April 23, 2012

Why are college grads so underemployed?

"More than half of America's recent college graduates are either unemployed or working in a job that doesn't require a bachelor's degree...."
When there were fewer graduates, a generic college degree used to be a valuable credential. Now that the market is flooded, diplomas count less, and specific skills count more. This means that, in many instances, associates and technical degrees may be more financially valuable than a liberal arts degree. After all, some of the fastest growing job categories are expected to be in so-called "middle-skill" positions such as nursing, which do not require a full, four-year education. It's one more sign that, for people seeking to fix America's employment picture, "college for all" is the wrong mantra. We need to be talking about "skills for all" instead.

95 comments:

mesquito said...

I'd trade my B.A. for a welder's certification. In a heartbeat.

chickenlittle said...

So the graduations hang on the wall, But they never really helped us at all, no they never taught us what was real, iron* and coke and chromium steel. And we’re waiting here in Allentown. -Billy Joel
________________
*Unless you're from Madison, Wisconsin, where iron mining is frowned upon.

Bart Hall (Kansas, USA) said...

In my small business, any job applicant carrying a degree involving two words -- especially if the second word is "studies" -- won't even be called for an interview.

At least my fenceposts are grounded in reality, and they don't complain about sweating or having to do their job on some Saturdays.

Maguro said...

It's almost like there's something to that whole "supply and demand" thing.

Pastafarian said...

Half of the grads can't find jobs in their field because twice as many people go to college as we need.

You'd think people would stop going to college in such large numbers after a while; maybe it's an inertia that keeps the over-enrollment going, or maybe it's the fact that college, these days, is mostly just a big four-year beer-and-diddling party.

(Yes, that's right, get the hell off of my lawn.)

And I'm sure the federal government giving people low-interest loans for tuition is a factor, too.

And in the meantime, we can't find a guy to set up CNC swiss screw machines. That barista at Starbucks with the master's degree in womyn's studies was probably bright enough that he could have become a CNC machinist instead. But now he's making $8 plus tips instead of $20 per hour.

Don't Tread 2012 said...

Reality eventually catches up with all schemes.

History and art majors can confirm.

This country has been sold a bill of goods regarding 'higher' education.

Talk about chickens coming home to roost!

A 2 year tech degree will get you farther than most of the useless B.A.'s floating around.

bagoh20 said...

I guess there is a need for liberal arts degrees so that other liberal arts graduates have someone to talk to about liberal artsy stuff, but it seems to me that even those people should learn some hands on skills. To me, it's hard to argue that you have any useful wisdom without the experience of being a capable human that can make something real with your hands.

Of course, you might have extensive knowledge and even insight in a particular area, but without fleshing out your world of experience in the real physical world around you, the knowledge you have is like a kite without a string. It doesn't fly better being free from it's anchor, it's just blown around by weightless formless forces, all acting on each other and never touching the world except as slightest mass of spent potential.

roesch/voltaire said...

The degree is only half, the person the other half of what counts, why is that so difficult to understand? I know folks who got BAs in English who are thriving, while others with degrees in computer science have returned for additional work because they lost their jobs at HP.

jimbino said...

Get ready for certification inflation. It won't be long before all nurses are required to have MSN degrees and interior decorators PhDs and state certification.

Too bad we can't require advanced degrees, certification or even common sense of breeding females.

AJ Lynch said...

"Marketable" skills for all who want a decent future [fixed that for you].

Dust Bunny Queen said...

Why?

1. They (mostly) went to college and learned Jack Shit. To quote Pastafarian "Just a big four-year beer-and-diddling party." Wasted time and money on stupid degrees that mean nothing to no one.

2. Job skills that are desired by the employers are only taken by those few (Nerds!) No real skills in reading, writing, math or practical applications of any of the above. The ability to think on their feet.....drummed out of them by 16 years of dumbed down teaching by teachers that have been dumbed down ....on and on world without end.

3. They picked up the liberal socialist indoctrination from their professors and offend the hell out of their prospective employers with their snobby and snotty better than thou attitudes.

4. Their attitude...see item #3. Too good for this current job. It is beneath them and it is obviously a slumming stepping stone to something better. From the employer's standpoint.....who needs you and your attitude and your crappy work ethic.

5. Thinking the world owes you a living. That the world owes you anything. They are a bunch of adult babies.

Get off my lawn. LOL.

edutcher said...

Guys like CS majors call Liberal Arts degrees "Ya want fries with that?" degrees.

It shouldn't be so - learning for its own sake is a good thing, but only so many people can make a living off a BA in History.

The other is this whole business is that a college education is a right.

No, it's something that's earned by one's scholarship. That one's going to die hard.

jimbino said...

Get ready for certification inflation. It won't be long before all nurses are required to have MSN degrees

It's already happening. In a lot of the technology fields, certification has replaced the diploma as the required credential.

