Receive daily articles & headlines each day in your inbox with your free ERE Daily Subscription.

Not logged in. [log in or register]

The Obsession with College Degrees: Are Too Many People Seeking a Degree for the Wrong Reasons?

by Jul 2, 2014, 12:40 am ET

Screen Shot 2014-06-22 at 8.46.54 PMI saw an interview with Starbucks CEO Howard Schultz where he announced that the company would pay for most employees to get a degree online from Arizona State University. This seems like a benefit few of the company’s employees would need. Aren’t most of their baristas already people with worthless degrees?

The type I’ve described as Generation U (unemployed and underemployed). But it seems that Mr. Schultz is just echoing a sentiment that suggest that a college degree is required for most people to have a good career. This starts at the very top in America — the White House’s education imperative states that “Earning a post-secondary degree or credential is a prerequisite for 21st century jobs.”

But while a laudable goal, the pursuit of this means ignoring reality.

The U.S. Bureau of Labor Statistics estimates that only 27 percent of jobs in the U.S. economy currently require a college degree. By comparison, the U.S. Census Bureau reports that 47 percent of workers today have an associate degree or higher. The BLS projects that the proportion of jobs requiring a college degree will barely change — increasing to only 27.1 percent by 2022. Even the most optimistic projection – a study from Georgetown University, projects that at most 35 percent of jobs will require a college degree by 2020.

The Skilled Worker Shortage

While we’re pushing more people to get college degrees, we’re also facing a worsening shortage of skilled workers in many categories that don’t require a college degree. In manufacturing, as many as 600,000 U.S. manufacturing jobs remained vacant across the U.S. due to shortages of skilled workers, according to the Manufacturing Institute’s most recent “skills gap” report.

This situation exists across all categories of trades. A study by Manpower Group shows that the hardest segment of the workforce for employers to staff with skilled talent are the skilled trades — the welders, electricians, machinists, etc. who are so prevalent in manufacturing and construction. Far more shortages exist in these categories than in professional jobs like registered nurses or engineers or even web developers. Even jobs like truck drivers are hurting for workers. Nationwide there are about 30,000 unfilled truck driving jobs, according to the American Trucking Association.

And the problem is going to get much worse — the average age of a skilled manufacturing worker in the U.S. is 56. The skilled trades have far fewer 65-and-older workers (1.9 percent) than the total labor force (4.8 percent) — because these jobs are more physically demanding than most others. So many workers in the skilled trades can’t delay retirement because they need the money or like working. They will start to retire in droves within five years.

Vocational School vs. College

The hourly pay for a manufacturing worker is almost $24, compared to about $9 for a barista at Starbucks. Given that spread, one would think more people would seek work in manufacturing than settle for a job making coffee. But we’ve managed to create a culture where a college degree is supposedly a magical ticket to the good life, while vocational education is something to be sneered at. Consequently we now have the average college grad carrying a debt of almost $30,000 upon graduation and outstanding student loans of over a trillion (with a “t”) dollars.

Even among those opting for college about a third pick majors that have very poor job prospects, including social sciences (11 percent), education (6 percent), psychology (7 percent), and visual and performing arts (6 percent). By contrast, only 2.4 percent pick computer science, 5 percent choose engineering, and 1.4 percent graduate with degrees in the physical sciences.

Yet, we do everything possible to encourage people to go to college, whether it works or not. The federal Pell Grant program in the U.S., intended to help low and moderate-income students finance college — costs over $35 billion annually, though almost 40 percent of Pell Grant recipients never graduate.

The German Model

It doesn’t have to be this way. Germany has a very successful system that directs high-school students into vocational education, for the ones who don’t need, don’t want, or don’t have the aptitude for college. Yes — there are many who don’t. Imagine that! This approach recognizes that everyone won’t benefit from college, but they can still be successful and contribute to society. The country has a system in place to make this work — a partnership of employers and unions with government — to match students with the right vocation and provide the necessary training.

The benefits of this system are very visible. Few Germans find themselves unemployable. The youth unemployment rate in Germany is just 7.2 percent, well below that of the U.S. (16.2 percent). Overall unemployment in Germany is just 5.4 percent. A majority of German students (52 percent) opt for vocational training.

