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A costly way to identify intelligence

June 29, 2011 By

Most people don’t need a college education to do their job, but they need a degree to get hired, writes Daniel Indiviglio in The Atlantic. It’s a very expensive way to identify who’s smart enough to do a job, he writes.

. . . when high school standards declined and college became more popular, some applicants stood out above others as being more educated and potentially smarter than those with only a high school diploma. If the trend keeps up, however, a time will come when a college degree isn’t enough either: masters degrees will be commonly sought, as the value of college degrees fall to be worth as little high school degrees are today, since so many applicants will have them. If this trend keeps up forever, perhaps we’ll one day have locksmiths with PhD’s.

Waitresses with a college degree earn more money, but it’s probably not the degree, argues Andrew Gillen.

College is the best investment on the market (for those who complete a degree), counters  Derek Thompson, also in The Atlantic.  Over a working lifetime, “the typical college graduate earns $570,000 more than the average person with only a high school diploma.”

Let’s say you’re deciding where to invest $100,000 at age 18. Maybe you think to put it in gold, corporate bonds, U.S. government debt, or hot company stocks.

The $102,000 investment in a four-year college yields a rate of return of 15.2 percent per year, more than double the average return over the last 60 years experienced in the stock market” and more than five times the return in corporate bonds, gold, long-term government bonds, or housing, according to a report by Michael Greenstone and Adam Looney.

Note that the associate degree’s rate of return is 20 percent, higher than the pay-off for the  bachelor’s degree. I’d guess that’s because the costs of attaining the degree are lower and many associate degrees go to nurses, who make good money.

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Graduates still have an edge

June 4, 2011 By

The Great Recession has cut earnings and employment rates for recent college graduates, concludes a Brookings Institution study. But college graduates still do significantly better than less-educated workers.

Looking at people aged 23 and 24 and in the workforce,  88 percent of college graduates were employed in 2010; average weekly earnings were $581, including those out of work.  That compares to a 79 percent employment for people with “some college,” 64 percent for high school graduates and 43 percent for high school drop-outs.

Iowahawk is less optimistic about the future for college graduates.

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$1 trillion in debt for branding?

April 17, 2011 By

“Student loan debt outpaced credit card debt for the first time last year and is likely to top $1 trillion this year as more students go to college and a growing share borrow money to do so,” reports the New York Times. It’s supposed to be “good debt,” an investment in the future. Like mortgages.

“In the coming years, a lot of people will still be paying off their student loans when it’s time for their kids to go to college,” said Mark Kantrowitz, the publisher of FinAid.org and Fastweb.com, who has compiled the estimates of student debt, including federal and private loans.

It’s about branding, not education, writes entrepreneur Seth Godin. A college diploma “brands” the graduate as employable.

Does a $40,000 a year education that comes with an elite degree deliver ten times the education of a cheaper but no less rigorous self-generated approach assembled from less famous institutions and free or inexpensive resources?

That $1 trillion in debt is a lot to spend for marketing.

What would happen if people spent it building up a work history instead? On becoming smarter, more flexible, more self-sufficient and yes, able to take more risk because they owe less money…

I don’t worry about students who can get into elite colleges. They’ll get an education — and a high-class brand. It’s the students borrowing for non-elite private colleges who are at risk of going into debt for a brand of marginal value. Will they get an education? Depends on the student.

I have a nephew who’s graduated in computer science and a niece who’s about to earn a degree in cognitive science. Both are job hunting. So this cartoon hit home.  (Click on it to get a larger version.) Via Instapundit.

Pearls Before Swine at comics.com.

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Economists see fewer middle-income jobs

September 12, 2010 By

Economists predict a split job market — once employers start hiring — with well-paid jobs for the educated (lawyers, scientists and software engineers) and low-paid jobs for the low-skilled (store clerks and home health aides) and not much for folks in the middle.

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Parents subsidize 'kidadults'

May 4, 2010 By

More parents are subsidizing their “kidadults” through their 20s and longer, reports the Arizona Republic.

Research from the University of Michigan indicates that 56 percent of young adults are living a life of quasi-independence. They have jobs and their own homes but they still get help from their parents when the bills come in.

Young people are staying in school longer, then struggling to find jobs, earn a living and pay off college loans. They’re marrying later and having children later than earlier generations. And they’ve got “helicopter parents.”

“Parents want to have more control, they want to be involved, and in general young people welcome it,” said Patricia Somers, an associate professor of education at the University of Texas-Austin who studies family dynamics.