In nursing, the MSN isn't required yet, but, at the place where The Blonde worked, the LPNs, diplomates, and ASN are being squeezed - get your BSN or get out.

AJ Lynch said...

The college industry has been a Ponzi scheme for quite awhile. Let's hope professor that the feds don't decide to "claw back" part of your lifetime earnings for being a beneficiary of this Ponzi scheme. You would not want to be writing a big check like the NY Mets owner had to write.

Ken said...

Why are college grads so underemployed?

Is this a real question? Do you really not know the answer? A quick summary: government started to really subsidize higher education a couple decades ago. Colleges and universities know a cash cow when they see one - easy federal money. They started saying falsehoods like "everyone can go to college" and "having a degree guarantees you a higher income". They lowered standards to accept people they knew shouldn't be in college, but were more than willing to accept their tuition money and encourage these people to go deeply into hock to do so. Then to keep many of these people from feeling like losers due to failing out, the curriculum got watered down and classes like American Cinema arose, as well as nothing degrees like Black Studies.

College administrators and faculty saw the suckers in tax payers everywhere, then bilked them out of as much money as possible with government collusion. Only about 10-20% of people have the smarts to really take advantage of what higher education has to offer. In order to make room for the rest, nothing degrees and classes have been invented in order to part fools from their money.

garage mahal said...

Cheap loans. And liberals.

Just end the thread here.

m stone said...

Lynch: The college industry has been a Ponzi scheme for quite awhile.

True.

Fully half the kids and adults I've taught at two universities in the last 15 years have no business being there. Probably half of them wash out in a year or two once the scholarships and grants dry up.

Revenant said...

The company I work for doesn't hire people who are just out of college. The executives' view is that it isn't worth the expense of training them to be useful.

bagoh20 said...

I have hired and trained literally hundreds of people who had no skills or experience. Most of them in a matter of a few months had enough skills and work habits developed to make a decent living for the rest of their lives and some used that basic foundation to build a more substantial career, or start a business of their own.

I hired six people last week. Two got fired their second day for coming late. The other four are being taught welding, and CNC machining. If they can keep their jobs, which is not really hard, they will greatly increase their earning potential in just a matter of months. We like to hire unskilled people, and we try not to hold a college education against those who have it, but experience has shown me that nothing is quite as debilitating as a modern college degree. It's almost like a disability.

We teach unskilled, uneducated people to run expensive computer-controlled equipment; to operate lasers, machining centers, and other equipment. We teach them to do computer aided design, to develop products, understand quality assurance, accounting, management and business. Most important we teach them the simple habits needed to keep a job. We do this very quickly, because they are a liability until they develop some skills. It doesn't take much time to take a person from useless to indispensable if that's what you concentrate on.

Now if we got paid to house these individuals for 4 years and then send them on their way, we would have different results. We would still make money on them, but they would be getting far less in return.

Craig said...

My degrees in English have been a real boon to my younger brothers who have done well in construction and golf without college degrees. The youngest played two years of golf on scholarship at a community college and turned pro rather than use his last two years of eligibility at a four year school. He earned an associates degree, but didn't bother collecting it.

Carnifex said...

I can build a house from the ground up. I've designed them, I've designed custom cabinetry. There isn't a job on the lot I haven't done, from foundation work to roofing, from framing to finishing, from electrical wiring to plumbing, and from drywall to to painting. I have done it for 40 years.

Now, I'm broken down, hard of hearing, have at least 1 fist sized hernia, and other medical problems. And I can't find work. With the age and the medical issues, and what I need to make to pay my bills, It's cheaper for companies to hire Mexicans, and kids outta' college.

I know plenty of other carpenters in the same situation.

We all got troubles...ours isn't hoity toity enough to merit an article. The American Home Industry eats us up. I don't know a single skilled laborer that doesn't have health issues.

The government gets big bucks to look the other way when the illegals come in. I wish they would look after their own people for once.

I don't blame the Mexicans by the way...They're only trying to improve their lives. Unfortunately, it is at the cost of ours.

If the government would actually punish people for hiring illegals, they would go home voluntarily, and the jobs would be available to Americans.

This is a simplified dynamic. It would take a book to explain it fully.

crosspatch said...

If I had a job to fill and four applicants and two applicants had a degree, chances are the applicants with a degree would have a better chance of getting the job. In that circumstance there would be three unemployed people. 100% of those without a degree and 50% of those with a degree would be unemployed. It would seem as if having a degree would improve your chances of finding a job.

Now if I have one job to fill and four applicants and all four have a degree, I will still hire only one of them. In this case 75% of the people with a degree are unemployed.

The key is not to increase the number of degrees, it is to increase the number of jobs. If I were to give everyone a degree, the chances of employment would be no different than if nobody had a degree.

