Global Economy Bursting?

[Couch Potato]

I guess you have missed the thrust of what has happened and is happening to education versus the job market. Many college graduates have worthless degrees that do not qualify them for many jobs that require a degree.

The point of the PIMCO article is a student can no longer assume that a four year degree will be the golden ticket to a good job today or going forward in the future. The degree has to be oriented to the job skills required.

As Caterina post #963 illustrates in the graph, college education costs are rising faster than incomes produced having a college education. Looking at the NYT article on recent college graduates and their median incomes for jobs requiring a degree of $26,756, the BLS data shows a retail sales person is making $25,000 with out a degree.

The NYT article also points out, the graduating class of 2010, just 56% had held at least one job by this spring, when the survey was conducted. That compares with 90% of graduates from the classes of 2006 and 2007. An analysis by The New York Times of Labor Department data about college graduates aged 25 to 34 found that the number of these workers were employed in food service, restaurants and bars and is a waste of a college degree. It also means that with out additional education that can qualify them for higher paying jobs, their career is doomed to a much lower trajectory level of pay.

Your point is that these degreed people displaced high school drop outs and high school graduates in the job market. But I don't believe that is a favorable argument to make to say that any college degree gives that person employment preference in retail or other sectors that don't require a degree. Really, 56% employment for the 2010 college graduates is nothing to brag about.

You miss the point that this is not new, but has always been true for many degree programs that graduates don't get jobs directly related to the degree. Most people do not have a college degree, and many of them live happy, productive lives. Some people value education so highly the costs are irrelevant. The costs have risen disproportionately due to easy money availability inflating what people are willing to pay, but that simply means it is important to shop around for the best deals. My daughter is going to a public university rather than a private one due to costs, and the inflation adjusted cost will be less than what I paid for a private college thirty years ago. Some schools are indeed so overpriced as to be ridiculous choices for most, but to make broad generalizations based on average costs is just as ridiculous. Not all degrees are equal and neither are values of those degrees directly related to their costs. Like most things colleges come in many varieties and some are good values and others are not.

Having a job is always a favorable argument over being unemployed regardless of who is displaced. I bet the employment rate for pre-med students is near 0% after their bachelors degree. The economy is in the toilet in much of the country so life is tough for recent grads. Those 2010 grads entered college when those 2006 and 2007 grads were coming out. I think that speaks volumes about using current stats on graduates to make decisions about entering college.

 

[Terrel L. Shields]

He was there for his government funded research projects, and taught because he HAD to

yep...know what you are saying...

As for Law degrees...the ones in demand are for people who have a BS in science, technology, engineering and math....same demand as elsewhere.

Unfortunately we are victim to a lot of science fraud as well...not to mention good old fashioned biased "science"
http://www.foxnews.com/politics/201...-status-among-environmental-groups-to-enrich/

http://www.foxnews.com/opinion/2010/02/09/john-lott-joseph-daleo-climate-change-noaa-james-hansen/

In a January 29 report, they find that starting in 1990, the National Oceanic and Atmospheric Administration (NOAA) began systematically eliminating climate measuring stations in cooler locations around the world..... They began eliminating stations that tended to record cooler temperatures and drove up the average measured temperature. The eliminated stations had been in higher latitudes and altitudes, inland areas away from the sea, as well as more rural locations. The drop ...was dramatic, declining from more than 6,000 stations to fewer than 1,500.
D’Aleo and Watts show that the jumps in measured global temperature occur just when the number of weather stations is cut. But there is another bias that this change to more urban stations also exacerbates.

Read more: http://www.foxnews.com/opinion/2010...limate-change-noaa-james-hansen#ixzz1Q3tp3dko
​

 

[Couch Potato]

Futures Keep Falling Off A Cliff Tonight, And There's A Report Of A Brand New Hole In The Greek Austerity Plan

Read more: http://www.businessinsider.com/hole-in-greek-austerity-plan-2011-6#ixzz1Q3EI77VI

I would not call that "off a cliff" given the 20 point range of the chart and prices starting in the middle, but Greece is and will continue to be a major concern until it show evidence of improvement rather than just talk.

 

[Couch Potato]

Wait until you read this:

What's a Degree Really Worth?

http://online.wsj.com/article/SB10001424052748703822404575019082819966538.html

In recent years, the nonprofit College Board touted the difference in lifetime earnings of college grads over high-school graduates at $800,000, a widely circulated figure.

Dr. Schneider estimated the actual lifetime-earnings advantage for college graduates is a mere $279,893 in a report he wrote last year. He included tuition payments and discounted earning streams, putting them into present value. He also used actual salary data for graduates 10 years after they completed their degrees to measure incomes. Even among graduates of top-tier institutions, the earnings came in well below the million-dollar mark, he says.

The $800,000 number, it turns out, was pulled from a footnote of the College Board's 2007 "Education Pays" report that explained lifetime earnings. The report's author, Sandy Baum—an emeritus Skidmore College economics professor who didn't write the promotional text on the Web site—says that $450,000 is actually a more reasonable estimate of the difference in lifetime earnings, something she's said in interviews for more than a year.

From a purely financial standpoint one of the best tracks for a career is to drop out of high school as soon as you can and begin working toward a career as a plumber. If you work hard and spend wisely you can retire wealthy in your late fifties/early sixties. The only catch is your spend a good bit of your life dealing with other people's s**t. Fortunately for all of us some people enjoy that work. It is a solid plan for some that has the benefit of 6 years of earning over that of a college graduate, but it also has the downside of 6 extra years of working over that of a college graduate.

