The coronavirus produced an epidemic of working from home. This has revealed a sharp split, between business leaders who want their workers back in the office, and a workforce that would rather stay home. My bet is that the return to the office that many CEOs anticipate will not take place. Building security firm Kastle Systems’ Workplace Occupancy Barometer probably will not return to 50 percent anytime soon. And I expect to see soft demand for office construction to last for many years.
One comment. I’ve seen this argument quite a lot:
“In the office, workers can bond with one another as they gather informally to chat. To replicate this in a remote setting, companies may have to periodically arrange events where workers get together.”
The flip side of this is that in the office, workers can waste a lot of time with informal chats and form disruptive cliques, grudges, and animosities. They can develop friendships and romances that can be disruptive and even more so if they go sour. Do workers really need to bond with co-workers? Might it not be better for workers and firms for professional life and social life to remain separate (as is the case with full-time remote work). The ‘bring your whole self to work’ stuff has turned out to be a disaster. If an organization wants people with different backgrounds, personalities, experiences (and, especially right now, politics!) to work together harmoniously, isn’t it better to keep things on a professional level? And isn’t remote work a great way to bake that in?
CEOs being uncomfortable with this reminds of in the 90s when some of the old-school guys were uncomfortable having a computer on their desks (keyboards were for the clerical staff) and insisted on having emails printed out and then replying by secretaries taking dictation.
I do agree with you about city centers. Workers don’t want to commute to suburban low-rise buildings any more than to downtown office tours. And they may want to live in urban centers. As it happens, both of my single adult children have fully remote jobs but choose to live in big cities for the urban amenities. So I do see city centers shifting to housing and dining/entertainment rather than office workers. But that’s still a momentous change (and probably a significant shrinkage in economic activity). Some cities won’t be able to make the transition. The current signs are worrying in some places, with rising crime and empty storefronts.
NYC is going to collapse , a lot of other major metros too.
I thought this a year ago, but don’t anymore. NYC’s population dropped in 2020 but then grew in 2021, so the oft-forecasted population decline isn’t panning out. There’s a long backlog of people who want to live there. Cities that can serve as consumption goods – a place you live for the culture, entertainment, social environment – can do alright; those dependent on people needing to live there for work will suffer. Hard to say which cities are in which category yet, but I’d guess a lot of older midsized cities that no one positively wants to live in may be in trouble. Also wouldn’t be surprised to see Chicago go the way of Detroit.
I suggest you watch the video I linked, along with others by him if you’re interested. Louis is a successful NYC tech repair shop owner who documents the insane speculative bubble in real estate in several videos of his mostly tech channel, that was going to implode regardless of Covid.
I agree with you that a few cities might barely hang on purely for the social experience, but it won’t be NYC and several other metros that have been leveraged to the hilt by dumb speculators.
The recent big Zillow news is that they are uncomfortable with their inventory and one analyst estimates two thirds of a sample of inventory are priced below cost. This was the news before they announced that they want to liquidate 7000 houses to institutions. Presumably institutions willing to buy in bulk will expect even lower prices.
Does this news mark a local maximum in the house price time series?
Heh, Louis just did a video on the Zillow debacle: those idiots came in and outbid the market so of course they can’t unload their housing inventory now.
I don’t know about house prices generally, but we’ve almost certainly passed the global maximum in major metro real estate prices, based on these remote work trends.
Barring getting lucky on timing I find it hard to believe that people can make serious money flipping houses unless they are putting in the hard work of repairs and/or land lording themselves.
Zillow clearly isn’t equipped to make money flipping houses.
–“Do workers really need to bond with co-workers?”–
Yes, generally speaking I think so.
On the human side of things, there’s just something better about collaborating with people that you know and care about. It would be much more dreary for me personally if the people I worked with were basically on the same level as faceless customer service representatives. One other thing to note, from my own experience, is that the people who I work with directly, I have better and friendlier relationships. All of the challenging relationships are with people who I rarely saw in person pre-pandemic.