The degree only gives you an edge when there are more total applicants for a position than degreed applicants. Once all applicants have a degree, it is no edge whatsoever.

Robert Cook said...

People--college grads or not--are underemployed because all the "job creators" are busy creating jobs overseas where people work dirt cheap compared to the wages necessary to sustain the American middle class.

This is no mystery, as much as interested parties may wish to obfuscate the reality.

bagoh20 said...

"If the government would actually punish people for hiring illegals, they would go home voluntarily, and the jobs would be available to Americans."

I just heard on the radio that the illegal population has dropped dramatically in the last couple years do to lack of jobs. I also think a lot of it has to do with the adoption of the online verification program that makes it much harder for them to get hired.

They can still beat the system with the right connections, but it has come a long way since the days when employers just hired whoever came through the door. Five years ago it was virtually impossible to tell if someone was legal to work. There are millions of legal immigrants who don't speak English, as it has always been. You need an on line system that matches photos, which we now finally have.

Kchiker said...

"This country has been sold a bill of goods regarding 'higher' education.

Talk about chickens coming home to roost!

A 2 year tech degree will get you farther than most of the useless B.A.'s floating around.”

A 2 year tech degree IS higher education. I think it’s rather elitist to contend otherwise.

Kchiker said...

"I just heard on the radio that the illegal population has dropped dramatically in the last couple years do to lack of jobs. I also think a lot of it has to do with the adoption of the online verification program that makes it much harder for them to get hired.”

Deportations are also way up since Obama took office.

Peter said...

One thing that's easy to overlook in the article is that the unemployment/underemployment rate was 41% in 2000, a year when the economy was quite strong. Not a whole lot lower than today's 53.6%. What's really happening is a structural problem, namely too many people going to college, that exists whether economic conditions are good or bad.

Pogo said...

"Why are college grads so underemployed?"

Not to be silly, but it's because there are no jobs.

There are no jobs because of Obama and the Democrats.

Many people on this blog predicted this outcome. And here we are.

The solution is obvious. Want more college-educated baristas? Re-elect Obama.

bagoh20 said...

"the "job creators" are busy creating jobs overseas where people work dirt cheap compared to the wages necessary to sustain the American middle class."

The job creators are born overseas now. They don't need American companies to move work there.

Americans are in love with cheap stuff, that's what fuels the jobs overseas. Don't blame the companies that leave. They only have the choice between that or going out of business, because Americans will buy the cheaper foreign product most of the time. And in fact, that's a good thing. Should Americans refuse value, and let the rest of the world have it all? I say this as a business owner who's company motto is "Made in The USA" as 100% of our products are.

We compete head to head with Chinese companies and usually win, but if we didn't have them forcing us to be our best, our products would cost twice as much, which would be good for us, but bad for the average Joe buying them. We would simply produce worse products that cost more, because we could. I welcome them on the field of battle for the hearts and dollars of Americans.

Cindy Martin said...

Get rid of Obama and the job market will improve. Obama totally sucks.

Cindy Martin said...

I have a son that just graduated with a history and broad field social science major. He has worked at Best Buy while going to school. He is the number one salesman in the region for his area of sales. His people/communication skills combined with a solid foundation from college should serve him well. What he gained in college, made him the self confident man he is today. If I needed a salesman or manager, I would hire him. okay, so I am biased, but I speak the truth.

Kirby Olson said...

Technical colleges ARE booming: culinary, nursing, plumbing and heating, welding, electrical engineering and so on pay quite well. But those programs are increasingly difficult to get into. You need a 3.3 gpa after your first year of college to get into a nursing program in many places. To get into a teaching program, you'd better have at least a 3.0. Construction technology is less demanding. People tend to think those are easy disciplines that just anybody can do. You need brains, discipline, and a work ethic to make a go of it as a nurse or a plumber. You can't screw up, either, or you're going to be sued into oblivion. There are no easy rides.

CWJ said...

Bad CWJ says -

Think about it. What possible metric can one use to reliably decide that a gender studies (or similar) major is underemployed?

Original Mike said...

"Why are college grads so underemployed?"

Because the economy sucks? Is this a trick question?

The real question is: "Why are college grads going to vote for President Downgrade?"

wyo sis said...

A college degree used to mean that a person had the brains and determination to finish what they started. It also meant they became knowledgeable about something people wanted to pay them to know in order to do something. To the extent that these two things are no longer true a college degree is less valuable.

Dust Bunny Queen said...

I have a son that just graduated with a history and broad field social science major. He has worked at Best Buy while going to school. He is the number one salesman in the region for his area of sales. His people/communication skills combined with a solid foundation from college should serve him well.

Your son already had those people and communication skills. You can't learn that in college. You either have it or you don't.

His degrees in Social Science and History, while probably fun to obtain and can make him an interesting conversationalist, have not much to do with being a salesman or manager of people.


