Krugman: Think a college degree is gonna help? ... Think again!

[Bozita]

complete column available at:
http://www.nevadathunder.com/
http://www.pekingduck.org/archives/2006_02.php


Graduates Versus Oligarchs
By PAUL KRUGMAN
Published: February 27, 2006

Ben Bernanke's maiden Congressional testimony as chairman of the Federal Reserve was, everyone agrees, superb. He didn't put a foot wrong on monetary or fiscal policy.

But Mr. Bernanke did stumble at one point. Responding to a question from Representative Barney Frank about income inequality, he declared that "the most important factor" in rising inequality "is the rising skill premium, the increased return to education."

That's a fundamental misreading of what's happening to American society. What we're seeing isn't the rise of a fairly broad class of knowledge workers. Instead, we're seeing the rise of a narrow oligarchy: income and wealth are becoming increasingly concentrated in the hands of a small, privileged elite.

I think of Mr. Bernanke's position, which one hears all the time, as the 80-20 fallacy. It's the notion that the winners in our increasingly unequal society are a fairly large group — that the 20 percent or so of American workers who have the skills to take advantage of new technology and globalization are pulling away from the 80 percent who don't have these skills.

The truth is quite different. ...

more...

[unblock]

1. the secret to getting rich isn't education

the best ways to get rich:

1) start off rich in the first place. this is the easiest way.

2) know lots of rich people and be able to convince them to part with their money. for the best way to accomplish this, see #1.

[mzteris]

2. I thought it was

winning the lottery!

:sarcasm:

[unblock]

3. no, that's the key to getting a neverending stream of junk mail

and solicitations.

and apparently divorce is big among lottery winners, or so i've heard.

[raccoon]

30. Maybe because then they could afford a divorce.

Before they won the lottery, they may have felt that their limited income wouldn't cover one household, let alone two.

[ThomCat]

9. That certainly seems to be the case among the rich

people I've known.

Option 3) that I've seen is, be very good at fraud so you can get money from lots of people who aren't rich.

[Warpy]

10. Family connections mean more than having a trust fund

I know quite a few scions of wealth whose families wanted them to experience their own struggle without having great wealth simply handed to them, something that has destroyed a lot of rich kids. Those family connections meant the struggle wasn't too difficult and that they could start close enough to the top that amassing their own wealth before their inheritances came rolling in was a sure thing.

Horatio Alger is still alive, but he has to be born to a rich daddy these days.

[DBoon]

13. "choose your parents carefully"

the most important advice you will ever receive for achieving great wealth

[BlueEyedSon]

18. 3 ways: steal it, marry it, inherit it (ancient italian proverb)

[slaveplanet]

36. you forgot #3

3) sell extended warranties and don't honor them- todays #1 unchecked scam

http://www.clevescene.com/Issues/2005-10-26/news/letters_print.html

[unblock]

38. or "instant rebates"

overcharge product by $30 but have an "instant rebate" to get back that $30. all you have to do is cut out the upc seal, send the original receipt, and the rebate form, fill it out, send it in postmarked by the day before you bought it, wait 4-6 weeks, etc., etc.

i've had terrible luck getting those approved. they hire companies for the express purpose of minimizing payouts, just finding some loophole to trip you up.

or course, you can't send in the upc seal and the receipt until you're convinced that you're not going to return or exchange it -- what if it's defective?!?

[Cassandra]

4. Considering that Bernanke hired Krugman...

having to criticize him can't be much fun.

[European Socialist]

5. I have always felt that a college education is way overrated--

The reason college grads have much higher incomes is that they tend to come from the upper income groups to begin with--So when Johnny gets hired by Dad after college, to run the business, it skews the data.

[JDPriestly]

15. You are so right.

I have observed that, with maybe one or two exceptions, nearly all my friends have gravitated to just about the same level of economic success as their parents had - regardless of education.

[raccoon]

31. Yes! I've observed the same thing.

Once I read somewhere that a lot of people equate college degrees with a large income and they were confusing cause and effect.

That is to say, it was the well-off that went to college in the first place (which was almost always true some decades ago), not that going to college made them well off.

[BlueEyedSon]

19. Bill Gates is a college dropout

[unblock]

20. bill gates is atypical in many ways

but he did start with $5MM seed money from papa gates....