From the employer perspective, if colleagues are close to each other, that engenders not only cooperation but can reduce turnover. My team at work, all millennials, has experienced an annual turnover rate of 4%, or just 2% if you ignore a person who left the smaller team but remained within the same group at the same company. This has occurred despite people being occasionally frustrated with the pace of pay and promotion, I think in part because my people knew me and trusted that I would advocate for their interests, but also because they like the people they work with.
I agree. I’m pretty sure it’s a huge plus to know and like the people you work with. Now, if you don’t like them…
It would be much more dreary for me personally if the people I worked with were basically on the same level as faceless customer service representatives.
But they’re not on that level at all, in my experience when working with people remotely on long term projects. Before Covid, there was usually at least one ‘kick-off’ event where everybody traveled for a day or two of meetings, team lunches and dinners, etc. On frequent conference calls, they’re familiar people and voices — you’re not random strangers. At the same time, they’re not part of your social circle outside the office, but that’s OK.
One other thing to note, from my own experience, is that the people who I work with directly, I have better and friendlier relationships.
Maybe. But working closely together creates the potential for more friction and drama, too. My wife is always coming home with some new story about about colleagues who aren’t getting along to the point where it affects the atmosphere and, a couple of times, has pushed people to leave for other jobs.
At this point, it seems that most people find the prospect of commuting into the office again more dreary than working remotely.
I agree that the comparison with customer service reps was a bit overdone, but for me there is a massive gap between my remote work relationships my relationships with the people I’ve worked with in person for 5, 7 or 10 years. The people I’ve worked with in person, I’ve met their spouses, significant others, and their kids. In many cases I’ve been to their homes. We have met up to hang out on weekends, and it’s not unknown for people to take vacations together. People have found significant others and, on another team we work closely with, there were two who managed to get married. Conversely, the people who I mostly work remotely with, it can take years to find out that they even have kids. The guy who I work the closest with on a remote basis (for about 4 years now), you could put a gun to my head and I don’t think I could tell you a single hobby of his.
For what its worth, my team has relatively little drama, though it is 75% male with zero woke progressives. I recall years ago a female friend bemoaning an all-female office, saying something to the effect that the dynamic changes for the better when there are some men are around.
Anyway, for us at least, getting back into the office on a part-time basis will be a significant plus.
Isn’t the world diversifying? People specialize more. For one thing economics drive specialization. In my last company there were about 60 K employees and I was the only person doing anything remotely like my job. With more cultures and backgrounds you run the risk of making people feel uncomfortable when discussion or activities are not directly relevant to work. Hobbies are increasingly diverse. Diverse interests mean any discussion is mostly about dispelling the misconceptions of the outsider. That sounds like a tedious discussion.
If a person’s hobby is Arduino how do you know they would enjoy talking about that with you? If you work at a computer or software company, they might. If you’re a child they might. If you are an adult, both sides are old enough to have determined our likes and dislikes through experience so we are unlikely to find common enjoyment in the discussion.
The people I’ve worked with in person, I’ve met their spouses, significant others, and their kids. In many cases I’ve been to their homes.
Yep. But to me, merging your social life and your personal life is a bit like investing your 401K in company stock. I’ve been playing various sports with a neighborhood Dad group for a long time. Some years ago, one of the guys hired another one and then, a few years later, fired him (because he thought the guy was a ‘B’ performer rather than an ‘A’ — this was back when annually culling your bottom x% was the hot new management strategy). The guy who was fired just disappeared from the group — but they obviously couldn’t both keep playing.
When you’re not spending all the time commuting and socializing with co-workers, you have more time and room in your life for other relationships.
