Subsidies Create Glut Of College Grads
Higher Education: A new study finds almost half of Americans with college degrees are working at jobs that don't require one. It's the latest example of how federal subsidies are creating a massive higher-education bubble.
The study, by the Center for College Affordability and Productivity, found that an incredible 48% of college graduates — about 13 million of them — hold jobs that don't require a bachelor's degree. About 5 million have jobs that don't even require a high school diploma.
There are, for example, roughly a million sales clerks, 300,000 waiters and 100,000 janitors with college degrees.
This mismatch is up sharply from four decades ago, the study found. While 1% of taxi drivers had a college degree in 1970, to take one example, 15% do today. Back in 1967, fewer than 11% of college grads were overqualified for their jobs.
And this problem is not likely to get better anytime soon. Only seven of the 30 occupations projected to see the biggest growth over the next decade require any post-secondary education, the study found.
As a result, while colleges will churn about roughly 19 million college graduates between 2010 and 2020, the market will likely create fewer than 7 million new jobs that require at least a bachelor's degree.
Weirdly, at the same time, the country faces a shortage of skilled labor — plumbers, electricians, carpenters and the like.
A study by Deloitte out last year found manufacturers couldn't fill as many as 600,000 jobs due to the lack of skilled workers.
Another by the Boston Consulting Group found that this shortage could reach 875,000 by the end of the decade.
In a normal market, a huge excess in supply would send a signal back up the chain to produce less, and as a result, demand for expensive college degrees would drop. At the same time, the number of people learning a skilled trade would increase to fill that shortage.
But while college enrollment has declined slightly in the past year, it continues near historic levels. College costs continue to skyrocket, shooting up at three times the rate of inflation, which in turn has led to a doubling of average student debt.
In fact, the amount of student loan debt now tops $1 trillion, and is growing fast, while default rates are climbing.
If this all looks strange and mysterious, it is. Until, that is, you realize a big reason for all these distortions is the massive federal effort to encourage and subsidize college education.
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