The Collapse of the Value of a College Education

by Robert Wenzel Economic Policy Journal

Recently by Robert Wenzel: Homeland Security Has Purchased 2,700 Light-Armored Tanks

College education has become expensive and nearly useless. Got that? Price up, quality down. No surprise, when government gets involved. Even WSJ seems to get this (partially). In a recent article, they write:

By some measures, nearly half of employed college graduates are in jobs that don’t traditionally require a college degree. Unfortunately, WSJ seems to blame this on robots: Ia paper released Monday by the National Bureau of Economic Research, a team of Canadian economists argues that the U.S. faces a longer-term problem.  They found that unlike the 1990s, when companies needed hundreds of thousands of skilled workers to develop, build and install high-tech systems—everything from corporate intranets to manufacturing robots—demand for such skills has fallen in recent years, even as young people continued to flock to programs that taught them.

If it was simply a case of robots replacing workers in certain jobs, this would mean that there would be productivity gains for the economy overall, beginning and end of story. But, it is not as though we live in paradise where goods and services are so plentiful that none of us has to work. Something else is going on

The problem is that a college education for the most part does not  increase the value of a potential worker for an employer (aside from accounting and engineering degrees). The college system is far from a free market profit oriented system. Almost 100% of colleges take money from government or accept students who receive government loans. This results in colleges being required to meet government guidelines which have dramatically dumb downed the system. The Chinese government has created 60 million vacant apartments through its central planning policies, while the U.S. government through its intervention in the education system has created tens of millions of college graduates with vacant minds. College for most is really a waste of time, unless you want that accounting or engineering degree, or you are really sharp, can get into an Ivy League school and have a strong enough mind that you won’t be corrupted by the system. In this latter category, I suspect no more than 1 in 500,000 could pull it off. Tom Woods did it, but few others. I can think of many more that were swallowed up by the system and now spend their time justifying some intervention in the economy. If you are interested in studying Austrian economics, just go to the Mises Institute web site and absorb that material. Studying under Professor Walter Block at Loyola University New Orleans or Richard Ebeling at Northwood University are outlier options, but that is about it. For most who want to advance, they are much better off reading James Altucher than going to college.

Reprinted with permission from Economic Policy Journal.


2013 Economic Policy Journal