The Devaluation Of Higher Education

Tyler Durden's picture

Submitted by Carmen Elena Dorobat via The Mises Institute,

Government programs (such as subsidies and student loans) designed to inflate both the supply and demand for higher education have driven a wedge between universities, students, and employers. Like any other economic good, the value of a higher education degree is determined on the market, at the intersection of the subjective valuations and appraisements of those constituting the supply and demand of that particular good. The parties interested in these transactions are not just education providers and students, but also—or even primarily—employers looking to hire graduates into their companies. At least, that’s how things should be, with entrepreneurs at the forefront, driving and shaping up the content and quality of the education and training of their future employees.

But with the government interfering now for decades with this precarious balance, it is not unexpected to find that the essential link which allowed the market to work efficiently has been fractured. The result is that higher education degrees no longer hold any value for employers.

Recent evidence suggests that in the UK, for example, a record number of university graduates—one in four—face only a choice between unemployment and taking a job that does not require a degree. This shows that their degrees are not demanded on the market or, alternatively, that young people are malinvesting high student loans into degrees which, once obtained, will not offer them better employment alternatives than before—thus having a rate of return too low to justify the initial investment. Similarly, an investigation by The Economist has revealed that worldwide, BAs, BSCs, but also master programs such as MBAs are no longer considered to offer a candidate a competitive edge in the marketplace.

Another facet of the devaluation of higher education is the record high number of specialised degrees, a trend which began with masters and MBAs, but has now peaked into PhDs.The mismatch between supply and demand (academic positions) is even wider in this case. A 2013 paper published in Nature Biotechnology has found that “Each year, there are seven times more PhDs awarded in science and engineering than there are newly available faculty positions.” In fact, the authors show that

Since 1982, almost 800,000 PhDs were awarded in science and engineering (S&E) fields, whereas only about 100,000 academic faculty positions were created in those fields within the same time frame. The number of S&E PhDs awarded annually has also increased over this time frame, from ~19,000 in 1982 to ~36,000 in 2011. The number of faculty positions created each year, however, has not changed, with roughly 3,000 new positions created annually.

A part of these graduates, especially in economics, end up working for the government when they eventually fail the market test. But the trend is also extending further to postdoctoral fellowships, which are sought after by the 70% of PhDs unable to find alternative employment. 

Taking the government out of higher education and letting universities compete in providing market-relevant, profitable degrees is only one part of the solution. The market for education won’t be entirely healthy until the government is also taken out of primary, secondary, and high school curricula and finances, allowing parents and pupils to become informed consumers of education and good judges of their investments.

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LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) Oct 31, 2016 5:26 PM

I like the discussions that I have with my taxi driver when it (don't want to type-cast with a gender) has a PhD in Womyns Studies.  It usually ends up shrieking so intensely that the inside of the cab windshield is covered with spit.  That's when the Bose noise canceling headphones come in handy.

Canadian Dirtlump's picture

I graduated in the spring of 1997. At that time Women's studies was an obscure field which typically elicted knee slapping laughter from both sexes. There were 2 genders then as well. Fast forward to today, and you have an explosion in race and gender studies which ostensibly serve as resume boosters for minimum wage retail jobs.

Between the watering down of the actual education, and the explosion in demand which has seen cost explode, I'll be happier to send my son to hairdressing school than I will to university.

J S Bach's picture

60 years ago, something like 5% of the US population attended college or was considered "college material".  That is, they had a higher IQ or showed a potential for higher learning.  At that time, most people understood that everyone was not molded of the same clay.  In other words, egalitarianism hadn't taken its poison root yet.  And there was a much higher number of people who took on work as apprentices in the skilled trades.  This was not considered "beneath" them as it is our dumbed-down "intellectuals" of today.  And back then, when one graduated from high school, they were indeed capable enough in the 3 Rs to wend their ways through society with assurance.  Today, kids can't parse a sentence, do long division, nor find most countries on a map let alone excel in the higher sciences.

Let's face it... our ancestors were intrinsically right.  Not everyone is college material and we need to put an end to what Revilo Oliver used to call the "diploma mills" whose only purpose is to herd as many debt-slaves - er, students - through their illustrious halls of ivy.

I-Engineer's picture

This is some perfect storm:

1) Government has fucked up the supply-demand (everyone is expected to have a degree)

2) The degree doesn't show any manner of capability anymore (I have met Ph.D's dumb as fence-posts)

3) Immigrants that have degrees from overseas are usually even worse because they don't even pretend about quality

 

Yay for socialism's equality of outcome.

Amun's picture

It isn't socialism. It is exactly the opposite of it that caused complete dislocation. Deregulation of UK higher education.

