#025 April 16, 2009
How do we Retrieve the Value of an Education?
By: Allen Wells
As we’ve discussed, minimum wage laws and government hiring restrictions and requirements severely hamper the market’s ability to set wages and prices in a competitive manner. Businesses are operating at a disadvantage when it comes to the ability to hire and train inexperienced workers.
The question is, “What happens to all these young, inexperienced future employees?” Colleges and Universities have taken over as the “master trade” and training organizations. This is proving to be a failure. A college education is often unbearably expensive, leaving the student (or the student’s parents) in debt far beyond any concept of rhyme or reason. Each day the Federal Government is offering newer and longer payment terms on student loans. Students pay for a “well rounded” education, most of which they will never use after they depart the doors of the hallowed institution. The truth is, most of this “well rounded” knowledge is useless and forgotten as soon as the student leaves the classroom (after final exams).
Since businesses, required to pay above market value for young inexperienced workers, cannot afford to pay to hire and train them; the future workers instead pay tens of thousands of dollars to earn a college degree. A degree, that for the most part will leave them woefully unprepared for their future career.
This is an amazing turnabout. Our education establishment has been able to take apprenticeship programs that in the past paid a nominal salary to the apprentice (often times including room and board in addition to the salary) and convince the American parents that their children will be much better served and prepared for the future if the parents pay tens of thousands of dollars to the colleges and universities for their child’s training (hopefully)… and even pay additional funds for room and board!
We have the attitude that if someone works for a business for 4 – 5 years with minimal pay (maybe even barely above subsistence level) to learn a valuable trade or skill that will support them and their family for the rest of their life - in some way this is bad, degrading and demeaning. We have agreed that the government should not allow this and set minimum pay and hiring requirements and price this training above the market value, essentially rendering this concept unworkable.
On the other hand, we have the attitude that if someone goes to an “accredited” college or university for 4 – 5 years, with NO pay (not even at minimum subsistence level) to learn a vague, indeterminate degree in liberal arts, business, marketing, etc. from which they will not even have the training to start anywhere above a starting level position; this is good, something to be proud of and the experience will make you smarter, better and more prepared than others. Oh, any by the way, did I mention the student (or their parents) paid tens of thousands of dollars for this opportunity and will probably be in debt for many, many years as a result of this experience.
With minimum wage laws and the costly government requirements for hiring and employment, colleges have been able to usurp the genuine position of businesses to hire entry level personnel at a reasonable cost and train them to be worth more money, the result of which, after a couple of years, they can be paid more (more than an entry level college graduate).
Instead of apprenticeship programs that are managed and owned by businesses we have college degrees. When a business hires the recent college graduate, the new graduate still must be trained and taught the particular skill sets required for the position.
The difference is this:
When a person completes a 2 – 5 year apprenticeship program they are knowledgeable, trained and skilled. They also have a job. They are “paying their own way.” They (or their parents) are not tens of thousands of dollars in debt. In addition, they know if this is the “business for them” and can move forward on their career path as a successful productive citizen.
When a person graduates from 4 – 5 years in college they are untrained, and unskilled in the day to day aspects of their chosen profession. They must find a job, and figure out how to pay back the tens of thousands of dollars paid for their “education”. Often times the young graduate realizes their degree is in a field totally unsuited for their desires, ability or temperament. The answer? Settle for a job they are unhappy with, or go back to college and get more education!
If we put less emphasis on a college degree and more emphasis on training and skill sets, our country would not only be more productive, but we would not be losing all of our manufacturing and other skilled positions to the rest of the world. As a result of government regulation, unfair expense to businesses (in the form of minimum wage laws and other hiring and employment expenses) we have made college the required “apprenticeship” program for most of our youth. By the way, this apprenticeship program is managed and taught by people that have [usually] never worked in the business world a day in their life.
Many of our youth would be far better served to forgo a college degree after graduation from high school and find an entry level job at a company (part time or full time). If desired, this person can go to college at night, or (if sufficiently self motivated) take the college classes by examination. The education expense will be far, far less and he will be trained on the job and experienced. In 4 – 5 years when his peers are graduating from college, thousands of dollars in debt, unskilled and inexperienced, he will be far more knowledgeable and far more marketable than his peers.
I’m not saying that colleges are bad and that everything that is wrong these days is a result of colleges. I’m just saying, colleges are way overrated. Let’s get back to a system of apprenticeships. Let our businesses have the freedom and ability to hire and train young, inexperienced workers and teach them how to be profitable – first for the business, then for themselves.
With warmth and regards (as always),
Allen
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