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Under-producing and Under-performing: American Higher Education Needs 200 more Universities

September 13, 2011
Comment and Review, Policy
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They are consistent memes.  We do not have to invest in American colleges and universities because (1) most jobs do not require a college degree, (2) there are too many college students already, or (3) long-term income is not related to level of education.

I hear their echos at neighborhood social gatherings. CCAPs Richard Vedder has been touting off-shoring and the shortage of tradesmen as a reason for not “mindlessly increasing college enrollments” for several years now. They are a consistent talking point in states that feel the need to reduce their expenditures and see the public university system as a fat, juicy target.  If college graduates wind up driving cabs and flipping burgers — cartoonish versions of the truth —  what is the real value of a college diploma?

Before anyone else buys into the idea that we need fewer — not more — college graduates, we should probably go to the videotape. A report entitled The Undereducated American casts grave doubt on some underlying assumptions that sound plausible on the surface but seem to crumble away when they are examined more closely.

Anthony Carnevale and Stephen Rose focused a lens on the production of college graduates compared to the market demand.  They concluded that

  1. The United States has been under-producing college trained workers since at least 1980.
  2. Supply has failed to keep up with demand, resulting in a ten-year shortfall of up to 20 million graduates.
  3. The underproduction of college graduates is a significant cause of income inequality in America.

The most striking thing about their analysis is that it relies on traditional economic theory. Employers would have to be in a national conspiracy to behave irrationally to conclude otherwise.

According to Carnevale and Rose, the demand for college graduates has been growing at 2% annually since 1980 but the higher education system has been falling short of that demand by at least 0.5%.  That’s a current deficit of 20 million college trained workers.

To put that in perspective: it would take an additional 200 universities the size of Georgia Tech just to fill that gap.

What about the idea that college graduates are being shunted into low-wage jobs that “don’t require a degree?”   In truth college graduates hold only a tiny percentage of the jobs for which a college education is overkill. College-trained workers account for only 7% of the total number of cashiers and hairdressers for example.  It is simply not true that the nation’s colleges and universities are producing overqualified line cooks.

Remarkably, even in those cases where a low skill job is held by a college graduate, a bachelor’s degree results in a “wage premium” for workers. On the average, college-educated hairdressers earn nearly 70% more than their high-school graduate workmates.  Retail sales clerks fare even better:  the 18% of  the retail sales personnel who have college degrees earn 73.2% more than someone who has only a high school diploma.  It is a wage premium that grows to 75% for some middle skill jobs.

Carnevale and Rose also analyze income discrepancies across the entire economy, concluding that the lack of college-trained personnel to fill available positions is a cause of income inequality.  It is a problem that is compounded by the increasing selectivity of some colleges and universities.  They with increasing frequency select their freshman candidates from a narrow socioeconomic pool.  So, not only do they earn more, but they come from families with disproportionately large incomes and personal fortunes.

Arizona State president Michael Crow once laid a large chart in front of me and pointed out that “The United States has not increased capacity in higher education since 1960.”  He was right.  We need 200 more universities just to get back in the game.

“Slowly I turn….”: Academic Hot Buttons

September 12, 2011
Culture
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Nothing like a hot button to get a conversation off on the right foot. They are sometimes understandable (poor Moe!). Academic hot buttons are interesting precisely because they are — at some level — irrational. Just mentioning some topics provokes a predictable and outsized reaction. It’s as if context doesn’t matter and facts can be brushed aside. These are not discussions so much as border skirmishes where the very idea needs to be vanquished as soon as it rears its head.

It was inevitable that Abelard to Apple would provoke “Niagara Falls…” moments. Here are my current favorites:

  1. Technology: You only have to say the word and to call down the wrath of purists who want to claim (a) you have lost your mind for wanting to replace teachers with grainy online videos, (b) there is incontrovertible proof that the current — that is to say the millennium old sage on a stage — method of organizing classes around lectures and exams is still the best, (c) accrediting agencies will rain down fire and brimstone at the merest utterance, or (d) you must be on the take from the evil For-Profit institutions. Not much room for discussion here. Never mind that a majority of university presidents now embrace both online instruction and the increasingly sophisticated online tools or the growing body of research that points toward the value of blended approaches.
  2. Business Model: “Student are not customers!” and “We do not make products!” are the enraged cries of some of my academic colleagues. Sometimes things spiral out of control so fast that I don’t have time to say, “Yes, but…” As in “Yes, but universities take money in, spend money, and if what they spend is more than what they take in, they go out of business.” As I’ve mentioned before in this blog, the number of institutions facing insolvency as a result of ignoring business fundamentals is growing at an alarming rate. Student debt is now unsustainable. Public confidence continues on a 20-year downward path. Even if you firmly believe that putting “college” and “business” together in the same sentence is morally indefensible, you still have to make payroll next week.
  3. Homogeneity of university leadership. This one is tougher because I have so many friends who are presidents. “We are not all cut from the same cloth!” and “I say what I say because my institution is [insert positive characteristic here].” is their response. As Clark Kerr pointed out a generation ago it’s not only training and culture that matter here. The inaugural addresses of university presidents are largely interchangeable. Their view of the challenges facing higher education is uniformly out of sync with the general public. For example: a recent Pew poll found that while the majority of Americans feel that a college education is increasingly unaffordable and not doing a good job, nearly 80% of college presidents think they are doing an excellent job.

I’ll keep track of the reactions of my colleagues and let you know what the trends are.

I will have something to say soon about the value of courses in the liberal arts and humanities. I can almost hear it now:

“Slowly I turn, step by step, inch by inch…”