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Economy

Degree Inflation: B.A. Now Required Even for File Clerks

by Nathan Harden - Fix Editor on February 20, 2013

The New York Times is running a story today on a problem that we all know exists. And it seems to be getting worse, not better.

The college degree is now the equivalent of a high school diploma–increasingly, it’s a basic requirement for jobs that actually do not require advanced education. And all of the debt and time that goes into obtaining a degree is a burden that even low-paid office workers must now bear.

Imagine racking up $30,000 in college debt so that you can get a $10 per hour job as an office courier. When will the madness end? Here’s an excerpt:

Consider the 45-person law firm of Busch, Slipakoff & Schuh here in Atlanta, a place that has seen tremendous growth in the college-educated population. Like other employers across the country, the firm hires only people with a bachelor’s degree, even for jobs that do not require college-level skills.

This prerequisite applies to everyone, including the receptionist, paralegals, administrative assistants and file clerks. Even the office “runner” — the in-house courier who, for $10 an hour, ferries documents back and forth between the courthouse and the office — went to a four-year school.

“College graduates are just more career-oriented,” said Adam Slipakoff, the firm’s managing partner. “Going to college means they are making a real commitment to their futures. They’re not just looking for a paycheck.”

Economists have referred to this phenomenon as “degree inflation,” and it has been steadily infiltrating America’s job market. Across industries and geographic areas, many other jobs that didn’t used to require a diploma — positions like dental hygienists, cargo agents, clerks and claims adjusters…

You have to ask yourself: Why?

Is this simply because Americans have bought into the idea that a college degree = financial security? If so, than the bachelor’s degree is less likely than ever to deliver on such a promise. Ironically, degree inflation has a kind of self-perpetuating effect on the labor market. Those without a B.A., as the NY Times, points out, are being pushed even further down the food chain.

Now high school graduates are being told that they are unqualified for jobs that they used to be able to get. So the pressure to get a B.A. is higher than ever. Yet, because everyone is getting one, the actual market value of a degree is diminishing relative to others in the market (who also almost all have B.A.’s). It’s a vicious cycle. The only winners are the high-paid college administrators and faculty who are making themselves, in many cases, quite wealthy off of the tuition dollars of young people who are destined for low-paying, entry level jobs.

It’s time for employers to wise up and offer talented workers an alternative path to meaningful careers. What if a few innovative companies, say in the technology sector, for instance, started hiring ultra talented students directly out high school with the promise of good pay and upwardly mobile career paths? That might shake things up.

Wouldn’t you know it–it’s already beginning to happen, as the San Antonio Express-News reported in this story last year:

“Information technology is so big and open and there are so many jobs, they are paying an 18-year-old good money to do this work,” said Ricky Banda, who graduated in May from Southwest High School and is already working full time in the field.

After Banda was part of a team that brought home a prize in the CyberPatriot national high school cybersecurity competition, the Air Force picked him up for a network security defense analyst internship his senior year. He made $12 to $13 an hour — with a government security clearance — at 17. Now with a high school diploma and multiple security and networking certifications, he’s making $43,000 a year interning with Northrop Grumman.

In a similar vein, billionaire Paypal founder and Facebook investor Peter Thiel has gained a lot of attention with his program to pay talented students $100,000 to drop out of college and found tech start-ups.

Mark my words–we’ll see much more of this kind of thing in the future.

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American Dream Fades for Generation Y

by Nathan Harden - Fix Editor on December 24, 2012

Of all college grads since 2006, only a little over half are working full time. And over the course of their lives, only a fifth of young people today expect to do better than their parents. Eliot Blair Smith writes for Bloomberg, saying that the American Dream–the idea that each generation will do better than its parents–has all but disappeared:

After being dismissed from her job as a Midtown Manhattan securities attorney in October 2009, Christina Tretter-Herriger hitched a used horse trailer to her Dodge Ram pickup and drove 1,628 miles to Texas.

The 32-year-old lawyer sold skin-care products in Houston before finding work as the assistant general counsel of a futures-trading firm where an irate customer punctuated a recorded voice-mail message with gunfire.

“No one was left with the impression that he just happened to be phoning from a sporting clays range,” she says.

Eighteen months and two busted jobs later, the daughter of a retired physician and a former editor at Vogue circled back to upstate New York and hunkered down at a small legal office that pays about one-quarter of her former $165,000 salary.

