In the interest of fairness and consistency– the estimable Yves Smith reacts to the Times article from this weekend on student loan debt. (I should give credit where due: I thought that article was excellent, remarkably even-handed and sober.) Suprisingly for someone so bright, Smith repeats the standard canard that our problems largely stem from students taking the wrong, “impractical” majors.
First: as I will continue to shout from the rooftops, lists of the most popular majors are dominated by those that are considered practical, and the trends largely show this “rush to practicality” growing, not shrinking. Yet we still see broad unemployment for recent graduates. Second, every major indicator is that employment is broadly depressed across almost all fields and sectors of the economy, suggesting that the fundamental problem is dependent on economy-wide factors of demand. Third, again, skilled labor is subject to supply and demand; pushing large swaths of college students into areas that have short-term demand for workers seems remarkably shortsighted to me. Fourth, Smith is overly credulous of worker self-reporting that their jobs don’t require a college degree, which is troubled by the terrible employment metrics for people without college degrees. It’s still difficult to say with a straight-face that college is not worth it. The metrics for those without college degrees are vastly worse than for those with them.
The idea that choice of major is largely determinative of a student’s post-collegiate success keeps getting thrown out there, but I have seen nothing resembling a convincing empirical case for this notion. And whatever correlations one could draw between major and future financial success would likely pale in comparison to where one went to school, and (especially) to the socioeconomic status of one’s parents, which is still about the most highly-correlative metric for a child’s eventual income. I think this narrative flourishes thanks to the “wag the dog” dynamic: if the problem is that college students are taking the wrong majors, the fix is easy. But that doesn’t appear to be the problem and the fix is not easy, and despite the constant attacks on the university in the media, nobody has offered an even remotely credible replacement.
Smith does end on the necessary takeaway: we need to make college more affordable in large part by holding costs down, but more, we need to fund it publicly again. The Times piece describes how Ohio has slashed public support for college education, at the same time as the state has eliminated its estate tax. The Ohio estate tax, like all estate taxes, was a tax on the wealthiest. Eliminating that tax while cutting funding to state universities is a straightforward transfer of resources from the less well off to the rich. We are currently wrestling with the question of what kind of society we want to have; the collapse of the job market for recent graduates undercuts our self-conception as a society of opportunity and social mobility . Governor Kasich has thrown his lot in against that self-conception, and towards a “winner take all” vision that favors low taxes on the wealthy over social mobility and opportunity for most people. What has to be impressed on voters is that this represents a choice: we can have the mobile society that we say we want, or we can have artificially, historically low taxes. We cannot have both.