Weak Pay Growth Puzzles Fed Chief, Just Like Everyone Else

[Big ole Boy]

OK, I read that it will allow about 7 million persons into borrowing market. Perhaps this new score is not a new scam, but is a part of a new demographic. ( will research it some more).

Inflation calcs however, have changed quite a bit over the decades.

New FICO score 9 has a few tweaks from FICO score 8. Looking at it ... the new score is expanding its definition to allow more borrowers. 1) treat third party collections once paid as not a bad strike against the person, 2) Document timely rent payments, 3) treats medical debts less negatively ...

 

[Randolph Kinney]

Defeated by their student debt, some borrowers are packing their bags and fleeing from the U.S. to other countries, where the cost of living is often lower and debt collectors wield less power over them. Although there is no national data on how many people have left the United States because of student debt, borrowers tell their stories of doing so in Facebook groups and Reddit channels. How-to advice is offered on personal finance websites.

"It may be an issue we see an uptick in if the trends keep up," said Barmak Nassirian, director of federal relations at the American Association of State Colleges and Universities.

Outstanding student debt in the U.S. has tripled over the last decade and is projected to swell to $2 trillion by 2022. Average debt at graduation is currently around $30,000, up from an inflation-adjusted $16,000 in the early 1990s. Meanwhile, salaries for new bachelor degree recipients, also accounting for inflation, have remained almost flat over the last few decades.

Half of student loan borrowers haven't paid even $1 toward their debt's principal five years into repayment, according to the U.S. Department of Education. Forty percent of student loan borrowers are expected to default by 2023, according to the Brookings Institution.

Albright's credit score tanked as a result of his repayment troubles, making it difficult for him to buy a car and to land certain jobs, since some employers now pull credit reports. "I feel that college ruined my life," Albright said.

Seeing no future for himself in the United States, he decided to move to China in 2011. In the city of Zhongshan, he discovered he loved teaching students English. Unlike when he was delivering greasy boxes of pizza, he found his work meaningful and fulfilling.

https://www.cnbc.com/2018/10/26/he-...ape-his-student-debt--and-hes-not-alone-.html

More data that supports the notion that a college degree won't pay for itself or the debt created by it. Changing the FICO system won't fix student debt.

 

[Big ole Boy]

Pay growth numbers (what a hoot). As if they were reliably meaningful ... and a big ole fat lie ... I been watchin how this works fer 40+ years or so .... the fat keeps stretching .....

I can't see how folks believe all the mumbo jumbo anymore .... (the people became mumbo jumbo awhile back I speck)

 

[Randolph Kinney]

Is a college degree worth it? Fewer college grads are participating in the workforce


A surprising trends has emerged when comparing the labor force participation rate of those with a college degree or higher versus high school dropouts. As the chart below shows, over the past 2 decades, the participation rate of college graduates has been steadily declining.

At the same time, the LFPR of high school dropouts - those with less than a high school education - has been rising ever since the mid 1990s, and is now just shy of all time highs hit during the peak of the financial crisis.

Whatever the reason, the difference in the labor force participation between college grads and high school dropouts has never been lower.

Extending and extrapolating this trend suggests that some time over the next two decades, the labor force participation rate of high school dropouts in the US labor pool may be the same, if not higher, than that of college grads.

And while one can debate what is causing this troubling compression, the implications for future US productivity should the US labor force become increasing saturated with minimally skilled workers at the expense of qualified college grads, is rather dire.

 

[Randolph Kinney]

You can say that the pension plans are also represented in the bottom 90%.

The cartel structure of the U.S. economy has raised costs while providing no additional value. One example is higher education, a cartel that issues diplomas with diminishing economic value that now cost a fortune, a reality reflected in student loan debt, which simply didn't exist a generation ago:

 

[Meandering]

At least this go round
we don't have windjammer cruise on your credit card
commercials.

.

 

[Gobears81]

You can say that the pension plans are also represented in the bottom 90%.