It is the free market introduced into HE by UK government. Elimination of grants and of free HE (with limited by subject student spaces),

followed by introduction of private loans for unlimited numer of students wishing to do nothing but media studies and then working at car rental companies.

Private Loans = Misseling ground for loan sharks worth billions.

 

The author knows F All about UK HE (when she writes "Government programs") inspite of having immigrated to UK and working at UK university.

Perhaps an article about herself with a PhD in Economics and failure to secure economics job.

https://mises.org/profile/carmen-elena-dorob%C4%83%C8%9B

 

Stuck on Zero's picture

My company replaced two PhDs in computer engineering with a high-school dropout.  We need video error correction and PhDs spent eight months fiddling with MatLab and produced nothing.  The dropout built an end to end CODECon our transcoders and had it running in under a month.  No lip. No attitude. No demands.  We no longer higher by college pedigree but by skillset.

sun tzu's picture

Free HE reduces the number of idiots going to college? You must be a graduate of Dumbass University

Déjà view's picture
1912 Eighth Grade Examination for Bullitt County Schools

http://www.bullittcountyhistory.com/bchistory/schoolexam1912.html

 

Better prepared in 1912...not dumbed down as today...

Spungo's picture

I never understood why everyone needed to finish 12 grades. Instead of having grade 12 math for smart people and a separate grade 12 math for idiots, there should just be 1 math - smart math. If you can only complete up to grade 10, you can say you reached grade 10 math, and everyone would understand what that is. People today can say they graduated, and it gives no indication of what they know. They could be future doctors or they could be functionally illiterate.

 

CheapBastard's picture

You're sounding mighty 'microaggressive.'

 

Better watch it before they put on you paid (or unpaid) leave esp if you not part of the Snowflake Tribe.

Canoe Driver's picture

True, that was the concept of "grades," originally.

mkkby's picture

That would immediately be called racist, because 99 out of 100 black kids would never get past 8th grade math and reading. At my school that was pre algebra, and there's no way Trayvon gets through that.

We have to pretend everyone is the same, even though it is obviously a lie. Someone might feel bad.

Watched PBS fake news today. Story was about 2 down syndrome kids who were helped to make an amateur movie. It wasn't enough to give these kids $70k and all the equipment they needed. They had to lie to the kids and pretend they were Hollywood celebs for a day -- even putting them in fancy clothes for late night talk show appearances.

Spungo's picture

You're probably right that it would be called racist. Rampant science denial is really getting out of control. If you ever dare to suggest that evolution is a real thing, you'll be fired from any job. Anything that goes against the biblical story of all humans being created equal is dismissed as racist or sexist. Asians were treated like absolute shit for the longest time, but they still rose the dominate everything. The left sweeps this inconvenient data under the rug and tries to pretend that locking them in camps during WW2 wasn't an indication of extreme racism they had to overcome.

I'm not sure what the next SJW craze will be. Dogs and cats act different due to social conditioning? Dogs would act as lone hunters if we brow beat them into submission? Cats will suddenly become pack animals? 

Tiwin's picture

How about steel framed buildings will fall at freefall speed into the path of most resistance?
Is that rayciss?

konadog's picture

My observation is that nearly all kids are born with an innate curiosity and desire to learn. Humanity would not have evolved into a continually advancing technological civilization had that not been true. Our problem is that the government operated public education system systematically destroys it. Private schools are also heavily influenced by the government decreed lunacy. That's why only a few kids are so called college material. Only the strongest minds can withstand the 12-15 year assault of the public education asylum.

The public education asylum was created by Horace Mann and others not to educate, but rather to churn out a large supply of factory robots with certain skills that were sought in large numbers by the elite industrialists (call it version 1.0 of offshoring to minimize labor costs and maximize their profits). Obedience to authority was high on that list (45-55 minute periods demarked by ringing bells and so on - to drill factory assembly line precision timed movement between tasks). That has morphed over the past 50-60 years into a complete debacle that attracts every imaginable leech seeking their piece of the taxpayer pie - from the processed food companies that supply the cafeterias (and cause our kids to get fat and sick) to the surveillance state video camera manufacturers looking to sell their snake oil "security" solutions. This legion of leeches sucks away any resources that might have actually gone into helping kids learn - and especially away from helping kids learn how to learn on their own which wasn't part of the program from day one. 

Fortunately, there is a growing movement of free thinking people who have recognized this. It's often called unschooling. http://classdismissedmovie.com

Drain the swamp. Trump 2016.

GreatUncle's picture

Try back to the 1800's in Britain there was only a few thousand teachers across the whole country. In the 60's you left school at 14-15, now it is really a minimum of 18 years and in many caes it is in fact 21. No kidding you got potentially 6 years of people that should be unemployed still in education that when they finish have a shed load of debt, working a minimum wage job somewhere that just needs a basic education.