What he gained in college, made him the self confident man he is today. If I needed a salesman or manager, I would hire him. okay, so I am biased, but I speak the truth.

So a 4 year degree to be a salesman or manager when those skills are not dependent on a degree?

If your son is good at sales and at managing people, he would be good without a 4 year college degree. I think you just wasted a whole lot of money, and time.

If I'm hiring a salesman or manager, the LAST thing I'm interested in would be do you have a degree in History.

I'm sure he is smart and all of that, but.....really?

Alex said...

Funny that the economy doesn't suck for those driven, smart and talented people.

Chris Althouse Cohen said...

I think a big part of the problem is simply not knowing where to look or what your liberal arts degree will help you get. I think there are companies that will hire fresh college grads just because they want capable, impressionable young people, but often those young people aren't ready to be molded by a big company. But also I wanna point out, a lot of people in this statistic might be there by choice, and some of the jobs that don't "require" a college degree might still favor a candidate who has one, especially with some entry-level positions.

leslyn said...

Down with Pell grants!

JAL said...

So Santorum was right.

leslyn said...

DBQ:

How wonderful that you know Cindy Martin's son better than she does. Why, you are just an expert on his education. How fortunate for Ms. Martin to have your sage advice. You should take over her son's life. I'm sure he'd appreciate it after you just insulted his mother about the money and time she thought his education was worth. Who'd want to be around Ole Mom after that?

I'm sure Ms. Martin is sincere and all of that but--really?

Dante said...

The idea that we have too many college graduates is stupid. Until I have a fembot that can please me and raise the kids and clean the house without complaining about PMS, there is an enormous amount of work to do. That doesn't mean one can pick a college degree that doesn't have generate productive value (heck, lawyers have created the art of the defining the fractal to always ensure no one knows the actual law successfully), but that should not stop people from marching down these avenues so long as they know there is no productive value.

The problem is two fold.

A) Governments add unnecessary burden to the productive class. To be "Fair," they tax the productive class so the welfare class gets all kinds of perks, like lapbands (ask me), TVs, section 8 housing, SSDI, etc.

B) Work that cannot be outsourced is TOO EXPENSIVE. For instance, the average firefighter in San Jose makes $150K, works till 55, and retires with the equivalent of a $3M pension. Ooops, that's a government job.

Give me a fembot (or a cheap Mercedes, or a car I don't have to incessantly go the gas station, etc., and then tell me there aren't enough things to do).

bagoh20 said...

A college grad has a lot of handicaps:

1) They've been told their degree will eventually get them a good job just because they have it. They think it's the key. It's not.

2) They just spent four or more years in an insulated environment totally unlike the one they want to now get into, with different rules, expectations, and motivations.

3) They spent all their money and are in debt.

4) They know a bunch of stuff that nobody cares about in their new world, and missed out on learning much of what is important out here.

5) What they think they should be respected for is actually kind of silly off campus.

All these things make them less motivated, less qualified, less comfortable, less respected and less willing to learn, suck it up, work hard, and be patient.

Their non-college competitors just spent the last four years in intense residency and don't take anything for granted. They don't even know they have an advantage over their college educated peers, so they still try harder, and appreciate things more. Gratitude is the most empowering thing you can put in a mind. After spending all that time, effort and money in school, it takes a lot more than an entry level job to make you feel it.

Some parents have instilled an understanding in their kids that overcome these disadvantages, but they could have done that 4 years ago.

Of course, there are technical areas that require college education to even be able to talk to the job, but I'm talking about the vast number of careers where nearly everything useful is learned on the job. A quality high school education in the basics of math, science, English, money, history, civics, and work habits is all they need. Then you have an adult prepared to self-educate the rest of the way to his or her dreams.

AllieOop said...

Dante, I'm curious about the Lapband being paid for, who paid, Medicaid, Medicare?

bagoh20 said...

I'm not saying that college is a total waste - it's not. It's just a very inefficient way to learn what you need, and it never even covers a big part of what you could really use. During college, some smart kids tend to learn the other stuff anyway through part time jobs and just being aware and thoughtful, but that's free.

William said...

Follow your bliss. When I got out of the service, I pursued and eventually overtook a college degree. BA in English, with a philosophy minor. It's like having your own printing press for money. Or not. Anyway, it was a pleasant way to kill, umm, six years....In the business world, my analyses were not always astute, but they were literate and readable. Also I could be much more ironic about life's inevitable failures than the average accounting major. So I got that out of it.... I had a fair number of offbeat jobs when I was going to college. They were kind of fun, much more fun than the grown up jobs I had later in life. They say life is what happens when you're waiting for life to happen, but the more enjoyable life is the one you lead when you're avoiding life. This might be a rationalization but I enjoyed the whole process of college and a BA degree....Two roads diverged....but they all lead you back to the sand dunes facing the dark, Saragasso sea..

sleepless nights said...
This comment has been removed by the author.
bagoh20 said...