–“I do not share Bloom’s view that suburban office parks are a panacea. For a typical worker, the opportunity to commute to an office park rather than a downtown high rise is hardly compelling. In fact, young people who want to go out after work might prefer the latter to the former.”–
I agree. I think the ideal future is moderated density mixed use zoning, with teams renting out space as needed in any one of a number of small buildings in a location that also has walkable lunch/coffee/bars and even some residential housing. Or perhaps Zuck is right about the metaverse, but if in person remains a thing, that is the direction that would appeal to me the most: in person once or twice a week, with a shorter commute, without having to pay for parking or only paying a token amount, yet with the ability to walk around to get coffee or walk to a bar after work.
Have a look at the differentials between the red states vs. the blue states in terms of employee card swipes according to Kastle. It’s like 20+ points. The red states are already close to or beyond 50%.
Let’s go Brandon!
Our 2nd grade daughter has been mask optional in her school since August. The prognostications from the local “virus experts” was nothing short of Armageddon in terms of outbreaks and hospitalizations.
What do you think might have happened since August?
Nothing. Literally nothing.
She hasn’t worn a mask at anytime this year and every is just fine.
Happy Halloween to all of the scary “experts.”
I have written it before, I think Arnold will be right on this prediction, at least for the parts of the country run by Democrats, and that it will turn into a disaster for the workers and those states and cities. If your job can be done from home, it can also be done from India, or Florida. Alternatively, it may eventually dawn on CEOs that if 50% of the office work can be done from home, that 50% probably was all busy-work in the first place, and thus non-productive.
I’ve worked with Indians who have good English and are pretty assimilated, and it’s still inferior to working with white people. And that is the best of circumstances, non-assimilated bargain basement Indians in India would be far worse.
I’m not convinced there is that much geographic arbitrage there.
Now NYC vs Florida…maybe. Especially if you can get the same people in Florida as NYC, but with cheaper housing and lower income tax.
I can’t tell you how many friends I have looking to move to TX/FL. So many companies are overwhelmed.
I really like Florida, but I’ve been betting (incorrectly) that it would turn blue since like 2004. DeSantis barely won, so I’m not off by too much. Hopefully I continue to be wrong, but we won’t be moving there anytime soon.
COVID caused a LOT of people to take early retirement, and most that I speak to want to relocate to FL. I think the influx of retirees will keep it marginally red for at least a few more cycles.
I also think the fact that it went red the past two presidential elections reinforces the idea that it won’t be a crazy town blue environment. It may become a self reinforcing cycle. The reverse is true, too: many left leaning folks may decide not to move there for that reason.
wow, that’s a horribly racist and wrong comment. First, there are lots of super talented Indians, that’s not hard to see. Next,
even when people are untalented or have flaws, and every single person whose ever lived has flaws and areas where they are unskilled, it’s obnoxious to highlight that outside of some productive or necessary action.
If, as you suggest, our workplace has these gross inefficiencies and waste that 50% of jobs are busy work, and companies are hiring overpaid under skilled talent because they don’t know any better, that’s horribly wasteful and unproductive, and we should want a better system.
For many decades, economists nearly unanimously predicted a gloomy future for the tech industry where wages would plummet and tech jobs that offered a middle class lifestyle would die out; because they expected a much larger pool of desperate workers competing for a roughly fixed pool of jobs. They were completely wrong. Instead, tech found many more use cases, the global market demanded a vastly larger pool of tech workers, and tech jobs boomed absolutely all around the world, and it’s been a really happy story compared to the doom and gloom predicted.
There is enormous waste in our economy, and we should want it fixed, not sustained, but that is generally tied to fields tightly regulated by government.
While I disagree with Yancey that remote work is inherently unproductive, he’s not wrong that there is a ton of waste in most office work. We’re still in the early stages of automating mindless office work, including in the extremely bloated tech sector, and I suspect we’re in for a giant drop in most of those office jobs in the US, whether through more offshoring or automation. Imagine how much worse it is in highly govt-regulated sectors if it’s this bad in the less regulated sectors?
