Nearly 45 percent of 25-year-olds, for instance, have outstanding loans, with an average debt above $20,000…And more than half of recent college graduates are unemployed or underemployed, meaning they make substandard wages in jobs that don’t require a college degree.
…In 1968, for instance, a vast majority of 20-somethings were living independent lives; more than half were married. But over the past 30 years, the onset of sustainable economic independence has been steadily receding. By 2007, before the recession even began, fewer than one in four young adults were married, and 34 percent relied on their parents for rent.
Pointer from Tyler Cowen.
Some comments:
1. Segments of our society are falling apart. The left’s treatments are exacerbating the problem. That is why I think that changing our system of means-tested benefits ought to be a high priority.
2. I chide my daughters for not working for a profit. But they are all out of the house. I am not a total failure.
3. Government-subsidized college loans contribute more to the problem than to the solution.
Generation K – Kangaroo.
Of course they work for a profit…..it may have non-profit tax status, but outflows have to be exceeded by inflows or the whole thing ceases to exist. The excess inflows (profits) are usually distributed via payments to the owners and employees as ‘bonuses’ and ‘benefits’.
It just makes the new generation ‘feel better’ to comply with the indoctrination that their teachers gave them. My kids are out of the house, also, but my wife and I spent many dinner times patiently explaining why ‘for profit’ is not a dirty word. I just hope we were successful….
Part of the Student Loan problem is that only a minority finish a four year degree program.
I live in Bellingham, WA, and although entrance standards are tough, only 28%, go on to graduate.
The student loan issue is significant.
But what will really be significant, is the implosion of the housing rental market when the economy starts to sour as investors start to sell out of stocks, and the Benchmark Interest Rate, $TNX, starts to soar as investors recognize that the monetary policies of the world central banks, crossed the Rubicon of Sound Monetary Policy, and have made money good investments bad.
Here in Bellingham, the Sehome, and York, Neighborhoods, are almost all comprised of rental units, so when students give up, and don’t seek to go to College or University, real estate loans, will explode, and properties will become blighted.
“Segments of our society are falling apart.”
Tell that that Bryan Caplan, who thinks Western Civilization is as hardy as ever.
No doubt leftist policies are hastening the disintegration of our society, but I can think of some bipartisan policies that also play a role. No prize for guessing which bipartisan policy is the worst offender.
Just as not every economic issue is susceptible to a purely mathematical solution, it may be that not every social problem is best approached as if it were primarily economic in nature.
“More than half of recent college graduates make substandard wages in jobs that don’t require a college degree”
That statement should read “More than half of graduates are unprepared for managerial or analytical work, and their studies for a degree did not prepare them”.
There are misleading statistics that a college degree increases lifetime earnings by $1 million. That is producing all of the crazy policy surrounding college. People want to buy college at almost any cost to get that $1 million. It is supposedly a win for both society and the student.
But, I could use the same statistical approach to show that owners of expensive cars earn much more than owners of economy cars. All we must do is lend money so everyone can buy an expensive car! But, many unlucky individuals won’t be able to repay the loan. We’re still trying to figure out why.
Of course there would be no significant increase in incomes. The above reasoning reverses cause and effect. Funding cars would cost much money with no way to repay the investment. Expensive cars are the result of high incomes, not the cause. They are associated with success but are not the cause of success.
It pains me to explain this simple fact with respect to college educations. College degrees from exclusive institutions are associated with high incomes, but that results from choosing the smartest people from successful families with connections, who immediately graduate to jobs.
Schools select smart people, but can’t make anyone smart. Fortunately for the statistics, the failures do not graduate, so they don’t pull down the earnings average.
Motto: If you average only the successful, you get a successful average.
In our current “system”, the smartest or most focused students study something useful and are able to immediately join companies to begin their real educations. The less focused or self-indulgent (studies in 15th century poetry) find service jobs which “don’t require a degree”. The dropouts compete less effectively for those service jobs because of social discrimination, although many are just as able for those jobs as the graduates.
Easy Opinions – College is an expensive IQ test