A recent post in the New York Times points to the downward trend of the profitability of newly-minted M.B.A.s in today’s job market. The reasoning for this is easy enough to understand: with the economic downturn of 2008-09, more and more recent college grads sought refuge in the halls of academia, as recent grads are oft to do when they graduate into an unforgiving job market such as it was. This uptick in the number of M.B.A.s flooding the marketplace, combined with the fact that the market has not recovered nearly as convincingly as so many other post-recession markets have in the past, has led to a general devaluing of a very expensive and normally sought after degree. These new M.B.A.s took a gamble that they would enter a promising job market armed with a very in-demand degree, only to be left with thousands upon thousands of dollars of student debt and little to show for it.
This is just the echo of the much larger problem we face, that being the fact that the value of a college degree is on the downturn. It is simple economics – the greater the availability of a product or resource, the less its market value will be. Only through scarcity will a resource increase in value. At the moment, a college degree still holds a decent return on investment, but the longer the number of new jobs created continues to be outpaced by the number of college graduates, the harder this race will be to watch. Between 2000 and 2010, the number of those enrolled in college and university-level classes increased from 15.3-to-21.0 million students[1]. Assuming equal distribution throughout the standard 4-year degree, and assuming that college graduate unemployment resides at 5% (reasonable under old normal circumstances), there would need to be 4,987,500 new jobs created year-over-year. In the first four years of the Obama Administration, 4.5 million new jobs were created – enough to give 25% of those who were still in college in 2010 any sort of hope of finding meaningful, relevant work.
This is the crux of the issue. The college degree is devaluing because supply is outpacing demand, pure and simple. The reasons for this are many: a poor job market scaring grads back to school; a slower recovery preventing companies from hiring; and political (see: economic) uncertainty that results in a situation where companies that can hire, wont. The list could go on, but suffice it to say, the rate at which America is producing college graduates is both awesome and dangerous.
Of course, supply and demand also show us why the cost of tuition is growing so exponentially. For those unfamiliar with the laws of supply and demand, one such law states that as the demand for a good (in this case, a college education) increases while the supply for said good remains unchanged or else increases at a slower rate than demand, the result will be a higher equilibrium price. As we make it easier and easier to get a college degree from the local public university, we make it easier for the hull of the academic ship to reach capacity. The solution, of course, is to buy a bigger ship, and more of them. This will cost money, but it will pay for itself, because the trend is ever-upward (so we tell ourselves)! This model of academic expansion is an unsustainable bubble and will one day burst just as all bubbles eventually do, taking with it everything we have come to know about public higher education. All of this does not even begin to take into account the economic impact of such a bubble. That is its own beast to be slain.
Viable and realistic alternatives to the traditional 4-year college do exist. Vocational schools, trade schools, conservatories, private academies, apprenticeships – these are but a few alternatives that are lower in cost, often shorter in duration, and lead to professions with less competition, which means the upside potential in terms of income is far greater. This would allow for the filling of many jobs that presently remain open due to lack of qualified applicants (or a lack of applicants in general), and would keep individuals from otherwise becoming one of the many who graduate with a truly worthless college degree (gender studies, anyone?), which of course leads to mountains of student debt and no real way to pay it off.
Admidst the tempest of higher education reform, one truth remains: something has to give. We cannot continue on the path we are presently on. Either reason and reform will win the day, or else ruin. The decision is ours to make.