It is difficult to say whether that will end up with more people employed or less, as whole new types of work that isn’t amenable to automation gets created all the time. But I suspect the labor force participation rate is going to keep dropping in the short term, as there’s a lot more that’s easily automated (I’m not talking about AI, which is largely a scam, just basic software automation).
It probably depends upon the job whether the 50% that can be done at home was the non-productive part or if the 50% being done at home was the only productive part.
If your job can be done from home, it can also be done from India, or Florida.
Florida? Sure. India? Maybe. It very much depends on the job. My experience with Indian offshore workers is that cultural barriers are real and the huge time-zone difference isn’t trivial either.
In my 20s and 30s my employment provided a great social group. My colleagues and I golfed, played pickup basketball and flag football and had many lunches. If I worked from home, how easily would I be able to replicate those relationships and experiences?
As a more seasoned employee I can see the upside to work from home. My skills are more specialized and I have the experience to tackle complex problems on my own. But I would not recommend work from home for young employees. I think too many would feel lost and disconnected from their employer. I think people unsure whether they were adding value in their work, and unsure if they were individually recognized socially in their team, will struggle.
It seems that employees will share way more information with each other if they are in the same physical space. People making small talk about their jobs getting coffee in the break room, and inadvertently learning things and making the company more efficient.
I am curious to know how ASK and commenters would answer the following question, which naturally arises for ASK’s essay:
Should remote employment comes to take center stage in careers of white-collar personnel, then will higher education adapt and change what its credential (the degree) ‘signals’ to the employer?
Background to the question:
Currently, selective colleges in the USA are residential campuses — “total institutions”, which integrate study, communal residence (dorms), communal meals, athletics, clubs, ‘work study,’ friendship, and romance. In most Majors, students focus little on knowledge that applies directly to career. The credential signals a mix of smarts, task completion, and willingness to jump through hoops for a series of variously exigent bosses (professors, coaches, administrators) for four years.
Notably, a large fraction of employers appear to value experience in collegiate athletics (especially ascent to captaincy), along with good academic performance, because successful student-athletes internalize norms of teamwork, hierarchy (coach/captain/players), competition against other teams, and clear performance metrics for teams and individuals. All of this involves a hothouse of in-person interaction across spheres of production and consumption; for example, teams often have a norm of sharing communal meals after athletics practice. By contrast, academic production, especially outside the laboratory sciences, is largely solitary — but academic knowledge in most courses has little application to career.
Thus, there would seem to be a mismatch between solitary remote employment and the total institution (the expensive residential-college campus experience) that currently produces the employment signal for white-collar careers.
The current “employment signal” is a joke, nobody with a brain takes it seriously. In my field of tech, it is common to grill college seniors on basic questions from sophomore-level weed-out courses during their interviews, not because that material is useful at all as you say, but because it represents a common corpus that most everyone has gone through, since the last two years of undergrad usually specialize more. Most seniors have forgotten that material by then, so they spend months drilling those questions again for the interviews, before they can finally forget them after getting hired, as they have no relevance on the job.
You really live in a fantasy world if you think “the credential signals a mix of smarts, task completion, and willingness to jump through hoops.” Most college grads spend the four to six years trying to do as little work and enjoying themselves as much as possible. I’m told a Physics professor at my university decades ago took a video camera out one Friday night and taped students withdrawing money from ATMs before getting hammered at the college bars, then showed the video at a faculty meeting before lambasting them as ineducable. I gather it was a bit of a minor scandal within the dept. but never got out widely.
Remote work is just the first step in a radical reorganization of society by the internet, which is going to see most of these universities go bankrupt. They have been a joke for many decades, long before the internet. The internet is merely the death blow.
Wallace,
Thanks for your reply. I share your view that the degree ‘signal’ is often is more noise than clear signal. The puzzle remains, why do employers then use educational attainment as a first-pass signal? And why do parents allocate huge resources to pay for college for their children? What holds the equilibrium in place? Is the marriage market (assortative mating by educational attainment) the key? Will major increase in remote work disrupt the equilibrium insofar as college as a “total institution” is a mismatch for remote employment?