Great for the unemployment statistic though, when you look at 3rd world countries without this intensified level of education end up with fast approaching 40-50% unemployment because of no education.

Gordan Brown, previous prime UK minister actually pushed for education to be extended to 24 ... why? For the education or to keep 3 more years of people off the unemployment register. (Was around 2007).

That is the tale of education.

fleur de lis's picture

The entire edjakashun system is a fraud.

Tuitions and loans are slush funds for the colleges/universities who spread the wealth among faculty, beautifying the interiors and landscaping the exteriours, expanding the dining experience, keeping the "health" center well staffed and stocked, and making sure that no one ever offends anyone else. 

Then they promote dead end courses to snowflakes who couldn't name five state capitols but want to hold well paid management positions telling the rest of us how to live.

The corporations are complicit in demanding college degrees for administration positions.

This will not stop until the diploma mills have some skin in the game.

If half of the graduates in any area cannot find related work the college/university should find them gainful work within a year.

If they can't do it, then they have to admit that the program is a lemon and refund the tuition to the students, followed by a closure of the dead end classes.

It seems that these dead end courses exist only to keep tenured professors collecting easy money and extra money being poured into the schools with no cost benefit for the students, taxpayers, or society.

 

 

 

 

 

caconhma's picture

I got engineering degree back in 1975 from a major and reputable University. I got a good education. At our department of Electrical Engineering and Applied Physics we had just 20-25 graduate student and 50% were Chinese

The last 25 years before retiring, I was in an airspace business. I was a program manager working with people who earlier were working with Dr. Wernher von Braun. Once, I was called to a corporate VP who offering me a position as a launch director since they had problems with major satellite commercial customers and I had a reputation as a problem solver. Well, I replied that I had to think it over. I called my friend for an advice. He was a chief engineer in-charge of launching US military satellites.

I told him that I was offered a launch director position where I had limited experience doing so and asked him for an advice. He told me: you will be in charge of hundreds of engineers/scientists and with a dozen major subcontractors. All you need is a solid engineering background, program management skills, and a common sense!

Once, my deputy hired a full professor in engineering from the Stanford University. Two months later, he fired him. I asked him why. He replied: the only thing he did great was bullshitting.

Paul Kersey's picture

This may say it all:

"Adjunct Professors typically earn between $20,000 and $25,000 annually, NPR reports."

In other words, it might take a couple of lifetimes to pay off those student loans.

hongdo's picture

So how come college is so expensive if the teachers get paid so little?  The college business must not be teaching.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) hongdo Oct 31, 2016 5:49 PM

Part of it is them building monuments to themselves in the form of outrageously expensive buildings and sports arenas. They can't have the special snowflakes sitting in classrooms without vaulted ceilings and marble floors, now, can they?

CheapBastard's picture

Schools are expsnive because admin people make a killing. In my tiny school district they just appointed an administrator in charge of the district for $680,000 a year for three years! The teachers are paid peanuts.

 

wtf is that?!

Shemp 4 Victory's picture

 

wtf is that?!

For the district's taxpayers, that is known as a burning sensation in the anus.

Ex-Oligarch's picture

Yeah, ok, but the prestige!    

 

puckles's picture

Being an adjuct prof is not a career path. They can never be tenured, are paid on a piece basis, per course, and are typically grossly overworked and underpaid, unless they do it unquely to bolster their own egos--which a good many do, because being a "professor" is somehow chic in the circles they frequent;  Donna Brazile comes to mind.  She's currently an adjunct at Georgetown.  If only they knew the reality!

It frankly is beyond me how a good many so-called students manage to do well enough on the SATs or other measurement tests to be admitted to competitive schools.  I am married to a full professor,  and have had the somewhat unique perspective of a returning grad student within the past decade. Many of the people in a goodly number of the courses for which I was a "reader" (i.e., an assistant teacher) appeared to slumber/surf the internet through much of the presentation/discussion, if not all of it.  It was quite apparent when it came time to grade their exams that some only showed up because some of the course grade was figured on attendance. Those who attended and actually paid some attention were typically of two categories--those who were both interested in the subject matter, and capable of dealing with it--a distinct minority; and those whose study skills/reading comprehension/writing ability bordered on that of an illiterate.  It was a most disquieting, albeit illuminating, experience.

Shemp 4 Victory's picture

It just goes to show that most people aren't college material, which is how it has been for centuries.

It also goes to show that the increased availability of student loans strongly correlates to the number of colleges for which the admission standards are little more than the ability to fog a mirror.

PoasterToaster's picture
PoasterToaster (not verified) Oct 31, 2016 5:24 PM

Isn't there some other way to train worker drones for useless paper pushing jobs?