I must admit that college was the best time of my life, just not the most productive. The best times never are.

Donna B. said...
This comment has been removed by the author.
Don't Tread 2012 said...

bagoh20 and william provide some great insights. A college degree is not so much a license as some appear to believe, but really, its a monetary investment in yourself. What you do with it and ultimately get out of it is entirely up to you.

I worked my way through my degree, working part to full time, and also worked 2 internships before I graduated (for those of you that may not know, an internship is an unpaid position - I was more than happy for these as they really provided great experience).

The work experience coupled with balancing school responsibilities gave me a huge advantage over those that did not work during college.

Once I graduated, just working was easy compared to my 8am-10pm work/school life of 4.5 years.

Really, what I learned in school were the things that I really didn't need to know and paid too much to find out. Still, a worthy investment in the long run. I have achieved more success in my life than I ever imagined.

There is no substitute for work ethic - a person with a college degree and no work ethic is at a distinct disadvantage.

Roger J. said...

Jay Leno did a great spot on the need for welders. I would also suggest if you enjoy the outdoors and horses, consider becoming a farrier--People who own horses pay big bucks to keep them shod.

Rusty said...

mesquito said...
I'd trade my B.A. for a welder's certification. In a heartbeat


Steep learning curve. Take classes at your local community college. Learn stick first. Then oxy acet, if its still taught. If you can learn to weld alum. with gas you can write your own ticket. If not go to tig next.
In the last gulf war the starting pay for an accomplished welder(not certified) was $98,000 all expenses paid.
Oh. And it's dirty work. By dirty I mean oily, greasy and it stinks.
Wear old clothes-preferably cotton- and steel toed boots.
Cheers

Rusty said...

Roger J. said...
Jay Leno did a great spot on the need for welders. I would also suggest if you enjoy the outdoors and horses, consider becoming a farrier--People who own horses pay big bucks to keep them shod.


Every farrier I've ever known had back problems. If you are interested in beating on iron, apprentice to a blacksmith. There are a lot of them around. It's become sort of a chic craft right now.

Matthew Sablan said...

"Not a whole lot lower than today's 53.6%"

-- I think 10% is huge.

Robert Cook said...

"The job creators are born overseas now. They don't need American companies to move work there."

Who are these foreign jobs creators? American (sic) companies are still moving jobs overseas.

"Americans are in love with cheap stuff, that's what fuels the jobs overseas. Don't blame the companies that leave. They only have the choice between that or going out of business, because Americans will buy the cheaper foreign product most of the time. And in fact, that's a good thing. Should Americans refuse value, and let the rest of the world have it all? I say this as a business owner who's company motto is "Made in The USA" as 100% of our products are.

We compete head to head with Chinese companies and usually win, but if we didn't have them forcing us to be our best, our products would cost twice as much, which would be good for us, but bad for the average Joe buying them. We would simply produce worse products that cost more, because we could. I welcome them on the field of battle for the hearts and dollars of Americans."


Who are the Chinese companies we're competing with?

That aside, what is your prescription for solving the loss of American jobs? As long as "labor" is fungible, Americans must compete for jobs with people who will work for a fraction of what we expect. (Not just expect, but require in order to live "in the manner to which we have become accustomed.")

In short, is the only solution that Americans accept working slave hours for slave wages? Is it inevitable that the American middle class will be destroyed, and we will become just a huge third world country, with a tiny enclave of wealthy and a continent-wide peasant class?

Matthew Sablan said...

Cook: Make it cheaper to employ people here than over seas, and the jobs come back. Or do you only want elite jobs to come back, and not in the Rust Belt?

Matthew Sablan said...

You could also make it more expensive to manufacture things over seas (via tariffs, etc.), but I'm pretty sure no one thinks making people pay more is a good idea.

John said...

Good to see that there are at least a couple of others here who know what a CNC Swiss machine is. (Going to IMTS? Want to meet up? Drop me a note at john@changeover.com)

We have an employment problem in this country going back decades. If I need to hire a warm body to do unskilled physical work, they are a dime a dozen. Run an ad and get 10 applicants for every position.

Ditto if I need a warm college grad with an English, Creative writing, gender studies, communication etc major who knows damnall about nothing, I can get 10 applicants for every job.

But if I need someone who can actually do something, a Chem eng, PLC programmer, industrial mechanic, welder or the like, they are very thin on the ground. The only way I can hire one is to outbid someone else and entice them away.

They are pretty much all working.

I had this conversation with a man who rebuilds used industrial machinery last year. He employes about 250 people. He has 100% of his capacity (based on 55 hour workweeks, paying double for the overtime) promised for 6 months. Want to buy a used machine? It is going to be 7-9 months delivery.

He is trying desparately to hire mechanics at $40m/yr or so and can't get applicants. He has 10-15 master mechanics who earn $80-100m and would hire a dozen more but can't find them.