> why do employers then use educational attainment as a first-pass signal?
If you still managed to acquire the sheepskin after 4-6 years of drinking and carousing, it is a rough signal of native ability, as almost half don’t graduate. People claim Griggs v. Duke disallowed basically all employment testing, so employers are forced to outsource.
> And why do parents allocate huge resources to pay for college for their children?
Parents are deeply ignorant and confuse any college education for Caltech. Also, given the recent celebrity kid admissions scandals, a brand college acceptance for your kids has become a Boomer status marker.
> What holds the equilibrium in place?
Oh, that’s easy: college has become a mindless tradition, like Catholic church rituals.
> Is the marriage market (assortative mating by educational attainment) the key?
No, that’s pretty much over, only 7% of those aged 18-24 are living with a spouse. Most don’t need to use their own college as a marriage pool anymore, although they do require that their partner be similarly college-educated from some other institution.
> Will major increase in remote work disrupt the equilibrium insofar as college as a “total institution” is a mismatch for remote employment?
Colleges have much bigger problems than that, namely that online learning is about to obsolete them.
I will believe that “online learning is about to obsolete [colleges]” when someone wins election on a platform of reducing aid to college students.
Heh, elections and aid are irrelevant, as the NYC taxi medallion owners found when online ride-hailing apps routed around them. Just as Uber and Lyft created an entirely new market that obsoleted yellow cabs, the same is about to happen to the colleges.
I look forward to it, as I look forward to reliable, economic nuclear fusion.
I can’t help but notice that the venture capitalist who you quote below says:
“This is one of those my ‘X-wing fighter up against the death star’ kind of things. Education startups coming out of tech run up against this bundle or matrix of value. All of the heavily freighted societal implications, and all the heavily freighted governmental policy aspects… Try and create an education startup that goes up against a system where incumbents have access to unlimited federal student loan funding for free. [laughs] Talk about a hard challenge!”
He certainly seems to think that aid is relevant.
> He certainly seems to think that aid is relevant.
Oh, it’s relevant if your goal is to recreate the old product online. But that’s not what Uber/Lyft taxi disruption did: they created an entirely new market where all the political connections and money of the taxi companies was irrelevant.
Similarly, online learning is not going to be just another Club Med, it’s going to be something completely different where student aid is irrelevant.
It’s relevant because it’s a “barrier to entry” for new business models. If the government gave everyone a several thousand dollar credit line to spend on taxis (and only on old school taxis), Uber and Lyft night never have gotten off the ground–even if they were offering a superior product.
> It’s relevant because it’s a “barrier to entry” for new business models.
On the contrary, it would make little to no difference, because taxi supply would still be constrained by the medallions. As Arnold always says, the crony capitalists subsidize demand and limit supply. That only works if you can actually block new supply, as the taxi cab companies were unable to do and colleges definitely won’t be able to do.
I suggest you read up on the theory of disruptive innovation put forth by Clayton Christensen a quarter-century ago, that is considered to have strong empirical backing by now. Ironically, the massive govt subsidies make the colleges easier to disrupt, not harder.
How do the college subsidies “make the colleges easier to disrupt, not harder.”?
Certainly, the supply of medallioned cabs would still be limited in my hypothetical. But it would hardly be zero. A good deal of the potential market would still be served by them. In that case, what Uber and Lyft would have to count on is that their entry would expand the market substantially. Which would, of course, take time and a lot of initial loses. It might happen, but the taxi credit line would make it a lot harder than it was in real life. In real life, the existing, approved by the DOE, educational institutions have that advantage.
> How do the college subsidies “make the colleges easier to disrupt, not harder.”?
Read the link I gave you or further articles in that vein all over the internet. The more money that entrenched businesses were making, the easier it was for others to disrupt them. They do not view the initially low-end products as competition and by the time they do, it is too late.