Generation Y professionals entering the workforce are finding careers that once were gateways to high pay and upwardly mobile lives turning into detours and dead ends. Average incomes for individuals ages 25 to 34 have fallen 8 percent, double the adult population’s total drop, since the recession began in December 2007. Their unemployment rate remains stuck one-half to 1 percentage point above the national figure…

“This generation will be permanently depressed and will be on a lower path of income for probably all of their life — and at least the next 10 years,” says Rutgers professor Cliff Zukin, a senior research fellow at the university’s John J. Heldrich Center for Workforce Development. Professionals who start out in jobs other than their first choice tend to stay on the alternative path, earning less than they would have otherwise while becoming less likely to start over again later in preferred fields, Zukin says.

Michael Greenstone, who was chief economist at the White House Council of Economic Advisers in 2009 and 2010, says the shift to a downwardly mobile society may be lasting. “Children are not earning as much as their parents, and I think we’re laying the seeds for that to continue into the future,” he says.

Read the full story here.

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Screwed: Unemployment Reaches 10.9% for Ages 18-29

by College Fix Staff on December 8, 2012

Polls show that young people, African-Americans and Hispanics voted for Obama by wide margins. Ironically, those groups are suffering more under the Obama economy than other Americans.

  • The overall unemployment rate for 18-29 year olds for November 2012 is 10.9 percent (NSA).
  • The unemployment rate for 18-29 year old African-Americans for November 2012 is 18.5 percent (NSA); the unemployment rate for 18-29 year old Hispanics for November 2012 is 12.5 percent (NSA); and the unemployment rate for 18–29 year old women for November 2012 is 10.5 percent (NSA).
  • The declining labor force participation rate has created an additional 1.7 million young adults that are not counted as “unemployed” by the U.S. Department of Labor because they are not in the labor force, meaning that those young people have given up looking for work due to the lack of jobs.
  • If the labor force participation rate were factored into the 18-29 unemployment calculations, the actual Millennial unemployment rate would rise to 16.4 percent (NSA).

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In Foreign Policy Debate, Economy Takes Center Stage

by Michael Sorge - SUNY Purchase on October 23, 2012

With serious conflicts brewing internationally, Monday night’s debate represented an opportunity for both presidential candidates to hash out their differences on Libya, Iran, and a multitude of other foreign policy problems America faces. Instead the third and final presidential debate featured the U.S. economy on center stage once again.

What transpired represented a striking difference from the previous debates, as both Barack Obama and Mitt Romney took on more conciliatory tones and commended each other, at times.

The first debate was characterized by a sleepy and unenthusiastic performance by Mr. Obama. The second featured a tense scuffle over national and international issues. But agreement was the theme Monday night.

Candidates generally agreed on the path ahead for the war in Afghanistan and on the scope of other threats facing the nation. Yet, on the economy, all the agreements came to an end.

Mr. Romney took a swing at Mr. Obama’s economic record. “In order to be able to fulfill our role in the world, America must be strong. America must lead. And for that to happen, we have to strengthen our economy here at home. You can’t have 23 million people struggling to get a job,” he said.

Mr. Obama said he was, “making sure that we’re bringing manufacturing back to our shores so that we’re creating jobs here, as we’ve done with the auto industry… including retraining our workers for the jobs of tomorrow; doing everything we can to control our energy.” The moderator, Bob Scheiffer, even had to remind both men to get back to foreign policy.

Mr. Romney showed poise in an attempt to convince viewers that he is capable of being a strong commander-in-chief and resisted attacking his rival personally. However, Mr. Obama seemed bitter at times and wasted no time by attacking his GOP opponent in his first answer saying that Mr. Romney’s foreign policy was “all over the map.”

Unlike the last debate which had a turbulent exchange over Libya, Mr. Romney did get heated when Mr. Obama took out of context a statement he made saying that Russia was America’s main geopolitical foe. Mr. Romney corrected the misrepresentation saying that there was a difference between “geopolitical” and national security threats.

Beside the turmoil in the Middle East, China and Russia came under criticism from the candidates for their pattern of blocking American diplomatic moves.

Throughout the night it appeared the Romney camp had made a strategic decision to consistently connect America’s foreign policy under President Obama to the struggling situation of the economy at home, hoping that voters would ultimately conclude he was more fit to handle both.

“You can’t have kids coming out of college, half of whom can’t find a job today, or a job that’s commensurate with their college degree,” Mr. Romney declared.

