One of the biggest beliefs in America is that education can solve all of our ills, and all we need to do is throw enough money at is and everything will get better. This appeals to many people because it offers the promise of a fairly easy solution to our problems. Politicians, and leftists love it because it means more government spending. The educational establishment lobbies for it, and the media tends to go along as well.
The reality is that we have spent and are spending enormous amounts of money on education with little in the way of results, and no improvement. My entire life has been filled with educational reform initiative after initiative, and the quality of our students has not improved. Studies shows that spending lots of money on poor performing schools does not meaningfully improve scores.
Then there is the love affair with higher education, which is pitched to everyone, including those who are not academically inclined, not very bright, and not college material. We are told to go ahead and take out $200,000 for that degree in Sociology, only to find that they end up working retail and swimming in a lifetime of debt servitude unable to discharge their debt. Most of the success of smart graduates from selective schools is based upon the fact that these people were selected with the attributes for success from the beginning. They would have done well anyway, with or without Harvard. In fact, many of the most successful entrepreneurs never finished college (Bill Gates, Michael Dell, Spielberg, etc.). I would love to see the success rate for Harvard grads. if Harvard had to admit lots of completely mediocre candidates. My guess is that those Harvard graduates would do about as well as the general population, despite their illustrious degrees. That is why graduates from non selective schools tend not to do great. The education in most schools is fairly similar. What matters is the quality of the students. Quality in, quality out. Garbage in, garbage out. The system wants us all to believe that going to the right school is all that matters, when in reality what really matters are the innate abilities of the individual. Life is what you make of it.
Finally there is the love affair with job retraining programs, which superficially appear to be helpful. Yes, they work for some. The problem comes that many of the people who are targeted for such programs lack much more basic job skills such as being able to show up to work reliably and on time, be able to handle responsibility, control their temper, act professionally, have social skills, and wash on a regular basis. Learning a new job skill is not going to help much if people lack these basic attributes. Many of them have mental deficiencies which are hard or impossible to overcome. Job retraining programs have a poor record of success.
I am all for education and training, when it shows that it produces results for the time and money needed to put into it. When it does not, we need to reevaluate. Generally the best and most relevant education is on the job experience.
Here are some great comments from Mish Shedlock.
Middle-Aged Borrowers Pile on Student Debt
Reuters reports Middle-Aged Borrowers Pile on Student Debt
Educational borrowing is up for every age group over the past three years, but it has grown far more quickly among those between 35 and 49, according to the analysis of more than 3 million credit reports provided to Reuters by the credit score tracking site CreditKarma (CreditKarma.com). That group saw its school debt burden increase by a staggering 47 percent, according to the analysis.
The average student loan debt for those aged 38 to 41 was the biggest of that group — about $12,000, up from just under $9,000 in 2009. Young people still carry the biggest student loan burdens; those aged 26 to 29 have an average of $14,000 in student debt. But the increased levels in middle-aged student debt is a new phenomenon.
This a worrying sign. A lot of middle aged people are going further into debt in the false promise that further education will land them a great job, when in reality there are few jobs to be had, and job experience is more important than education.
Negative Payback on Retraining
The benefit of going back to school at age 49 is likely negative.
My friend “BC” comments:
The payoff for 40- and 50-somethings taking on debt to change occupations or trying to find jobs in “health care” or “education” and compete with Millennials trying to secure similar positions is low or negative.
Statistically, the benefit to “education” occurs between ages 14 and 22, where one goes to high school and university. Obtaining an MBA, law degree, or another graduate degree after age 26-28 historically has not resulted in a net benefit in terms of job/career prospects or wage/salary income; and this has become particularly the case since the late ’90s.
In other words, the vast majority of people running up debt at universities, community colleges, and for-profit technical schools are wasting their time and money, as well as directing scarce resources to the “health care” and “education” sectors that don’t need more misallocation further driving up costs.
Needless to say, there is no precedent in US history for middle-aged unemployed, underemployed, or unemployable Americans running up debt in an economy that has not created a net new private sector full-timejob per capita in at least 10 years.Fewer Nonfarm Employees Now Than December 2000
Here is one key chart (of many) from Fewer Nonfarm Employees Now Than December 2000; Unemployment Rate: Some Things Still Don’t Add Up; Obamanomics?
Total Nonfarm Employees
There are currently 132,409,000 nonfarm employees. In December of 2000 there were 132,481,000 employees. How’s that for job growth?
Job retraining is scam perpetrated by for-profit universities, fueled by statements from Obama regarding re-training people for new jobs.
Brick-layers are told they can be “chefs”, take $10,000 courses and the universities call it a “success” if they land a job “in their field” at McDonald’s. Unemployed roofers are led to believe they can become Java programmers, and they waste collective $billions trying. Meanwhile out of work Java programmers are told to take up a trade like roofing or auto mechanics.
The cost of education keeps rising because Obama (like Bush before him), keeps adding to the student loan program when the entire student loan scam really needs to be shut down.
Why Does the Scam Roll On and On?
- No politician wants to stand up and tell the truth: Retraining is a waste of money and the odds of launching a new career in other than a low-paying job requiring few skills is simply not likely.
- For-Profit universities pad politicians’ pockets
One can always find success stories, but in aggregate, retraining middle-aged workers is a net waste of money.
To Paraphrase Joe Weisenthal
Now, to paraphrase Joe Weisenthal: “It’s hard to think that the economy is NOT going back into a recession with numbers like these.” The difference in viewpoint is understanding what the underlying numbers really represent.