 

[Couch Potato]

How much is a college degree worth?

http://www.dba-oracle.com/t_how_much_college_degree_worth.htm

High school graduates can expect, on average, to earn about $1.2 million dollars in lifetime income, while those with a bachelor's degree earn an average of $2.1 million over a 40 year working lifetime. In sum, a college degree is worth a million dollars of extra cash, but it's amortized over a 40 year period, and we must account for inflation and the time value of money. At the same time, the cost of a state college for four years is about $100k.

To compare apples-to-apples, we need to convert these costs and rewards into today's dollars, figured on graduation day. Note that the million dollars in increased earning power is the same as about $400k today:

NPV college costs = $150k
NPV income gain = $400k

So, what's a Bachelors degree worth? It's about a quarter of a million dollars, not too shabby.

Lifetime income increase depends heavily on your college major, with this hierarchy (expressed in net present value dollars). It's interesting that college students fall down this hierarchy using the Peter Principle, changing majors until they find one that they master:

Note that engineers earn 4x as much as Education majors, followed closely by computer science and business administration.

That cost number for college is grossly inflated over actual costs of college. Allowing for an annual increase of 20% it is more than double what I will pay for my daughter over the next four years including room and board. But then it is not like the cost of a place to live and food to eat goes away for people who don't go to college so room and board needs to be pulled out of that expense making the number in excess of four times the actual cost. People paying that much for college are likely buying cars for sticker price plus dealer markup.

 

[Randolph Kinney]

From a purely financial standpoint one of the best tracks for a career is to drop out of high school as soon as you can and begin working toward a career as a plumber. If you work hard and spend wisely you can retire wealthy in your late fifties/early sixties. The only catch is your spend a good bit of your life dealing with other people's s**t. Fortunately for all of us some people enjoy that work. It is a solid plan for some that has the benefit of 6 years of earning over that of a college graduate, but it also has the downside of 6 extra years of working over that of a college graduate.

I know 2 people that are self employed here locally. One is in the carpet cleaning business and the other is in the pool cleaning business. Both make over $100,000 gross income and neither went to college. I know another self employed person who launched a stone & tile cleaning business in 2008. He is doing well (no college). I know 2 people that are independent brokers selling insurance and financial products and both are doing well (no college).

I know one person who works for the city of Carlsbad public parks department (no college) with great healthcare and retirement.

The best jobs to have are self employed. The next best is to work for government.

As the story goes, a laid off manager with a degree got a job as a janitor. The first day on the job his supervisor heard him complaining as he was pushing a broom: "I have a masters degree and this is what I am doing for work." The supervisor said to him: "Oh, that's right you have a college degree, let me show you how to do it."

The point here, many people do well without that college degree. It all depends on initiative and self motivation or going to work for the government. Many people are savers. Many people are spenders. Looking at the statistics, most people in the United States are spenders and don't have the financial resources to retire, having a college degree or not.

 

[Randolph Kinney]

That cost number for college is grossly inflated over actual costs of college. Allowing for an annual increase of 20% it is more than double what I will pay for my daughter over the next four years including room and board. But then it is not like the cost of a place to live and food to eat goes away for people who don't go to college so room and board needs to be pulled out of that expense making the number in excess of four times the actual cost. People paying that much for college are likely buying cars for sticker price plus dealer markup.

I went to Arizona State University way back when. Here is ASU's web site to calculate their current cost: http://students.asu.edu/costs

As you can see, $10,520 a year without books, without financial aid and without living expenses is not cheap even today. And those costs are going up.

Assuming no increases, $42,080 for a 4 year college degree in liberal arts is expensive. And that's with out books or living expenses.

If I had it to do over again, I would not go to college. I would have gotten a job with the city of Phoenix or the city of Tempe. Average compensation for more than 14,000 Phoenix employees is $98,322 a year.

Should city of Phoenix employees receive pay raises during tough economic times?

http://www.abc15.com/dpp/news/local...eceive-pay-raises-during-tough-economic-times

 

[Restrain]

One local gentleman started a landscaping business with a truck and a lawnmore. He is a MILLIONARE today with a whole fleet of trucks. No degree, just hard work.

 

[Restrain]

Job Claims rise more than expected

http://www.reuters.com/article/2011/06/23/us-usa-economy-idUSTRE75K3E820110623

 

[Couch Potato]

I went to Arizona State University way back when. Here is ASU's web site to calculate their current cost: http://students.asu.edu/costs


As you can see, $10,520 a year without books, without financial aid and without living expenses is not cheap even today. And those costs are going up.

Assuming no increases, $42,080 for a 4 year college degree in liberal arts is expensive. And that's with out books or living expenses.

If I had it to do over again, I would not go to college. I would have gotten a job with the city of Phoenix or the city of Tempe. Average compensation for more than 14,000 Phoenix employees is $98,322 a year.

Should city of Phoenix employees receive pay raises during tough economic times?

http://www.abc15.com/dpp/news/local...eceive-pay-raises-during-tough-economic-times

It is certainly not inexpensive to attend college, and people who borrow 100% of the needed funds to attend a high cost institution are some of the most foolish people on the planet. There ways to get a degree that are much less expensive than others. Half at a community college and half at a public university while working full-time is certainly possible and the route I recommended for my nephew. At the end of seven years he had his degree and seven years experience working for the Wheaton, IL library.

I am very thankful for my liberal arts degree. The experience of college alone was worth the money in my case, it was a transformational five years. To this point it has enabled me to have four different careers that I greatly enjoyed, and I am planning the fifth right now. I would be misserable working at a single place all my life just for financial reasons. I can think of little that would be as repulsive.