We, on the other hand, seem determined to perpetuate the illusion that a college degree should be the goal for all. But we may be able to solve the problem another way: Washington State has now mandated that minimum wage will rise to $15. So those baristas in Starbucks’ hometown will get more competitive with manufacturing workers after all.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • http://www.verticalelevation.com/ Carol Schultz

    This is a great, and timely, article Raghav. I think the biggest issue is that people think manufacturing jobs or for someone else, not them. How much of this attitude has to do with this generation’s sense of entitlement I wonder?

    There was a 9 minute conversation related to this issue on Morning Edition today: http://www.npr.org/2014/07/02/327058018/a-lost-generation-of-workers-the-cost-of-youth-unemployment

  • jacque vilet

    I totally agree with you Raghav. When I was in high school there was a vocational training track for the very kids you talked about. BUT it got yanked and called “discriminatory” because most of the kids in that track were minorities. No matter that they didn’t have the aptitude for college nor could they afford it (this was long before government grants).

    Then comes “No child left behind” which became the mantra of politicians. It said every child deserved to go to college period. So they went to college and the government grants started. We have kids that aren’t qualified looking for jobs —- don’t get me wrong these are kids of all color, race, gender, etc. I am taking a graduate course where the students can’t spell or make a complete sentence.

    Lots of countries have tests in high school that determine whether a child is college material. If not, like Germany, they’re directed into vocational programs. In China kids take a test and the results determine which college they go to.

    Now I ask you —- do you really think that work in the U.S.

    I think that people in government know all this are too chicken to be honest with us — particularly about the kinds of jobs that will dominate in the future. They’re trying to perpetuate the myth that if you go to college you will have a great job.

    At some point the truth will come out. Until then don’t look for vocational tracks or relief from the “rah, rah college” mantra to go away.

  • http://www.medievalrecruiter.com/ Medieval Recruiter

    The government pushes the myth of degree=great job because they’re the ones funneling massive amounts of money into the system to pay for those degrees, which not only provides jobs for those who directly and indirectly are involved on the public side, but also for those schools that see much higher enrollment rates than they otherwise would. The sky rocketing tuition costs are at least in part, and I would say mainly, due the the massive amount of money being poured into that system in the form of loans and grants and subsidies. If schools had to answer for the kids they taught, or to them and their parents, you’d see much more in the way of practical, realistic options being presented.

    As for “this generation’s” sense of entitlement, it’s BS, and no more than the usual ‘kids these days’ crap that has pervaded every society through out history. If there is any appreciable difference between this generation and the ones that came before, it’s that “this generation” is well aware that the promise of a pension, social security, and a 401K to retire on is largely a lie, and they have decided they want to get paid now, and not to settle on a future promise which never materializes.

    They have seen the ridiculous idiocy of treating modern office workers like 19th century factory workers, and they’re already sick of it and justifiably so. They don’t see why they should have to work a 9-5 grind in some cubicle farm when they can accomplish as much if not more in other settings and circumstances. Nor do they see the sense, or the connection to their performance, of an HR drone hovering over every move they make, documenting their time to the second, and threatening to fire them if, God forbid, they need an extra thirty seconds to go to a doctor’s appointment, using insurance their company no longer provides, and it’s not in their ‘bucket’ of ‘allowed’ time. They’re sick of working for companies that routinely cut benefits, recommend they ‘stay home’ when sick, and yet gives them the lowest amount of off time to use in the entire civilized world outside a God damn Malaysian sweat shop.

    ‘This generation’ has heard nothing but encomiums galore from their parents about their grandparents, and yet their parents and grandparents gave ‘this generation’ the moronic policies that lead to our current economic situation, sent more than a few thousand of ‘this generation’ to their graves and crippling injury in idiotic and senseless wars, and then stood by while the people who crashed and burned their financial futures got 500K bonuses and government bail outs while ‘this generation’s’ parents accepted the fact that they’d be working into their 80s and living with their kids instead of enjoying their golden years as planned.

    ‘This generation’ isn’t entitled, they’re more clued into reality than any other generation before them, and far less likely to accept the usual platitudes as to why they have to continue to live at subsistence levels while an ever increasingly small portion of the population keeps mutilating everyone else’s finances and walking away without consequence, and often with rewards, for utterly screwing as many people as possible.

    ‘This generation’ had absolutely jack @#$% to do with creating the world it lives in, so I think until the previous generations own their perpetual and ever increasing list of screw ups’ and apologize and make amends for them, then ‘this generation’ is more than entitled to point out how utterly full of crap every other generation is and has been.