> In that case, what Uber and Lyft would have to count on is that their entry would expand the market substantially.
That is exactly what they did and what online learning would do much more.
> It might happen, but the taxi credit line would make it a lot harder than it was in real life. In real life, the existing, approved by the DOE, educational institutions have that advantage.
Every incumbent business that was disrupted over the last century had some version of this, where they were minting money and didn’t take the disruption seriously. In fact, that is probably the key factor behind disruption: they don’t realize the low-end product is even in the same market and so don’t take it seriously. By the time they realize it, it’s too late.
Getting free money from govt subsidy has made the colleges incredibly disconnected from the market, it is already too late for them. They will all be destroyed by online learning in the coming decade or two.
No, “Every incumbent business that was disrupted over the last century” did not have “some version” of student aid, tax exemptions, endowments, and graduate loyalty that today’s colleges and universities have.
I am aware of Clayton Christensen and he does not say that all incumbent businesses automatically fail because of outsiders with different ideas. No matter how much money they are making.
This is going to sound silly but you remind me of people in the 1960s who were arguing in favor of a public broadcasting system. The three networks, they said, were stuck in a mediocrity that lots of people didn’t want. But if there were a government run network, it would air quality programs and tv executives would be shocked by how many people watched it. Of course, PBS was established, and it has never had more than a few percentage audience share.
> No, “Every incumbent business that was disrupted over the last century” did not have “some version” of student aid, tax exemptions, endowments, and graduate loyalty that today’s colleges and universities have.
Of course they did, in fact, they sometimes were larger and more profitable than the current “higher education” scam.
> I am aware of Clayton Christensen and he does not say that all incumbent businesses automatically fail because of outsiders with different ideas. No matter how much money they are making.
You must not be very familiar with either him or my statements, as nobody said that’s why they fail.
> you remind me of people in the 1960s who were arguing in favor of a public broadcasting system. The three networks, they said, were stuck in a mediocrity that lots of people didn’t want.
There’s a superficial similarity in the terrible status quo then and now, but of course I’m arguing the change will come from the opposite end of the spectrum, ie the low end of the marketplace despite the stupid govt involvement propping up the incumbent. I do think the high end will be next, as the mass middle will probably take the longest to switch over to online learning.
In the United States, a period represents a decimal, not a comma as in much of the world. Thus, 19,000 million is nineteen thousand million.
The United States auto industry was certainly disrupted by the Japanese but most of the advantages the incumbents had–a sophisticated network of government provided roads, policies leading to cheap and available fuel–were also advantages the disruptors had. In fact, one could argue that American labor laws had created a disadvantage for the American firms: adversarial labor-management relations, restrictive work rules, and higher than average wages.
> Thus, 19,000 million is nineteen thousand million.
One billion is a thousand million, therefore you are asserting that the size of US GDP is only $19 billion?
> In fact, one could argue that American labor laws had created a disadvantage for the American firms: adversarial labor-management relations, restrictive work rules, and higher than average wages.
I argue that the out-of-control administrative bureaucracy and outdated educational methods similarly kneecap academia. And since the core product is informational, not physical like the auto manufacturers, there will be almost no colleges running today that survive to 2050, as informational products like phone books get entirely replaced fairly quickly.
We’ve both made our predictions, let’s see what happens. 😀
You’re absolutely right. I screwed up. Both the “millions” in my November 5, 2021 at 5:51 pm comment should be “billions”.
I agree that the “core product” of colleges and universities is “informational” but it is not information that students have learned. It is information to potential employers or partners that the person is reasonably smart and is fairly good at “task completion and willingness to jump through hoops.” That’s a major reason that employers often require a college degree and much less often care what courses the employee took or what her major was.
Most of the people who argued for a pbs were sincere but unrealistic. They believed something that was ideologically convenient: that there was a large hidden market for a better product that was being suppressed by the bad guys, and that would be provided by the good guys. Your belief is similar and just reverses who are the good guys (free markets) and the bad guys (governments).
