong
believers in higher education and have a positive attitude towards education;
however, he redefines this enthusiasm by proposing that “the current positive
attitude toward education is accurate if a student chooses the right degree (student readers:
consider a math-related field if you want job security)” as liberal arts
degrees seem to have few marketable skills to employers (para. 5).
Beyond
undergraduate degrees and the associated soaring tuition costs, our education
system continues to encourage students to go beyond undergraduate studies
without being at all accountable to its students. For example, educational institutions need
people to pursue PhD’s not only to continue research but to ensure more revenue.
These PhD students, which are not planning to remain in academia, are often
allured by the promise of more money, more power, and more passion to do what they
love in the career world. However, the employability of these graduates seems
to be a difficult issue. Danielle Lorenz (2011), a PhD student in Education
Policy studies, has research that shows that about 19 percent of doctoral
holding students said that they were overqualified for their current job and
another 30 percent said that their doctoral degree was not a qualification for
their job (para. 4) . Research shows in 2009, the median income of PhD
graduates was $65,000, the median income for master’s degree holders was
$60,000, and the median income for bachelor degree graduates was $45,000
(“National Graduates Survey”, 2009). There is a clear correlation of earnings
with a bachelor degree and a master’s degree; having a master’s degree over a
bachelor’s degree has an earning gap of 33 percent (“National Graduates
Survey”, 2009). Yet there is only a gap between
master’s graduates’ and doctoral graduates’ earnings of 8 percent; perhaps a
gap that is not worth the additional years of study, associated costs, and
missed opportunities in the workforce. So although one could argue that in the
long run a university educated person will make more over their lifetime, it is
probably a cause for concern that this added monetary benefit used to be more
than double what it currently is about twenty years ago; “tuition fees during
those times were significantly lower, but so was government funding” says
Korfmann (2012), a student in politics and economics at the University of
Toronto (p. 2). That is to say that the
potential benefits of a university education are dwindling while debts are
soaring.
Furthermore,
Statistics Canada (2009) has completed international comparisons that show that
compared to other countries, Canada had the highest percentage of college and
university educated workers who earned less than half of the national median
employment income. Considering our general belief that post-secondary education
is important for our society, this statistic is alarming. Have our ambitions to
be an educated society led to job market that cannot absorb the graduates? Has
our demand for easily accessible education, such as online learning, caused an
increase in educated persons for which there are not enough jobs? Or, perhaps,
as Statistics Canada (2009) even concedes, “Canada is not producing the right
mix of post secondary graduates.” Perhaps the line we are often fed as children
that “you can be whatever you want to be as long as you work hard” is not true.
Perhaps this is a romanticized notion and instead young people need to be given
the information to make an informed decision on what the job market really looks
like and what types of skills are valuable. As Korfmann (2012) observes, “just
like in a regular commodities market, if too many goods (or degree-holding
applicants) are produced (or graduated), there will be a surplus (or
under/unemployment), the prices (or average salaries) will go down, and people
will be more choosy when selecting their goods (because hey, they can afford to
pick through them all)” (p.3).
Recently
Peter Thiel, the founder of PayPal and an early investor in Facebook, offered
20 students under 20 years of age, with promising ideas, $100,000 to leave
their post secondary institutions -- many of which were attending Ivy League
universities. Morley Safer interviewed Thiel (2011) as he explained “we have a
bubble in education, like we had a bubble in housing [...] everybody believed
you had to have a house, they’d pay whatever it took. Today, everybody believes
that we need to go to college and people will pay whatever it takes. There all
sorts of vocational careers that pay extremely well today, so the average
plumber makes as much as the average doctor.”
So
where will the pop of this bubble affect? Mostly the students will be left
holding the ball. And to make it even more difficult for young people and
current students to make appropriate decisions for themselves, the masses do
not seem to recognize the looming disaster of this education bubble. Thiel
explains “a true bubble is when something is overvalued and intensely
believed. Education may be the only
thing people still believe in, especially, for example, in the United States. But
to question education is really dangerous. It’s the absolute taboo. It’s like
telling the world there is no Santa Clause” (Lacy, 2011, para. 7).
There
are scholars that challenge the educational bubble. Fabio Rojas, a professor of sociology at
Indiana University says “it’s not really a bubble and the main reason it’s not
a bubble is because college isn’t a tradable commodity. You can’t flip a higher
education. Also, unlike a house, once you have college debt, you can’t get rid
of it by walking away or selling the underlying asset. You have to work it off”
(Fairbanks, 2011, para. 14). This is a valid argument; however it may also pose
the precise problem very succinctly: an education isn’t returnable or sellable
after you have it and now there are no jobs to pay back the debt incurred. What is the result? The result is unemployed
and underemployed graduates with soaring debt levels, perpetual students, and
parents wondering why their kids are moving home after university. If these parents only knew that the number of
25 to 29 year olds living at home has doubled from 1981 to 2001 (“Industry
Canada”, 2011). Maybe we should start asking “why?”