I'll bet if he wanted to hire a bunch of English majors, he would have no trouble, though.

John Henry

Matthew Sablan said...

"In short, is the only solution that Americans accept working slave hours for slave wages? Is it inevitable that the American middle class will be destroyed, and we will become just a huge third world country, with a tiny enclave of wealthy and a continent-wide peasant class?"

-- Breathe some. Barring the actual poorest of the poor, America's poor are much better off today than they were twenty years or so ago. The pie has gotten bigger, and while they may not be keeping up with people with car elevators and who can send their children vacationing in Mexico, the poor of today have many of the accoutrements that were markers of middle class life not that long ago. If we keep redefining middle class to needing to have the biggest and best, then yes. We will have no middle class any more. If, however, we stop sliding the scale upwards, encourage people to avoid debt and promote responsible money management, while creating effective safety nets and removing the current disastrously run ones the government currently mismanages, while encouraging people to give as much to charity as conservatives generally do, you'd see that we're not anywhere near as bad as off as people continue to claim.

So, breathe. Things aren't perfect, but the lights still come on and the government is shooting us in the streets. We're nowhere near a third (or even second) world country.

John said...

For those who blame the lost of manufacturing jobs on going overseas, there is some of that to be sure.

Most of the manufacturing job loss in the US has been via automation. A couple of people have mentioned CNC machines. One machinist, running a CNC machine can produce more in an hour than 10 machinists could produce in a day just 20-20 years ago.

A packaging line that might have run at 100 products/minute 20 years ago and required 10 people to operate now runs 300ppm and requires 3-4 people.

And so on.

The US still manufactures 19% of EVERYTHING made in the world. We just don't use very many people to do it.

I would also suggest that many of the people who lament the loss of the "traditional" unskilled factory job have never been in a traditional manufacturing plant. Have never worked, or even seen, most of these jobs.

John Henry

John said...

If you want to know about manufacturing, the best article I have ever read about what life is like in a modern manufacturing plant is here:

http://www.theatlantic.com/magazine/archive/2012/01/making-it-in-america/8844/

There is also a good podcast interview with the author at http://www.econtalk.org/archives/2012/02/adam_davidson_o.html

I say this having taught manufacturing sine 1982, having worked in it since 1976 and having spent time in over 500 plants in a variety of industries since 1985


John Henry

David said...

I don't agree that "too many" people go to college. The problem is that people going are not learning the one critical skill that is necessary to all jobs.

The greatest talent is ability and willingness to dig in and learn new things quickly. This requires a highly inquisitive mind and analytical ability.

If employers had confidence that the graduates of Highly Priced University had these skills, they would hire them, even if they majored in history. Problem is, majoring in history, which used to emphasize these tools, now does not.

John said...

And one last question for you all to ponder:

When I send $100 to China to buy a chinese made widget, what do you think the Chinese do with the $100?

What do you think they *can* do with it?

Other than use spend it in the US to buy something.

(Yes, they can put it in treasuries but that only delays the purchase. They still need to buy something with it eventually)

John Henry

Matthew Sablan said...

John: I assume they could also buy Chinese widgets. Or spend it in their local economies (food, babysitting, etc.) Pay it in taxes to their government. Lots of things, really.

Robert Cook said...

"Cook: Make it cheaper to employ people here than over seas, and the jobs come back."

In other words, Americans must accept a loss in income even as a trade-off to working fulltime. This is the inevitable downward pressure of fungible (and automated) labor: we must either accept permanent unemployment, or employment at lower pay.

MadisonMan said...

I know plenty of other carpenters in the same situation.

Same. My best man builds for a living -- God Awful ugly big houses, but there's a demand for them in my hometown -- and his body is one big ache he tells me, especially his shoulders. And he's 52. He has a 4-y degree but he doesn't use it. I don't remember what it's in.

Matthew Sablan said...

"In other words, Americans must accept a loss in income even as a trade-off to working fulltime. This is the inevitable downward pressure of fungible (and automated) labor: we must either accept permanent unemployment, or employment at lower pay."

-- Yes. Which means that we should re-evaluate how we spend as a country and as individuals so that dollars go farther. Also, we should find ways to take less money from people. Remember, as we bring more jobs back, the service economy will also pick back up as more people have more disposable income, meaning that people with marginal to no skills will suddenly have the more traditionally available jobs open to them. Service jobs are much harder to outsource, you can't have a waiter from China serve you at IHOP.

Also, right now, we are paying inflated prices for things because people are willing to do so. If people stopped paying out the nose for houses, cars and education, the suppliers of these things would start manufacturing and acting smartly, trimming fat, and lowering costs.

We currently live in an economy that claims to want to help the poor, yet conspires to make everything more expensive with no benefits.

Freeman Hunt said...