Bob Beachcomber's picture

Many don't like being indoctrinated as a brain dead lib so the education is a waste of money.

ultraticum's picture

You left out the part about what the Government intervention in financing does to price . . . value going down but price increasing exponentially.  Not a sustainable equation.

SMC's picture

"Special snowflakes" need not apply.

Overheard a few young ladies weeks ago saying "Marry into the Trades".  

Those who can "do the dirty deed" such as welding, electrician, plumbing, etc... will always be in demand.

canisdirus's picture

That's funny. I can't imagine that being a popular opinion...

Mind you, it's a very smart move. People in the trades are like doctors (people that can easily become entrepreneurs with incomes linked to actual inflation), but they don't come with big student loan debts and the fields move a lot more slowly (so constant education isn't necessary).

mkkby's picture

Forget the trades as well. Being swamped with so many mexicans, soon nobody will be able to make living.

Seasmoke's picture

Keep churning out those debt slaves at age 23. The Ponzi scam needs more of them.

WTFUD's picture

A Ponzi scheme requires a fresh set of suckers. Unfortunately those suckers have already been fleeced with no disposable income to participate in future would-be 419's as WB7 often refers to.

gimme soma dat's picture

I am alarmed by the number of 22 year old freshly minted real estate agents I've met lately.  For $1500 and 3 weeks you can be a REALTOR®.  Plus the cash paid to all the associations.

 

It's truly a scam. 

ArmyofOne's picture

Its odd that a dual major degree in Womens Studies and Medieval African Poetry can't pull down a six figure salary.   I guess I have to bone up my certifications for fryolator cleaning. 

buzzardsluck's picture

Not to mention the plummeting requirements of acceptance so women and cans are able to finally make the grade.

Stan522's picture

Question: How valuable would a free education be in the market place when it comes to jobs.....?

Answer: Less valuable than it would be today when an individual has to navigate their own way towards completing an education....

 

The bottom Line: Whenever government get's involved with things, the don't think of the unintended consequences. Their solutions more often makes things worse....

Duc888's picture

 

 

If you graduate in anything other than a technical college you are essentially damaged goods.

 

bpj's picture

The revenge effect cubed

WTFUD's picture

If you really want a Free Education look no further than Zero Hedge. Compared to the £9/10k per year for a so-called Top UK Education Establishment it's a no-brain-er. Despite undertaking professional qualifukations, only travel and then later Z/H ( in the main ) have broadened my Horizons.

Aubiekong's picture

We are past devaluation.  We are now into indebtedness indoctrination.  Snowflake mentality and a life of student loans is what you get now...

bobbyjohnson's picture

this article saddens me. i live in the UK, (19 btw), and our student loans are indexed to inflation post 2012?!?!?!!?! Mark Carney is talking about letting inflation run hot?!?!?!? You could never trap me in with that debt trap. it is 3+ plus RPI and if RPI is 2X cpi and it is going 3% this year sometime next year thats 9% in a year and is going skyhigh soon!!!!!

i do feel sorry for them though it will be tough but i don't feel much a at all sorry as you should be able to read and write and atleast attempt to be financially literate.

 

Apprenticeships rule. Hoarding gold silver bitcoin. nom nom nom and hopefully buy me a house some day!

 

Us millenials arent all dumb.

quasi_verbatim's picture

Or possibly Fat Finger Biometrics?

GreatUncle's picture

+1000 Kudos for being awake.

UK too bit older than you though, but conned all my life, thereagain we didn't have the internet and the level of information back then to understand. Go self employed if you can, minimize your economic footprint because what you mention is only the beginning.

If self employed then you can apply all genuine costs against earnings the reason politicians keep self employed status although you pay as taxpayers for them to do fixed time work = when parliament is in session.

bobbyjohnson's picture

this article saddens me. i live in the UK, (19 btw), and our student loans are indexed to inflation post 2012?!?!?!!?! Mark Carney is talking about letting inflation run hot?!?!?!? You could never trap me in with that debt trap. it is 3+ plus RPI and if RPI is 2X cpi and it is going 3% this year sometime next year thats 9% in a year and is going skyhigh soon!!!!!

i do feel sorry for them though it will be tough but i don't feel much a at all sorry as you should be able to read and write and atleast attempt to be financially literate.

 

Apprenticeships rule. Hoarding gold silver bitcoin. nom nom nom and hopefully buy me a house some day!

 

Us millenials arent all dumb.

bobbyjohnson's picture

nah i actually got fairly good grades. However i released really early on that having a piece of paper doesn't substitute against real skills.

 

it's like me having digital skills in a SHTF scenario etc or in industries that don't require me to have those skills anyways 70% do it and i don't like to be a statistic.