No doubt I am insufficiently knowledgeable but I can’t think of a single industry which had the advantages of today’s higher education and which was “larger and more profitable than the current ‘higher education’ scam” and yet was brought low. (Of course, it’s hard to talk profits about firms that don’t report profits, but higher ed spending is about 650 million dollars in a 19,000 million dollar GDP.) Perhaps the railroads but they were toppled with the great help of governments (e.g., road building), which I don’t think is what you’re talking about regarding educational disruption. What industries were you thinking of?
> Most of the people who argued for a pbs were sincere but unrealistic. They believed something that was ideologically convenient: that there was a large hidden market for a better product that was being suppressed by the bad guys, and that would be provided by the good guys. Your belief is similar and just reverses who are the good guys (free markets) and the bad guys (governments).
As I said, they were right that only having three TV networks was a bad situation, and the cable TV market eventually came along and proved them right. As for your simplistic good/bad guy framing, I’d say more that the colleges are antiquated and lazy. The internet has completely changed the way information is routed and consumed, yet they still live in the past. That won’t last.
> higher ed spending is about 650 million dollars in a 19,000 million dollar GDP.
I think you mean billion.
> What industries were you thinking of?
I was thinking of something like the US automative market, which was much larger and had many of the same subsidies and so on. That didn’t stop the Japanese from disrupting them and becoming the world leader, until recently when the Chinese passed them.
You really live in a fantasy world if you think “the credential signals a mix of smarts, task completion, and willingness to jump through hoops.” Most college grads spend the four to six years trying to do as little work and enjoying themselves as much as possible.
Why do you think those two things are contradictory? To do little work and still get a degree requires a fair amount of smarts. The fact that a student actually does enough to get that degree, even though she has little interest in the subjects, signals “task completion and willingness to jump through hoops.”
> To do little work and still get a degree requires a fair amount of smarts.
Yes, I did call that “a rough signal of native ability” above.
> The fact that a student actually does enough to get that degree, even though she has little interest in the subjects, signals “task completion and willingness to jump through hoops.”
Not really, or do you expect your co-workers to only complete a fraction of their tasks, when they occasionally show up to work?
College has become Club Med with a few books thrown in, a deeply wasteful experience for almost everyone who attends. I make no exception for STEM majors like myself, who were there to learn: I wish I never went.
Fairly soon, nobody will.
To do enough work to get the degree means you have completed all of the tasks you were required to. Finishing a fraction of the tasks would have meant only passing a fraction of the required classes.
Sure it’s not learning much but to be blunt, that’s not what college requires. College requires a certain amount of smarts and “task completion and willingness to jump through hoops.”
Thanks to Wallace and Roger Sweeney for clarifying the issues from different vantage points.
William R. Emmons, Ana H. Kent and Lowell R. Ricketts, “Is College Still Worth It? The New Calculus of Falling Returns” identifies another crack in the ivory tower:
“The college income premium is the extra income earned by a family whose head has a college degree over the income earned by an otherwise similar family whose head does not have a college degree. This premium remains positive but has declined for recent graduates. The college wealth premium (extra net worth) has declined more noticeably among all cohorts born after 1940. Among families whose head is White and born in the 1980s, the college wealth premium of a terminal four-year bachelor’s degree is at a historic low; among families whose head is any other race and ethnicity born in that decade, the premium is statistically indistinguishable from zero. Among families whose head is of any race or ethnicity born in the 1980s and holding a postgraduate degree, the wealth premium is also indistinguishable from zero. Our results suggest that college and postgraduate education may be failing some recent graduates as a financial investment.”
Federal Reserve Bank of St. Louis Review, Fourth Quarter 2019, 101(4), pp. 297-329.
https://files.stlouisfed.org/files/htdocs/publications/review/2019/10/15/is-college-still-worth-it-the-new-calculus-of-falling-returns.pdf
https://doi.org/10.20955/r.101.297-329
There seem to be major uncompensated strains in higher education: for example, declining returns on investment; mismatch of curriculum and career; emergent mismatch of intensively in-person campus life and remote employment.