[BlueEyedSon]

21. Seed? That's a whole freaking tree farm!

[unblock]

22. but it seems so paltry compared to, what, $165 BILLION?

[BlueEyedSon]

24. Not a bad ROI 8^)

[bballny]

32. Bill Gates

is from a very famous law firm Kirkland, Gates and Ellis located in Seattle. He also was going to Harvard.

[slaveplanet]

37. Bill Gates daddy

was Big Blue

[Inland]

26. Well, it's overrated compared to having rich parents.

That's the point of the Krugman article.

But the decision of college vs not college, for those without rich parents, college pays off.

[Coyote_Bandit]

6. Education is the most unrecognized scam in the US

True, it has value in and of itself. But there are really only two things relevant to career success and income and those are credentials and skills. Credentials will not get you far without skills but they are required for some endeavors. If you need credentials then pay to get the best you can. As for skills, well, those are largely unrelated to formal education. But education does serve corporate interests. It keeps a fairly sizable group out of the labor market for years. And many enter the workforce with significant debt incurred to finance formal education.

edit for bad spelling

[thinkingwoman]

7. Well said!!

Spot on analysis of the current state of things!

[Bush_Eats_Beef]

11. Ralph Waldo Emerson said it best:

"The things taught in schools and colleges are not an education, but the means of education."

In short, the single greatest accomplishment of a "formal education" is empowering you to spend the rest of your life educating YOURSELF.

I'm doing work right now that is ALL about skills. I acquired them by sitting down and teaching them to myself...one step at a time, one foot in front of the other, until I get to where I'm going.

In my area of work (graphic design, desktop publishing, web design, digital photography) there are COUNTLESS "seminars" and "training classes." Most are over-priced and taught by instructors with a minimal grasp of the subject matter. None of them take the place of teaching one's self.

:toast:

[Coyote_Bandit]

16. Anything you master

whether it be a field of knowledge or a skill set is something that you have to make your own. It is something that educational institutions simply cannot impart.

I have 3 graduate degrees and 2 professional licenses. Knowing what I know now I will say that if I were 18 again I would forego my investment of time, effort and money into higher education. I would learn a trade instead.

Education in the sene of being well read and capable of thinking and analyzing critically is something you have to do for yourself. It is unrelated to formal higher education.

[bballny]

34. Ding Ding Ding

The only fields to go into today are ones that self employment is an option or cannot be outsourced. We are trying to steer our daughter and son into law. If not become an electrician or a plumber. They will always be in demand for those skills. . I own my own business. I generate sales leads for small and medium sized companies. I was in sales for 20 years and got sick of management. I now cold call for hire and I am really good at it. I don't have to worry about India or any of these cold calling factories. I can get to the highest level in any company.

[Coyote_Bandit]

40. Law?

That may not be the career choice you understand it to be. I say that as someone has been licensed in 2 states for an extended period of time. One of those states regularly surveys it membership. The vast majority of attorneys are fully self-employed. Many never worked in a law firm before being forced to begin their own practice. Law schools are notorious for providing lots of theoretical knowledge and almost no practical skills. The average male attorney earns about half of what the average male family practice medical doctor earns. The average female attorney earns about half of what the average male attorney earns. And there are about 90 people for every actively licensed attorney. Think of 90 people in a typical cross section of society. Consider how much work they will generate and pay for year after year. A fairly significant number of my former law school classmates have left the practice for traditional employment. Why? The two most common reasons are to earn a better income and to escape the always combative environment of the legal profession. Some people really are not emotionally and psychologically equipped to get up and go off and fight somebody else's war day after day after day for years on end. And that ultimately is what much of the legal profession is about - strategically avoiding conflict and prevailing when conflict occurs. The legal field is a highly competitive field and it is overcrowded. It also requires a substantial investment of time, effort and money to enter the field. That said, there are definitely certain areas of practice that can be quite lucrative, have much less competition, and offer long term stability. The two that immediately come to mind are patent law which requires a strong science background and tax law. Another excellent choice is to combine a law degree with a CPA. The practice could certainly use some more truly good and talented folks. But it has some fairly significant barriers and is not necessarily what is popularly portrayed.

[JDPriestly]

17. Good observation.

That is why the constant criticism and blame against teachers is just a big red herring. The student learns. That is the sum of it.