Becoming a Thiel Fellow is not
accessible to everyone and is not right for everyone; there are other possible
solutions to consider. For example, if we raise the minimum wage to a
reasonable value, perhaps those who are not academically inclined or interested
will not feel the pressure to attend university and incur student debt. They
can still make a decent wage and have a four year head start. Perhaps if
private businesses and the government worked together to subsidize specific
fields to allow for educational gaps to be filled versus overwhelming
participation in already flooded fields, not only would students have brighter
prospects upon graduation, but society would be better served. And this is not
to say that, if you are willing to pay for your school entirely on your own,
take whatever you want. However, remember, this cost is approximately $20,000 a
year (Korfmann, 2012, p. 1).
I
expect these potential solutions, or partial solutions, to be heavily
criticized. For example, you may argue, wouldn’t then the government have the
right to refuse social assistance if you can’t get a job in your chosen field
if you fully paid your educational tab? If you were subsidized and couldn’t
find a satisfactory job to pay the bills, are you responsible? And perhaps most
concerning, couldn’t this be considered a loss of freedom?
I
would argue, no, this is not a loss of freedom. To me, this seems to be
capitalism. As for the former criticisms, these are valid questions; these are
questions that need to be considered and further solutions sought. However,
isn’t it more beneficial to us to at least expose the issue and consider such
solutions rather than soldiering on towards a disastrous end result that will
not leave us any better off, but worse?
If
you are a high school student contemplating further education or you are a
current university student, rather than ask “what is a university degree
worth?” you should decide what kind of life you want. Do you want to live to
work or work to live? What is the best way to acquire the necessary skills?
Remember that university is not the only path to a good living and a good life.
Perhaps
people need less to worry about a university education and need worry more
about the reality of job markets and the marketability of the skills they
intend to acquire. Perhaps there needs to be less investment in educational
institutions, which will only grow this bubble.
Should the price of education not be somewhat correlated with the
potential earnings in the job market? Should we be more realistic with students
about the actual potential earnings that are out there? I firmly say yes.
So
as Thiel (2011) so pointedly expresses on his fellowship website, “whether or
not you become a Thiel Fellow, it’s worth your time to decide what knowledge
and skills you want to have, and to think clearly about the best way to acquire
them.”
So
tell me, what is your degree worth to you?
For Further Information:
Canada. Industry Canada (2011). Chapter 4 - Consumer literacy and Education. Retrieved
from
http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02102.html
Canada. Statistics Canada (2009). College and university graduates with low earnings in Canada -
Demographic and labour market characteristics.
Publication 81-004-X, Vol. 6, No. 2. Retrieved from
http://www.statcan.gc.ca/pub/81-004-x/2009002/article/10897-eng.htm
Canada. Statistics Canada (2007). Study: Labour market outcomes of Canadian doctoral graduates. Retrieved from
http://www.statcan.gc.ca/daily-quotidien/110106/dq110106a-eng.htm
Fairbanks, A. (2011). Peter Thiel’s college bubble theory gains few
believers. TheHuffingtonPost.com, Inc. Retrieved from
http://www.huffingtonpost.com/2011/05/03/college-bubble-burst_n_857082.html
Korfmann, A. (2012). The post-secondary education bubble: The problem
with post-secondary education; subsidies, debt & income. Atlantic Institute for Market Studies. Retrieved from
http://www.aims.ca/site/media/aims/The%20Post%20Secondary%20Education%20Bubble.pdf
Lacy, S. (2011). Peter Thiel: We’re in a bubble and it’s not the
Internet. It’s higher education. AOL Inc. Retrieved from http://techcrunch.com/2011/04/10/peter-thiel-were-in-a-bubble-and-its-not-the-internet-its-higher-education/
Lorenz, D. (2011). Doctoral grads important to Canadian work force --
but half are overqualified for their jobs. Career Incubator. Retrieved from http://talentegg.ca/incubator/2011/04/05/doctoral-grads-important-to-canadian-work-force-but-half-are-overqualified-for-their-jobs/
O’Shaughnessy, L. (2011). 20 Surprising Higher Education Facts. US News. Retrieved from http://www.usnews.com/education/blogs/the-college-solution/2011/09/06/20-surprising-higher-education-facts
Reilley, P. J. (2011). When will the education bubble explode? Forbes. Retrieved from http://www.forbes.com/sites/peterjreilly/2011/11/02/when-will-the-education-bubble-explode/
Safer, M. (2011). Dropping out: is college worth the cost? A
conversation with Peter Thiel. CBSNews.
Retrieved from
http://www.cbsnews.com/8301-18560_162-57436775/dropping-out-is-college-worth-the-cost/?tag=contentMain;contentBody
The Thiel Foundation (2011). Retrieved from http://www.thielfellowship.org/category/education-bubble/
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