Is elite higher education on the verge of disruption? Or is the high-cost, selective, residential, liberal-arts campus model resilient and robust — and entrenched equilibrium?
It has been on the verge of disruption for decades now (many have already gone under), here is how a very successful venture capitalist thinks about it, which Arnold linked a couple months ago:
“I think the right way to think about education consistent with all of that is that education as it is right now is a bundle. Take college as an example, it’s a bundle of, in theory, skills and knowledge. It’s a bundle of a credential. It’s a bundle of social status. It’s a bundle of daycare for young adults. [laughs] It’s a place to park people whose frontal lobes are still not fully developed. They bundle housing and food in there, it’s a social environment, it’s a dating scene, right? It’s a place to act out, to experience rebellion. [laughs] It’s a bundle of all those things, and we’re basically dealing with the consequences of having bundled all those things together and then pretending it’s ‘education.’ Pretending the end results are useful for skills or living a better life or such a thing.
It’s very easy to technologically innovate in delivering instruction or chess playing or any of these other components of the ‘educational process.’ It’s much harder to go up against that bundle. You did argue the dominant thing in that bundle is the signal, the social status that results. This is the Bryan Caplan argument with the seven-eighths effect; somebody who completes seven-eighths of Harvard does not earn seven-eighths the money as someone who graduates. They make half the amount of money as someone who graduates. So either half the skills are being loaded into that last semester or it really is the diploma which is signalling value as opposed to the actual skills.
This is one of those my ‘X-wing fighter up against the death star’ kind of things. Education startups coming out of tech run up against this bundle or matrix of value. All of the heavily freighted societal implications, and all the heavily freighted governmental policy aspects… Try and create an education startup that goes up against a system where incumbents have access to unlimited federal student loan funding for free. [laughs] Talk about a hard challenge!
So I think that’s all true. In our world, you want to be somewhat cautious about the degree to which you think this stuff can be revolutionized through a better user experience or something like that. On the other hand, I think it was Herbert Stein who said ‘if something cannot go on forever, it will stop.’ At some point, things just reach a level of absurdity.
This goes back to our Uber discussion. At some point it’s just absurd to stand on the street corner waiting for a taxi cab if you can just punch up an Uber or Lyft. At some point it’s just absurd to have your kid spend $80,000 a year for your kid to get indoctrinated in a fringe political cult that basically leads to your kid being unemployable. [laughing] At some point… A friend of mine who is a well-known Silicon Valley entrepreneur, very successful and very left-wing. I was asking him about his kids and he goes, ‘yeah, my daughter went to Brown. Now she’s 25, she lives in Brooklyn, she’s stopped bathing and she hates me.’ [laughter] I almost asked him ‘who pays her credit card?’ but I didn’t want to get into it. So at some point it’s really like, ‘really? Seriously? This is what we’re doing?’
And we see the other side of this in fact. In tech it’s kind of boomeranged around. Like in tech, it’s arguably a better credential to have dropped out of Harvard than it is to have graduated from it, right? Mark Zuckerberg, Bill Gates, Harvard dropouts.”
There’s more in there at the end about how he strategizes displacing the education bundle piece by piece.
Thanks for the interesting link on the “college premium” disappearing, which was always nonsense as it was correlation not causation.
Venture capitalists like him understandably went after the lower-hanging fruit of taxi dispatchers, travel agents, and media first, but they’re now gearing up to take on the massive education blob. Unlike Roger, I’d bet on disruption.
I apologize for typos in my question. I meant to ask ASK and commenters:
Should remote employment take center stage in careers of white-collar personnel, how might higher education adapt and change, so that the degree ‘signals’ to employers that the new employee will perform well in remote employment?