[smoogatz]

28. I have to take issue.

I agree that we're being sold a bill of goods, but in the form of false expectations--education itself is not to blame. A college education is not intended as vocational training (except perhaps in the case of professional schools--law, medicine, business, etc.). A liberal education (catchy phrase, eh?) is intended to expose students to a broad range of information; science, literature, languages, and so forth. But mostly it's intended to teach us to think--a skill with which few of us are born. Critical thinking, expressing complex ideas in writing, weighing opposing ideas on their merits, finding the best among a range of complicated choices and other forms of problem-solving, and formulating and expressing creative solutions are the "skills" one ought to acquire in college--it's really not just the piece of paper.

That said, the current student-loan environment IS a scam, perpetrated openly on the public.

[Coyote_Bandit]

33. The thing is

"Critical thinking, expressing complex ideas in writing, weighing opposing ideas on their merits, finding the best among a range of complicated choices and other forms of problem-solving, and formulating and expressing creative solutions" are skills that a person can chose to exercise and develop without the necessity of obtaining formal higher education. Indeed, many with a great deal of formal education fail to demonstrate those very skills. People do not become educated in this broad sense simply because they have a diploma - or because they have a basic understanding of logic or philosophy. People are educated in this broad sense because they choose to be. They chose to apply and use the knowledge and information that they already have. It has very little to do with formal training. It has a whole lot more to do with personal motivation and values.

All too many Americans continue to carry the illusion that higher education is related to vocational and career success. And by necessity most value their financial survival more than their ability to think critically. I'm not defending that. It is just an observation.

[smoogatz]

35. Education is the express lane to critical thinking.

It's obviously not the only route (my grandfather didn't go to college, but was an extremely astute guy, for instance)--but it can certainly speed up the journey for those who are so inclined. Work at anything full-time with decent instruction and you'll likely master it more quickly than you would part-time, on your own. As you say, though, a degree is in no way a guarantee that everything one says and does will be the product of one's critical thinking skills--any more than a degree in medicine guarantees good health, or a degree in psychiatry guarantees your sanity. What you do with your education is ultimately and entirely up to you. The best advertisement I can think of for the connection between higher education (they call it that for a reason!) and enhanced critical thinking skills is this: statistically, the more years of college/graduate education you have, the more politically liberal you're likely to be. So there you go.

I should add that obviously you're right in one regard--plenty of people buy their degrees and never learn a goddamn thing, let alone critical thinking. Bush being a prime example.

[Coyote_Bandit]

39. Education is a tool that better facilitates critical thinking

and I definitely agree that critical thinking skills are dependent on a certain minimum level of knowledge and literacy. But that tool is useless without the personal motivation to actually use it. The two go together.

I know a guy who was in his school gifted and talented program before eventually dropping out of high school, earning his GED and then dropping out of college. He is widely read, highly successful and has excellent analytical abilities. I know someone else who barely skated through high school and has atrocious writing skills. He is one of the most persuasive local Dem volunteers that I know. Why? Because it is something he cares about. He too is quite successful.

I think we foster and reinforce the image of elitist Democrats when we insinuate that only those with formal higher education have critical thinking skills (that is a general observation - I realize that is not what you said so please don't take this as criticism directed at you). It is simply not true. There are highly educated people who seem completely lacking in those skills while others who have no formal higher education are quite capable of analyzing issues. It really is a snub and an insult to imply that those without formal higher education are somehow incapable of critical thinking. It is every bit as much a stereotype as saying that all black people are interested in is looting and dealing drugs.

Also, I would note that many colleges and universities have chosen to focus on knowledge of various subject matter rather than the ability to synthesize and analyze information. That has resulted in an educational process that often focuses on rote knowledge rather than actual insight. And regardless of the label applied that is not "higher" education. But it is a whole lot easier for the profs and grad assistants to machine grade those bubble cards than it is to grade hundreds of papers. It is time that we recognize that our colleges and universities have become business organizations rather than educational organizations.

[smoogatz]

42. I think your tendency to generalize undermines your argument.

There are still lots of great liberal arts colleges/universities that are actually educating people, not just training them to be corporate drones. In my fifteen years of teaching at the college level, I've never once given a multiple choice quiz--except maybe as a joke. That said, it's true that the big research institutions tend to treat undergraduate instruction as an afterthought--I certainly wouldn't send my kids one of the big state mega-schools unless they had absolutely no other choice.

