Comments on: The Metrics of Protest: Extreme Inequality and the Payoff to College Degrees

By: Morningstar

Morningstar — Mon, 14 Nov 2011 21:29:00 +0000

We cannot continue to promote college as the only standard for the social and economic success of our society. A society based solely on the exchange of information will ultimately collapse. The former success and strength of the United States was the strength of our middle class, consisting of both production of goods, service-oriented jobs and more specialized professions. With many of the production and service oriented positions being outsourced to other countries with fewer constraints on working conditions and on pay, we have lost the backbone of our culture; the strong middle class. One answer may be to buy more American made products and local services. Where there is demand, there will be production. Second, perhaps not everyone should be admitted to college. My mother grew up in an era during the depression where high school students were given the choice to prepare for a trade, clerical position or be college bound. Those graduating from high school were prepared to work or move onto college. To survive, our society needs more balance in production of goods, locally grown foods, locally owned services and more specialized professions requiring a graduate or doctoral level education.

By: Morningstar

Morningstar — Mon, 14 Nov 2011 21:29:00 +0000

By: Michael Corey

Michael Corey — Wed, 09 Nov 2011 20:45:00 +0000

Quantifying the value of college degrees poses many challenges. First, I’m assuming that in this analysis values other than economic are being disregarded. The qualitative benefits may be significant. Secondly, not all college degrees are the same. Some college degrees have more economic value than others. For instance, engineering degrees typically have led to higher paying initial positions than degrees in the humanities. Some advanced degrees tend to have more value than others. For instance, a Master’s degree in Business tends to have more economic value than a Master’s degree in sociology, all other things being equal. Combinations of degrees such as a CPA plus a Law degree or MBA, or an Engineering degree and MBA may have more initial value than some other combinations.

Perceived value is determined by organizations and people paying for services of the degree holder. This is especially applies as the initial determinant of the value of the degree. Afterwards, the value of the degree will be typically be determined by performance, the ability of the individual to either create value or contribute to the creation of value, the amount of value created, timing and other circumstances.

An obvious question may be why has there been a longer term trend towards income stagnation for large numbers of highly qualified people. I suspect that the most obvious answer is that the value of credentials is considered on a more global basis. Domestic workers with excellent credentials are now being replaced with work done elsewhere in the world by well qualified individuals working for less compensation. Thus, the value of credentials in the United States has been negatively impacted. In essence, income is being redistributed to other places in the world.

The compensation of the top 1% can also be linked with perceived value creation. While there are many inequities and many specific compensation packages can be questioned, in aggregate, I suspect that the value creation explanation still works better than many others especially when combined with a number of additional factors.

My guess is that the value migration from the United States earners to others elsewhere in the world may be linked with what I perceive to be a weakened center in modern world-system, to use a Wallerstein term. As the center became more fragmented in the decades following World War II when most of the world’s production capability was concentrated in the United States, the United States has slipped closer to entering the semi-periphery as the productive capabilities of other nations has increased.

In addition to structural explanations, I think that we need to consider agency issues. A recent article by Michael Tanner of the Cato Institute states that, “Roughly 80 percent of millionaires in America are the first generation of their family to be rich.” Upward mobility still seems possible. I briefly examined Forbes profile of billionaires. I was surprised at the numbers of billionaires who were from challenged backgrounds. Entrepreneurship is one of the biggest reasons. There are numerous other factors that influenced this group which comprises a very small percentage of the top 1%, and the top 1% as a whole.

I suspect that unless there are significant social and economic changes; and actors make fundamentally different choices, then the situation will continue to worsen. Many policy proposals, in my view, are stopgap measures at best, and may actually have negative longer term impacts.

By: Scott

Scott — Wed, 09 Nov 2011 16:06:00 +0000

Quite a detailed article. Many of the jobs, such as factory jobs, that have left the United States did not require a college degree. Other jobs require some technical training, but not necessarily a college degree. In any event, its seems a rather odd notion that college education alone will generate jobs. In fact, given the exorbitant costs of a college eduction, promoting such education with corresponding job creation seems rather foolish. Then you have a workforce with a sizable debt, and limited prospects. The real issue is why, at the same time the benefits of economic growth have shifted disproportionately to the top 1 percent, the average cost of college education, even adjusting for general inflation, has doubled.