    ‘This generation’ is sick of being told to put their health first and then asked to sit in a chair for 16 hours a day, never moving, working through their breaks, and barely getting paid enough to afford a place to live. ‘This generation’ is sick and tired of seeing some of its best being killed in foreign wars that never should have happened, and which have been perpetuated by BOTH major political parties in the US. ‘This generation’ is sick of being told their reward for their hard work is somewhere in the future. ‘This generation’ saw their parents’ generation buy that line and end up empty handed. ‘This generation’ is sick of hearing about all the incredible technological advances and possibilities for increased productivity, and then being asked to clock in and out like a moron and then spending well over half their lives confined to a cubicle, grinding and grinding away to produce ever more and more work, when they long ago produced what they were expected to and paid for. ‘This generation’ wants to be paid fairly, to have a reasonable amount of time off and a work life balance approaching something sane, because they’re NOT going to emulate their parents and slave away all their lives for a dream and a promise that will NEVER be delivered upon.

    But, more than anything else, ‘this generation’ is quite frankly sick of listening to the generations that came before them calling them ‘entitled’ when it is those generations that screwed everything up in the first place for a quick, easy buck at the expense of the future well being of the economy, and even the entire damn planet in some ways. I’d recommend that previous generations get their #$%^ together and correct the problems they caused before they start bitching and moaning about the ‘entitlement’ of ‘this generation.’

  • State of Irrelevance

    Same problem occurring in Australia today, so instead we import skilled labour and leave our well educated kids on the dole.

  • StevenRothberg

    I find it ironic and somewhat disturbing that the loudest voices against higher education are those whose career paths were benefited by them obtaining the very degrees they claim are worthless for others. These are often also the same people who advocate for the elimination of government programs which benefit lower income children and adults on the theory that those people will be more likely to lift themselves up if society makes life painful enough for them. Over time, I look forward to more people understanding that a hand-up is not the same as a hand-out.

  • http://www.EngineeringReferral.com Doug Friedman

    Today’s jobs report indicated that unemployment for workers with a bachelor’s degree is 3.3% versus 6.1% across the board. Pew research recently reported that college graduates between the ages of 25 to 32 working full time earn about $17,500 more annually than employed young adults with just a high school diploma ($45,500 vs. $28,000). Those with a two-year degree earn about $30,000. In 1965, the inflation-adjusted gap in this age group between college versus high-school was about $7,500. So the data actually supports the idea that a college degree has become significantly MORE important.

    @ Keith Halperin – Excellent points. Very well put. Interesting about Germany. I think your “negative hurdle” comment is right on.

    @ Steven Rothberg – I agree.

    Doug Friedman
    EngineeringReferral.com
    My LinkedIn Profile

  • Keith D. Halperin

    @ Doug: Thank you.

    @ Steven: Well-said. It also seems that these college critics propose another track for other people and their children, but rarely for themselves and their children.

    @ Jacque: Well-
    said. When I read where authors advise on how best to provide special “care and feeding for the Millennials”, I conclude that the only people more out of touch than the authors are the people who give any credence to what the authors say.If you want to get a hard-working, competent Millennial workforce, then offer FT, well-paid, well-benefitted positions. If you want to have a Millennial workforce who’ll build you a grand temple and worship you, offer to assume their student loan payments for the length of their employment with you.
    Happy 4th, ‘Cruitaz!

  • gigi2landon

    Let’s see – I cannot outsource my plumbing, nor can I outsource my car repairs, my new deck cannot be built without skilled trades persons, the new brick fireplace, the new wiring in my old home or someones new home requires skilled trades persons. There is an argument for vocational training and by the way that is an advanced education………I can’t plumb, do electrical work, build a fireplace, work on my car, etc.

  • http://www.medievalrecruiter.com/ Medieval Recruiter

    Technically, you do outsource those jobs. Economically speaking, there’s no difference between paying the guy down the block to do something as opposed to a guy in Mexico, or China. Politically there’s a massive difference, as far as the laws of economics go, anything you can do for yourself that you choose to pay someone else to do is ‘outsourcing’. The real question is how on God’s green earth did the current system get so messed up that it became more economical to manufacture simple things thousands of miles away and then ship them in on boats that burn bunker oil by the ton.

    There’s certainly a disdain toward skilled trades in the US, though. I myself used to feel that way when I was way younger and way dumber. These days, I’d happily trade my BA for a four years experience apprenticing as a welder.