The recession has made it harder for young people to “launch.” From 2006 to 2010, the employment rate for 18- to 29-year-olds fell by nine points,  reports the Pew Research Center. Employment held steady or rose slightly for those 30 to 64 years old. Young workers are earning less.

The annual earnings of all full-time workers ages 25 to 34 have decreased since 1980, when adjusted for inflation, according to the U.S. Department of Education.

While college graduates earn more and are more likely to be employed, their debt load is increasing: In 1993, the average graduate owed $9,297; by 2008, the average debt was $23,118.

Update: A Brookings study on The Long and Twisting Road to Adulthood estimates that parents spend 10 percent of their income “helping their children begin adult lives.” The percentage of 25-year-olds living independently dropped sharply from the 1970s to the turn of the 21st century.

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Ain't no cure for the summertime blues

July 7, 2009 By

Well-paying summer jobs and prestigious internships have vanished, reports the New York Times. Parents can’t afford to fund “art tours of Tuscany” for college students. The young are getting restless.

To a high-achieving generation whose schedules were once crammed with extracurricular activities meant to propel them into college, it feels like an empty summer — eerie, and a bit scary.

“Things have changed drastically,” said Ron Alsop, author of “The Trophy Kids Grow Up: How the Millennial Generation Is Shaking Up the Workplace,” a book that only last year portrayed young workers as entitled and in a hurry. “It has to be a huge wake-up call for this generation.”

Numbers provide the backdrop to the story — not just the grimly familiar national unemployment rate, 9.5 percent in June, but the even scarier, less publicized unemployment figure for 16- to 19-year-olds, which has hit 24 percent, up from 16.1 percent two years ago. Internships available to college students have fallen 21 percent since last year, according to the National Association of Colleges and Employers.

Stop blaming parents for young workers’ sense of entitlement, writes Jessica Grose at XX Factor. It’s the economy, stupid.

For a while now, Generation Y has been portrayed as a bunch of sneaker-wearing lazybones who skateboard to the office and demand a four-day work week. But I would argue that the way Gen-Y workers used to behave had nothing to do with indulgent parents who told us we were infallible. The way young workers behaved in the first half of the decade had everything to do with the economy. In the mid-aughts, people of all ages were being entitled and demanding of their employers … because they could be. In a market where jobs are abundant, it’s logical for workers to try to get the most perks possible—whether or not their Mommies told them they were special.

By the way, federally funded retraining doesn’t help older workers get new jobs or increase their pay, concludes a Labor Department study. I remember similar results in the ’80s. Job training is very hard to do effectively; it’s even harder to predict the real “jobs of the future.”

Funemployed? Take a starve-cation, advises Iowahawk.

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Good jobs, bad jobs

January 8, 2009 By

Mathematician is the best job, according to careercast.com.  Lumberjack is the worst, just a hair better than dairy farmer or taxi driver.

From the Wall Street Journal:

According to the study, mathematicians fared best in part because they typically work in favorable conditions — indoors and in places free of toxic fumes or noise — unlike those toward the bottom of the list like sewage-plant operator, painter and bricklayer. They also aren’t expected to do any heavy lifting, crawling or crouching — attributes associated with occupations such as firefighter, auto mechanic and plumber.

Other jobs at the top of the study’s list include actuary, statistician, biologist, software engineer and computer-systems analyst, historian and sociologist. There seems to be a bias towards desk jobs.

Some of the low-scoring jobs were a surprise. Nurse? Well, there’s lots of stress and some physical exertion, but the pay is high. Is EMT a bad job while parole officer is a good job? If firefighter is such a bad job, why do so many people want to do it? Some people like to be active; some like stress.

In other career news, applicants for retail jobs are finding ways to cheat on personality tests, reports the Journal.  Some take the test multiple times, get advice from a friend who passed, look for answer keys online or get a friend to take the test for them. In your free time, do you prefer to stay home or go out? Do you think other people’s feelings are their own business? Are you bothered when something unexpected interrupts your day?

I took a personality test in 1978, when I applied for a lousy job at a local newspaper. It went on so long and repeated so many questions that I got too tired to remember my lies.  But they did call me in for an interview, so I guess I have a personality.

When I was hired by the San Jose Mercury News, I never took the personality test. My boss was too new to know he should send me through HR. Colleagues said they’d been asked whether they’d rather be a snake handler or a trapeze artist. I’m still pondering that one.

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