College was ruined when it stopped being for scholars and started being a sort of catchall bus stop on the road to adulthood.

Peter said...

Anyone trying to figure out the economics of college pricing in the presence of government financial aid would do well to read this:

http://centerforcollegeaffordability.org/uploads/Introducing_Bennett_Hypothesis_2.pdf

hawkeyedjb said...

"In my small business, any job applicant carrying a degree involving two words... won't even be called for an interview."

Business Administration?

Electrical Engineering?

Juris Doctor?

Kirby Olson said...

Welders get to go to places like Antarctica. Welding is needed everywhere. But, you go blind -- quite slowly, but you still go blind.

Dust Bunny Queen said...

How wonderful that you know Cindy Martin's son better than she does. Why, you are just an expert on his education. How fortunate for Ms. Martin to have your sage advice.

@ leslyn

I'm sure you think you are being snarky and ever so smart. But. Yes. I do know her son better than she does.

I've seen her son or a close facsimile of such son.

I spent my professional life in a "sales and people position". I have had to work with her son. I've had to hire or consider hiring her son and I can tell you that a degree in History and Social Sciences would be a big black mark against him. Now.....a MBA, or something in Economics or even a CPA would be a plus. (It depends on the business, so I can only speak to mine.)

However. If his career path is in management and sales, then spending big bucks on a History and Social Sciences degree, while fun and interesting, is not an enhancement to a "sales and management" career.

His choice.

So Yes. She should take my sage advice since Me or someone like ME will be making the decision to give her kid a J. O. B.

leslyn said...
This comment has been removed by the author.
leslyn said...

Bullcrap.

Joe said...

I disagree with the premise. What is a BA in English by itself worth? Nothing, so you can't be underemployed. A BA in English has value only if the person brings something else to the the table and those skills likely far outweigh the piece of paper.

The point is that people have attached a monetary significance to a college degree that rarely exists and which is all to often based on salaries of outliers, many, if not most, of whom aren't even working in fields related to their degree!

(These outliers are also who throw off the statistics about the value of a college education. I have a BA and it was fun to get, but it has had zero contribution to my current job and salary. Yet, that doesn't stop college pimps from suggesting a causative effect.)

Bryan C said...

It's because most recent college grads are now essentially just older, poorer, more obnoxious high-school graduates. The K-12 educational system is so badly broken that colleges spend 2 years just teaching new students basic skills. Skills that no one ever got around to teaching them in the 15 years they were required to spend sitting in a classroom.

One would think that college educators would exert pressure on their K-12 counterparts to fix this deplorable situation. Sadly, educator's loyalties are primarily to each other, and not to the students or their parents.

Joe said...

College was ruined when it stopped being for scholars and started being a sort of catchall bus stop on the road to adulthood.

I agree with Freeman, though would add that becoming remedial high school didn't help.

ken in sc said...

I used to teach in a high school career center a program in industrial technology, to 11th and 12th graders. It included PLC programing, CNC machining, AutoCad drawings and blueprint reading, hydraulics and power mechanics, industrial maintenace, and an indroduction to welding. The guidance counselors kept sending me students who were too stupid to learn any of these things, and were disruptive and dangerous in the shop. After three years I bailed. I taught history instead. Retired now.

Cindy Martin said...

Dust Bunny, Do you know how many papers a history major writes? Do you know how many times I have heard employers complain about the lack of written and verbal communication skills in their applicants? What do you know? not jack...

Matthew Sablan said...

Writing history is vastly different from writing for business. Trust me; I'm a History/English major Heck, the styles are even different. Good luck using Chicago in a TPS or memo report.

History is good, it teaches you lots. But, if he had taken business, he'd be even better prepared for business. I think it is a worthy trade off, the general knowledge and diverse skill set you learn from a research intensive field, like History. But, it doesn't universally apply.

CatherineM said...

My job 20 years ago did not require a college degress. Now it does. Guess what? Those who have degrees are not as competant. Any idea why?

CatherineM said...

I was a history major and there is a lot of critical thinking/writing/research and a pretty good experience prelaw.

leslyn said...

Catherine said,

"My job 20 years ago did not require a college degress. Now it does. Guess what? Those who have degrees are not as competant. Any idea why?"

Um, you have 20 more years of experience?

"I was a history major and there is a lot of critical thinking/writing/research and a pretty good experience prelaw."

Um, you had different education and experience when you started?

Indigo Red said...

Few years ago, I wrote a six word story:

Earned PhD. Want fries with that?

I went to college, got a BA and Art teaching credential and then worked 26 years in electronics quality control. Now I'm unemployed.

A childhood playmate went to college, got a law degree, then worked in fast food restaurants. He now owns three fast food stores and lives very well.

"Want fries with that?" doesn't sound like a stupid and demeaning question anymore.

craig said...

Robert Cook said...