The cartel structure of the U.S. economy has raised costs while providing no additional value. One example is higher education, a cartel that issues diplomas with diminishing economic value that now cost a fortune, a reality reflected in student loan debt, which simply didn't exist a generation ago:

Very interesting. Charts can lie but it does look apparent that SOMETHING is going on at that time. Could you elaborate more on what you think has caused this?

 

[Randolph Kinney]

Very interesting. Charts can lie but it does look apparent that SOMETHING is going on at that time. Could you elaborate more on what you think has caused this?

As debt increases, and income decreases, and interest rates decreases, savers are punished and borrowers are rewarded. That includes federal, state and local governments.

There has been a shift in the economy to globalism. Jobs are taken away and given to the lowest cost providers. The propaganda touted was more education will give people better jobs. Government got into the business of financing student loans fore everyone, similar to financing homes for everyone leading up to the crash. The cost of education skyrocketed and jobs requiring a college degree fell. Students will never recover the cost of education financed by debt.

The great recession of 2008-09 created huge debts. New spending was created by the governments, financed by debt. People out of the workforce increased tremendously and still has not been reduced substantially. The federal reserve crated quantitive easing and zero interest rates. This took money from savers and transferred it to people who had wealth and could borrow to invest or play the markets. And the stock market has exploded since.

Wealth inequality has exploded too as shown in the chart. Debt has exploded as shown in the chart. All forms of debt were bundled into bond like instruments including rents from Wall Street buying houses, credit card debt, auto loan debt, home loan debt, corporate debt, etc.

 

[Gobears81]

As debt increases, and income decreases, and interest rates decreases, savers are punished and borrowers are rewarded. That includes federal, state and local governments.

There has been a shift in the economy to globalism. Jobs are taken away and given to the lowest cost providers. The propaganda touted was more education will give people better jobs. Government got into the business of financing student loans fore everyone, similar to financing homes for everyone leading up to the crash. The cost of education skyrocketed and jobs requiring a college degree fell. Students will never recover the cost of education financed by debt.

The great recession of 2008-09 created huge debts. New spending was created by the governments, financed by debt. People out of the workforce increased tremendously and still has not been reduced substantially. The federal reserve crated quantitive easing and zero interest rates. This took money from savers and transferred it to people who had wealth and could borrow to invest or play the markets. And the stock market has exploded since.

Wealth inequality has exploded too as shown in the chart. Debt has exploded as shown in the chart. All forms of debt were bundled into bond like instruments including rents from Wall Street buying houses, credit card debt, auto loan debt, home loan debt, corporate debt, etc.

Very interesting take- thanks!

 

[Randolph Kinney]

Many students are rethinking college, some grads even regret their degree

Today, college tuition is the highest it has ever been. Considering the tuition of colleges from the late 1980s to the 2017/2018 school year, it is clear to see that the cost of a typical undergraduate degree increased by 213% at public schools and by 129% at private schools. This figure was reached after it was adjusted for inflation. And as 45 million Americans are currently drowning in student loan debt of over $1.5 trillion.

Regrets over a degree
For more American graduates who took out a loan to pay for the rising cost of books and tuition to get that degree, it was not worth it to many students who face high interest rates and high monthly payments, especially for those who cannot get a high-paying job out of school in their field.

This was according to a study done by Varo Money which found out that over a third of recent college graduates said that the degree they received was not worth the sum of which they were now indebted. The survey also discovered that those still in college showed more optimism about the value of their degree as opposed to their graduate colleges suggesting that the disillusionment may have set in after graduation.

And according to Ira Rheingold, the executive director and general counsel of the National Association of Consumer Advocates, this is very disheartening news.

Finally, as the cost of college continues to rise and the value of degrees decline in today’s world, is it a matter of time before the majority of students choose to completely circumvent the system completely? When determining whether to go to college or not, it’s important to educate yourself as to whether or not the cost of college is worth it. If you are confident that your education will pay off, then going to school may be worthwhile.

https://www.marketwatch.com/story/m...ome-grads-even-regret-their-degree-2018-11-14

Basically there is a disconnect between a college degree and a good paying job that pays enough to pay off the student debt and provides enough left over to cover the basics of living. This is warping politics where a socialistic government is appealing, a government that pays for a college education and healthcare, or free to all.