Fix contributor Michael Sorge is a student at SUNY Purchase.

(Image by Jon Satch Satriale / Flickr)

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Debate Wrap-up: Romney Dominates on Economic Issues

by Michael Sorge - SUNY Purchase on October 17, 2012

According to a CNN poll of registered voters, in Tuesday night’s debate Romney scored big wins on the economy (58-40%), taxes (51-44%), and the deficit (49-36%). In an election year in which the struggling economy is a leading issue of voter concern, those numbers are bad news for Mr. Obama.

The post-debate analysis and spin varied widely. Focus groups assembled by Fox News and MSNBC both declared Mr. Romney the victor. But CNN reported that Obama won the overall debate according to 46 % of likely voters watching, while Romney was the winner according to 39 %.

With the economy’s travails and the Obama administration’s response to the attack in Libya looming as major issues, the two presidential candidates squared off at Hofstra University in Hempstead, Long Island for a highly contentious debate.

Before the debate, analysts and pundits on both sides of the ideological spectrum predicted that Mr. Obama would be more enthusiastic, in contrast to his previous lethargic performance, and that he would nevertheless have to remain calm and polite. What actually took place was a feisty battle that contradicted the long held idea that it was difficult for candidates to go on the offensive in a town hall-style debate.

Mr. Romney and Mr.Obama vigorously attacked each other’s records, future plans, and character. At times they invaded each other’s personal space looking as though at any moment they could start a wrestling match.

Mr. Obama clearly was able to summon the level of passion that he lacked in the previous debate. In his first question to answer he attacked Mr. Romney and never ceased for the remainder of the night.

Yet on question related to the economy, Mr. Romney scored the most blows. In the first question, directed to Mr. Romney, a college student asked how he would help fellow college students secure jobs. Mr. Romney answered saying that he was in favor of increasing Pell Grants and touted his record of achievement in education in Massachusetts as proof that he could faithfully represent college students in a tough economy. He argued that a better economy would naturally be beneficial for college students.

Mr. Obama used his turn to attack Mr. Romney for his support of allowing General Motors to enter bankruptcy, while he largely ignored the question of how he would help college graduates get jobs.

In a segment of the debate that crystallized the debate’s tone and overall substance, both presidential candidates lambasted each other on the contentious issue of Libya. Mr. Obama called the GOP assertion of a cover-up “offensive.” However, the president failed to answer the actual question, and did not say why requests for additional security at the Benghazi consulate were denied in the months leading up to the attack.

Romney missed an opportunity to attack Obama on his failure to provide adequate security in Benghazi, and instead got caught up on the issue of whether Obama had called it a “terrorist” attack or not. After the debate, moderator Candy Crowley said that although the point Mr. Obama made about his statements the day after the attack was, narrowly, correct, Mr. Romney was correct on the larger issue of how long it took the Obama administration to mount a forthright, coherent response.

Staging was awkward at times for both men, as Mr. Obama and Mr. Romney closed in on each other in a battle about coal and energy. The fact that these two men have an uncanny ability to get under each others skins was obvious to viewers. Greta Van Susteren, of Fox News, said in a tweet that the “spat… felt uncomfortable to watch.”

Mr. Obama, often angrily, attempted to eviscerate the Romney plan on growing the economy. He bolstered his case by lamenting Mr. Romney’s lack of specifics on exactly what “loopholes and deductions” he would deal with. However, he did not mention his own lack of specifics. And polls indicate that he failed to convince viewers that, after four years of trying, he has a viable plan to turn the economy around.

Fix contributor Michael Sorge is a student at Purchase College, State University of New York.

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Stork-less

by College Fix Staff on August 27, 2012

Americans are having fewer babies and it’s seriously cramping our style, economically speaking:

The population increased by 0.92 percent, or 2.8 million people, to 311.6 million from the end of the decennial population count on April 1, 2010, to July 1, 2011, the slowest rate over a similar period since the mid-1940s, the Census Bureau said.

The number of births fell to 3.96 million in 2011, and it may fall again this year to 3.94 million, forecaster Demographic Intelligence predicted in July. “A culture of risk aversion among young adults” is behind the drop, the Charlottesville, Virginia-based firm said.

“Population is a very strong motivation for consumer spending,” said Chris Christopher, director of U.S. and global consumer economics research at IHS Global Insight in Lexington, Massachusetts. “Weak population growth due to fewer children will play itself out in years to come.”

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