"In other words, Americans must accept a loss in income even as a trade-off to working fulltime. This is the inevitable downward pressure of fungible (and automated) labor: we must either accept permanent unemployment, or employment at lower pay."

Competing with Chinese slave labor on a direct wage-for-wage comparison is not going to happen, ever. The trick is to make American businesses competitive when all the other costs of doing business are factored in. Right now, American businesses spend gobs on compliance with federal rules -- EEOC, ADA, EPA, OSHA, USDA, Sarbanes-Oxley, NLRA, etc., and yes, Obamacare -- with which Chinese businesses do not have to contend. There is a systemic cost of imposing all these rules, and yet the left blithely continues to act as if they are 'free' to the economy.

If you really want to relieve downward pressure on wages, cut down on the forced business expenses due to government regulation. All those costs turn gross revenues into much lower net revenues. When you agree to work on that, I'll know you're serious.

Larry J said...

"Guys like CS majors call Liberal Arts degrees "Ya want fries with that?" degrees."

Nah, that's for high school graduates. Those with Libaral Arts degrees are qualified to ask, "Would you like a muffin with your latte?"

People--college grads or not--are underemployed because all the "job creators" are busy creating jobs overseas where people work dirt cheap compared to the wages necessary to sustain the American middle class.

This is no mystery, as much as interested parties may wish to obfuscate the reality.


Take a look at the regulations involved with creating jobs here in the US. They make the cost of labor here much higher. Drive the price of something up and people buy less of it. Supply and demand works for labor, too.

Rusty said...

John said...
Good to see that there are at least a couple of others here who know what a CNC Swiss machine is. (Going to IMTS? Want to meet up? Drop me a note at john@changeover.com)

Not going this year, but have fun.

He is trying desparately to hire mechanics at $40m/yr or so and can't get applicants. He has 10-15 master mechanics who earn $80-100m and would hire a dozen more but can't find them.


I can scrape a surface to a master gauge. And if you you know what that means You already have a job.



Kirby Olson said...
Welders get to go to places like Antarctica. Welding is needed everywhere. But, you go blind -- quite slowly, but you still go blind.


No you don't. Modern helmet technology is amazing at filtering all kinds of wave lengths of light.

Penny said...

Underemployed college grads will spend their lifetimes crying into their half empty glasses.

John said...

Matthew Sablan said:

"John: I assume they could also buy Chinese widgets. Or spend it in their local economies (food, babysitting, etc.) Pay it in taxes to their government. Lots of things, really."

Yes, of course they can. They can also use it to buy Saudi oil or British cars.

This changes nothing about what I said. Ultimately the dollars have to come back to the US and be spent buying a good or service. As I mentioned, buying bonds only postpones that, it changes nothing.

Ultimately the only place a dollar can be spent is in the US. Until it comes back, that widget that we spent $100 is a free gift.

An analogy is your personal checking account. You write me a check for $100 in exchange for a used widget plus a gadget. I endorse it to my uncle Joe. He endorses it to the grocery store and so on.

Until that check is actually cashed and the money removed from your account, you have spent nothing. You have the widget and gadget as a free gift.

Until the Chinese (or someone else) use that $100 to buy something in the US, the widget is a free gift.

You might also think about why the Chinese want dollars. They have no intrinsic value. They have value only because they can be exchanged for a good or service.

All trade is circular.

All trade balances (with some minor timing differences)

The idea that there even *can* be a trade imbalance is bullshit.

John Henry

John said...

Re trade imbalances:

Let us assume that we send $15,000 to Korea in exchange for a nice new Hyundai.

As I said, until Hyundai spends it in the US, the car is simply a gift.

We are told that this represents a trade imbalance and it does, though only momentarily.

So Hyundai, smart folks that they are, buy $15,000 worth of US made steel.

If they send it to Korea, we say trade balances and we feel happy.

If they use it to build a plant in the US, we say that there is a trade imbalance and we feel sad.

As I said, the idea of a trade imbalance, as a concept or as a fact, is just so much bullshit. Trade imbalances are about as real as unicorns.


John Henry

John said...

One correction:

I said "we" feel happy or sad.

That is misleading. It imputes those feelings to me.

I have no feeling one way or the other. I flat don't care.

John Henry

Roux said...

My son got a pretty decent construction job about 2 years ago. He's making about $60K plus bonuses.

He went to college but didn't quite finish and got the job over a college graduate. The college graduate wanted $75K and the company balked. He knows the other guy and said he still hasn't found work.

Penny said...

John said...


"I said "we" feel happy or sad.

That is misleading. It imputes those feelings to me.

I have no feeling one way or the other. I flat don't care."

Penny said...

John Henry's ennui?

Penny said...

It's OK, honey.

We'll just fluff you up around your edges.

Won't be long before your "ennui" becomes "and we" once again.

Penny said...

Unless?