[Coyote_Bandit]

43. I see

I generalize and therefore you dismiss my argument. Meanwhile, you have a vested financial interest in advocating your position. I think that shows you are biased and it undermines your position.

For whatever relevance it may or may not have, I have three graduate degrees including a masters degree in educational administration and a law degree. In my 10 years of higher education across a variety of educational institutions I personally saw lots of profs and grad assistants making widespread use of those mechanized bubble test cards. I have also seen some profs perform far beyond expectations.

I think often of the man who taught my modern philosophy class. In one semester we read 20 philosophy books (full length source writings not textbooks) and wrote separate formal full length (10+ pages) research papers on 16 different philosophers. All for 3 hours undergraduate credit. The man who taught that class was a concentration camp survivor. One of the books we read was Elias Cannetti's Crowds and Power which was inspired by observations of crowd reactions to Hitler.

I have nothing but respect for the profs who really make the effort to teach and develop analytical and critical thinking skills. I personally am grateful for the efforts of many who put forth that effort in teaching my classes. Some of them I will never forget.

[smoogatz]

44. I didn't dismiss your argument, for God's sake.

I agreed with most of it. But it's just not true that all of our institutions of higher learning are two-bit diploma mills, which is basically what you implied in your previous post. I am biased, true enough--in the sense that I'm a believer in learning for its own damn sake, which is still possible at some colleges and universities, for those who care to undertake it. Sheesh.

[lostnfound]

29. Not to mention, "dumbing us down"

It makes for a more compliant, leader-following workforce -- standardized the way that nuts and bolts were once standardized?

[mike_c]

8. well, I have a Ph.D. and professional job...

...and I still live pretty much paycheck to paycheck, at 50 years old. Granted, I have high student loan debt that eats up about 25 percent of my paycheck every month. But the real value of my degrees is that they enable me to do work that I truly enjoy. I'm not working to make someone else rich, either.

[bigscott]

12. if it were not for a college education

I never would have landed my first "real" job. Now, 99% of what i have done since has nothing to do with what i learned in school, and everything to do with what I have learned on the job. I graduated with minimal student loans thanks to financial aid (which no longer exists) and a scholarship. I am hoping to give my son a head start by trying to get him through college with minimal loans as well. Starting out in debt is not the way to go! Of course, he could become a plumber and use his college fund to start his own business (and re-do my downstairs bathroom for me)

[Canuckistanian]

14. Wow, unbelievable numbers

But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. No, that’s not a misprint.

[Bozita]

45. Those numbers scream for attention!

[madrchsod]

23. starting salary for most degreed social workers

is far less than driving a dam truck.of course it`s comparing apples and oranges but why does our society value truck driving over social workers?

[IdaBriggs]

27. One gets paid by a corporation; the other by the tax payers. nt

[htuttle]

25. We're hiring a LOT of college graduates nowdays -- lots of post grads too

Unfortunately, I work at a taxi cooperative...

At the moment, we have a least two PhD's in the fleet, a half dozen Masters-degree holders, and scores of undergraduates.

Our drivers just love graduation day here at the UW. As they chat with their graduating-student-and-parents fares, they often like to mention how many college degrees they have. I'm told the looks on the passengers' faces' are priceless...

[Nikia]

41. The problems as a college graduate that I see

1. Except in a few selct fields, there are more college graduates than jobs that require college graduation. Many college graduates hold jobs that do not require a college degree. In some cases, having a college degree did give them an advantage in getting the job. In other cases, their degree made them "overqualified" for other decent jobs.
2. Some jobs requiring a college degree do not pay much better than jobs that don't require degrees. People complain that teachers do not get paid enough which is true. If you look in the want ads though, you will find that teachers aren't the only college grads who are expected to work for relatively low wages.
3. Being highly educated will usually not result in a lot of pay unless you are employed in a specific high paying field. PHDs who work at colleges and universities are middle class if they have full time tenured positions. Others don't even do that well.
If I had do do college again, I would have focused more on "making connections". I would have also double majored in a vocational area and a liberal arts area to show that I had skills and was well rounded. I would have also have been sure to get an intership.
A lot of young graduates are losing out on their dreams. Others who have managed to get good jobs find themselves laid off with no prospects at more than half their previous salary.

[raccoon]

46. True, and has been true for a long time.

"Except in a few selct fields, there are more college graduates than jobs that require college graduation. "