Jobs data cannot prove that college is a “good investment”

I’m writing this during a very cold, snowy day in central North Carolina, but will imagine that instead it’s one of our summer heat waves. For several days in a row, the temperature has hit 99 degrees, and someone comments, “Well, this certainly ought to shut those global warming skeptics up!”

Argumentation of that kind is common in the global warming debate, but the reasoning is fallacious. Pointing to a spell of hot weather no more disproves the case against global warming than a spell of very cold weather disproves the case for it. Short-term fluctuations cannot prove or disprove arguments about long-term conditions or trends. Passionate people, however, often put good reasoning aside when they think they can score a point.

A perfect example of that is a recent Inside Higher Ed article entitled “The New Bachelor’s Payoff” by Paul Fain. He begins with this throwing down of the gauntlet: “Doubts about the labor market returns of bachelor’s degrees, while never serious, can be put to rest.”

I have long been one of those doubters, so that caught my attention. 

Exactly what is it that now proves that my doubts were never serious? Answer: last month’s federal jobs report. Fain writes about “a rock-bottom unemployment rate of 2.8 percent for workers with four year degrees or more” in comparison with the overall unemployment rate of 5.7 percent. 

That’s the equivalent of the heat wave that supposedly disproves the global warming skeptics.

Let’s assume that the government’s unemployment figures are accurate (often, they have to be revised) and also that they correctly measure the degree of unemployment (even though they leave out all those who might want to work but have become so discouraged that they have dropped out of the market). Does the low unemployment rate among college graduates prove that the cost of earning their degrees was time and money well invested? Does it refute us doubters?

Absolutely not. Simply being employed in some job doesn’t mean that a college graduate is receiving any added compensation—any “return” on his degree. Many graduates are working in jobs where their education is mostly if not entirely irrelevant. For example, roughly half of the people driving for Uber are college graduates, but they aren’t paid any more on account of their educational credentials. 

All that the favorable job statistics for college graduates tell us is that having a degree positions you better in the job market compared with people who do not have those credentials. Many employers who need workers for jobs that require only basic abilities and a decent attitude now screen out people who don’t have college degrees. Companies looking to hire for positions such as sales supervisor and rental car agent, for instance, often state that they’ll only consider applicants who’ve graduated from college. What they studied or how well they did is largely beside the point.

The college degree has become so ubiquitous that many companies know they can fill their needs without interviewing applicants who are presumably less capable and somewhat harder to train just because they haven’t been through the college mill. Consequently, people without degrees are increasingly confined to the shrinking, low-pay sectors of the labor market—unless they can succeed in one of the remaining fields where ability counts for everything, such as entrepreneurship, sports, and entertainment.

Pointing to the better employment prospects for people who have a college degree is irrelevant to the cost-versus-benefit debate. The college grad group contains most of the highly skilled, ambitious segment of the population, while the non-college group contains many of the least skilled and ambitious. Moreover, a great many jobs are foreclosed to those without degrees, while there is no corresponding discrimination against workers with them. Of course grads have higher employment rates, but that isn’t in dispute.

I am certainly not denying that many young Americans make great “human capital” strides as a result of their college studies. The point that the Pope Center and other doubters have been making, rather, is that we have so oversold higher education that a high percentage of students gain little or nothing from college except debt.

The individual who studies, say, chemical engineering and thereby acquires the essential background for a career in that field probably gets a splendid return on the time and money spent on college. But on the other hand, the individual who leaves high school with weak skills and scant interest in academic work, enrolls in school with low standards (perhaps a “party school”), chooses an easy major and breezes along to a degree four or five years later is likely to end up working in a low-skill job that an intelligent high schooler could do. That person, even though employed, is getting a negligible return—possibly even negative—on his college investment.

For those who aren’t sure if this is a serious problem, I suggest reading Aspiring Adults Adrift by Richard Arum and Josipa Roksa, which I reviewed here. That book, along with their earlier book Academically Adrift, reinforces what many professors have been saying for years: Students can get through college without learning much.

I have frequently quoted this passage in How to Succeed in School Without Really Learning by Professor David Labaree and will do so again because it’s so pertinent to this debate: 

The difficulty posed by (the glut of graduates) is not that the population becomes overeducated (such a state is difficult to imagine) but that it becomes overcredentialed, as people pursue diplomas less for the knowledge they are acquiring than for the access that the diplomas themselves provide….Consumers have to spend increasing amounts of time and money to gain additional credentials because the swelling number of credential holders keeps lowering the value of credentials at any given level…Employers keep raising the entry-level education requirements for particular jobs, but they still find that they have to provide extensive training before employees can carry out their work productively. At all levels, this is an enormously wasteful system.

That was written in 1999, but if anything the wastefulness of our system, fueled by easy government money enabling almost everyone to go to college, has increased over the last sixteen years. 

We contend that for a great number of Americans, college degrees are just over-priced credentials that do little good, either for their minds or their wallets. Fluctuations in employment data are as irrelevant to our case as heat waves or blizzards are to the global warming debate.