Is College a Root Cause of Unemployment?
While Hillary Clinton has spoken extensively about higher education, tuition costs and student debt and Donald Trump has lambasted government profiteering of student loans, neither candidate even mentioned the true crisis in higher education: colleges and universities fail to prepare students for the real world of jobs, careers – or even pocketbook economics.
While college is the “new normal” for the middle and even lower middle class, more than half of recent graduates are considered underemployed by the U.S. Department of Labor. Millennial unemployment is 12 percent and a stunning 51 percent report being “under-employed,” according to consulting firm Accenture.
Driving students into four-year programs and others into two-year community colleges also drove student debt to a stunning $1.3 trillion, a mountain of obligations made unimaginably worse by bleak career prospects for those on the hook. Even post-recession, many of my peers have only been able to find jobs as baristas, driving for Uber or picking up groceries for Task Rabbit. Their earnings barely house, clothe and feed them, leaving little to no room for debt service. Here, their arts history degrees aren’t much help.
Today’s millenials face a perfect storm: too often we leave or dropout of college without basic financial literacy, which schools should require but don’t, little to no understanding of the job market and skills that don’t meet the demands of the current economy. Only recently has STEM, or science, technology, engineering and math, become part of the education lexicon. Students in STEM find jobs faster, earn more and can anticipate favorable job prospects for decades to come. The rest of us are left with debt and nowhere to apply our 19th Century comparative British literature expertise.
Higher education, and the government that regulates it, have failed to keep pace with the world we live in — this is our generational crisis, and it requires immediate action. It’s difficult to take action when politicians, let alone education administrators, are not even talking about the roots of the income inequality, student debt, unemployment and labor force participation rate problems we face.
To start, it’s time to add the “hard sciences” into the core curricula. Energy companies need engineers and coders more than pipe-fitters and even the news media need data scientists as they lay off traditional journalists. As Bentley University President Gloria Larson has recognized: “In today’s job market, employers are looking to fill positions with multi-faceted employees who possess technical skills.” Redefining our core education will prevent legions of degreed students graduating without job prospects that meet their level of education.
Today, Economics 101 still looks like it did for our grandparent’s generation, a debate between 19th Century concepts of communism versus brass-era industrial capitalism. Millennials are coming of age in the “New Economy” — where personal finances are complicated, sometimes automated, and impacted by an economy in flux. Beyond STEM, universities must integrate a “core” fiscal policy and personal finance education that addresses the changing landscape.
It’s time we hold our colleges and universities accountable for their outcomes in achieving career success for their graduates, measured against debt incurred or parental support. Students and families spend tens of thousands of dollars in tuitions and fees annually only to find they need to pay Udacity, General Assembly, or Galvanize to find the careers they deserve. Companies such as these, provide a much needed service of making graduates employable by teaching them hard skills such as coding, UX Design, and now even self-driving car engineering but often at a cost upwards of a college degree itself.
Too many students enter higher education only to realize they cannot afford to stay or that institutions are unable to meet the needs of the modern student — who is often older, part-time, and poorer than universities had been designed to serve. To ensure our tuition dollars are being used effectively, institutions must be judged by graduation rates. College can be the great socio-economic equalizer but it does too little to ensure graduates prepare for real life, real debt and real financial obligations. A full-throated national debate can help put this issue in the spotlight.
We need colleges and universities to offer education that prepares even the lucky graduates who receive job offers to understand the real costs of life – like federal, state and local taxes -- and understand what it will take to service their debt. They need to know how that money is spent by their government, and thereby, understand who they vote for when they choose their elected officials.
It’s time our presidential candidates address the frustration of a generation that now find idols in entrepreneurs and innovators, but is not equipped to ride the wave of the technology economy. This wave is displacing old jobs with new opportunities, but only for those equipped to confront the new landscape. Let’s accept the “Uberization” of the economy and prepare all to reap the benefits of what’s to come.
Campaign commercials shot in American factories are fine, but recognizing the entire educational system’s need to provide STEM skills and changing that system so it prepares students for the economic facts of life are what we need to see, hear and read. Millenials deserve a presidential debate that speaks to them about the real world and their place in the economy.
We’ll probably have to wait for the debates in the next election, if we’re lucky.
Justin Dent is the co-founder and Executive Director of GenFKD, a national non-for-profit financial literacy and education initiative.