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The College Bubble Is Starting To Burst — And That’s A Good Thing

Sep 14, 2018 by

Useless Degrees: A good indication of a tightening labor market is the fact that several major corporations have dropped their college degree requirements. College just became an even bigger waste of time and money for many.

Job recruiting site Glassdoor recently reported that companies like Google, Apple, IBM, Bank of America no longer require that applicants have a college degree.

Neither do companies like Costco, Whole Foods, Publix, Chipotle, Home Depot, Starbucks. (Does it really take a college degree to know how roll a burrito, pour coffee, or stack giant jars of mayonnaise?)

When jobs were scarce and unemployed workers plentiful, requiring a college degree might have made some sense, if only to easily weed out most applicants. When workers are scarce, companies can’t be so picky.

But in any economy, there’s a downside to college requirements. Limiting the worker pool to graduates feeds into the notion that everyone has to go to college, when many kids shouldn’t. It also eliminates opportunities for the two-thirds of people without a degree, many of whom would probably be better workers than pampered graduates holding a degree in sociology and lugging a mountain of debt.

Further fueling this college bubble has been an upward spiral of federal grants, aid, subsidized loans and tax credits. College Board data show that federal college aid shot up 93% between 2001 to last year, after adjusting for inflation.

Not surprisingly, colleges and universities have been happy to take advantage of this artificial demand by raising tuition with impunity. Over those same years, public college tuitions climbed 72%.

Fueling Paper Pushers

Where did all that money go? As economist Mark Perry notes, mostly to overhead. College administrator jobs have climbed much faster than student enrollment.

In the rush to enroll as many students as possible, colleges clearly have been lowering their standards. Walter Williams points out that only 37% of today’s high school graduates are proficient in reading and 25% in math. Yet colleges will enroll more than half of them. “It’s inconceivable that college administrators are unaware that they are admitting students who are ill-prepared and cannot perform at the college level,” he says.

Meanwhile, good-paying jobs that require real skills, like electricians, carpenters, and so on, are going begging. The Associated General Contractors of America says that 70% of construction companies are having trouble finding qualified workers. The Department of Education forecasts that the next five years will see 68% more infrastructure job openings than workers with the skills to fill them.

If the current corporate trend away from college requirements catches on, it would go far to burst the higher education bubble. And that would be a very good thing. For students, their parents, taxpayers. And for the economy.

Source: The College Bubble Is Starting To Burst — And That’s A Good Thing

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