Considerations

Stories like this warm my cynical heart, but I fear that Urban Prep Charter Academy is based on a faulty premise:

Chicago's Urban Prep Charter Academy has a mission -- for its students to graduate and succeed in college. Now, for the first graduating class at the high school, it's mission accomplished.

All 107 seniors were accepted to a four-year college, a significant accomplishment considering they are from one of the toughest neighborhoods on the South Side of Chicago...

Just four years ago, when King started the school, only 4 percent of the class was reading at grade level.

So how did they overcome the odds? King created a school that excused nothing -- and expected everything.

It's nice to see students succeeding despite all odds. But I wonder whether their future degrees (assuming they graduate) will provide them with adequate employment in this economy, especially if they need to take out loans for those degrees.

The fact that the measure of success at the Urban Prep Charter Academy is the number of students who were accepted into a four-year college is important to note itself. My generation -- and likely the one before and after mine -- were told one thing throughout our adult lives: You need to go to college to become successful!

But as the Atlantic Monthly noted recently in an article on the long-term effects of recession, a university degree (or several) is no longer a guarantee of success -- or even stability:

In this recession, the term funemployment has gained some currency among single 20-somethings, prompting a small raft of youth-culture stories in the Los Angeles Times and San Francisco Weekly, on Gawker, and in other venues.

Most of the people interviewed in these stories seem merely to be trying to stay positive and make the best of a bad situation. They note that it’s a good time to reevaluate career choices; that since joblessness is now so common among their peers, it has lost much of its stigma; and that since they don’t have mortgages or kids, they have flexibility, and in this respect, they are lucky. All of this sounds sensible enough—it is intuitive to think that youth will be spared the worst of the recession’s scars.

But in fact a whole generation of young adults is likely to see its life chances permanently diminished by this recession...

Five, 10, 15 years after graduation, after untold promotions and career changes spanning booms and busts, the unlucky graduates [during past recessions] never closed the gap.

The United States has not been the victim of high-tech and housing bubbles alone -- the credit and university ones are exploding as well. The last twenty to thirty years of prosperity were largely based on economic smoke and mirrors. More credit and debt was needed to continue to fuel economic growth as the years increased, and now the house of cards is collapsing. As the credit markets continue to contract over the long term as the Great Recession continues, more and more students will realize that paying $160,000 in future debt for a degree in history at a private university is a fool's errand.

But in the past -- especially before tuition skyrocketed in the 1990s -- getting a four-year degree made sense. No matter if a person studied interpretive dance or eighteenth-century Russian literature, it was usually easy to get that sign of status and success -- sitting in middle-management cubicle-hell for forty hours a week at least with a retirement plan and health insurance included.

But not any more. As a result of globalization, U.S. companies no longer need people with pieces of paper to fill seats and shuffle paper. Indians can do that for a lot cheaper. The question is no longer, "What did you study?" It is, "What value do you offer that an Indian does not?" Suddenly, that history degree does not look so valuable. And our guidance counselors forgot to tell us that.

This reality is finally trickling down and increasing the demand for a trade-school education throughout the United States:

One fast-growing American industry has become a conspicuous beneficiary of the recession: for-profit colleges and trade schools.

At institutions that train students for careers in areas like health care, computers and food service, enrollments are soaring as people anxious about weak job prospects borrow aggressively to pay tuition that can exceed $30,000 a year.

(Although, as the New York Times article notes, some for-profit schools may be acting fishy.) As more young people will undoubtedly realize, the demand for skilled tradesmen is increasing:

The U.S. Department of Labor is predicting a labor shortage of more than 35 million workers over the next 30 years. It also predicts that between 2010 and 2020, 70 million Americans will retire and in 2018, 63 percent of our workforce will require some college or additional skilled training...

An apprenticeship program is often called the "Other Four-Year Degree" because of the length and rigor and knowledge needed to be an electrician or tool maker. Apprentice programs include 8,000 to 10,000 on-the-job training hours and are complemented by 576 to 1,100 classroom hours. The hardest part for many is that in addition to the on-the-job training, an apprentice will work 40 hours a week or more and attend class at least six to eight hours per week for four to five years. To earn while you learn and to become an apprentice, one has to be committed, motivated, have the mechanical aptitude and have a strong work ethic.

Detroit's public high schools, are also offering job-training placements at Wal-Mart.

The labor paradigm has changed. The people at the top -- the leaders, the innovators, the start-up founders, and the CEOs will continue to do well. Blue-collar tradesman at the bottom will also succeed because their jobs are needed, and they cannot be outsourced. The giant part in the center -- those college-educated people who thought they would have safe, middle-class, paper-pushing jobs -- are suffering the most because their positions are less important and able to be sent offshore. As I wrote in an essay on globalization, the United States has filed to reorient its entire society, infrastructure, and educational system to keep the country competitive.

Rather than merely encourage all students to attend college out of idealistic (and classist) motivations, parents and guidance counselors should keep the future labor market in mind. After not everyone should go to college -- not everyone has an interest or ability to read Plato's "Republic," just as not everyone has the interest or ability put together a car from all the parts.

Imagine that there is a city. In the city, there is a demand for two doctors, two waiters, and two plumbers. If the six teenagers in the city all go to medical school, the city will end up with two doctors -- and two waiters and two plumbers with M.D.s. The four non-doctors will have fallen for an unrealistic lie -- and be burdened with student-loan debts that they will likely never pay off.

So, what is the solution? Here are some practical steps:

• Teachers, parents, and guidance counselors: Stop insisting that everyone go to college. Evaluate a teenager's interests and ability's honestly and in light of the future labor market.
• Human-resources staffers: Stop rewarding applicants for having an overpriced piece of paper stating that the person knows a lot about something that is irrelevant to the job. If someone is better qualified but only graduated from high school, hire him instead.
• Universities: Stop telling prospective students that a college degree always pays for itself many times over. It's a lie, especially when you raise prices each year by more than the rate of inflation. Stop lying that you must tuition and fees to match expenses when you're sitting on entitlements of millions or billions of dollars that are just sitting there.
• College seniors: Universities, student-loan entities, and credit-card companies only see you as a dollar sign. If you're unsure what you want to do, take a year off after high school. Volunteer. Travel. Do a tour in the military. Work, and save money. Think before you make such an important -- and expensive -- decision.
• Everyone: Stop believing that people who have college degrees and white-collar jobs are inherently better than those who work blue-collar jobs. It's a classist lie.

To meet the challenges ahead, the United States is going to need to think a lot differently.

Related: The Upcoming Generational War and Why My Generation is So Pissed Off.

Tags: car finance, financial help, certified financial planner, financial advice, business financial software, legal finance, finance degree, financial planning software, financial consolidation, auto credit finance

Now Available: E-Book download: "Let­ters from Israel: An Amer­i­can journalist’s adven­tures in the Holy Land."

Every little bit helps! Any donations to help us keep writing are much appreciated:

Related posts:

1. Going to College: College Facts, College Fees, and College Costs
2. High School and Diminishing Returns
3. College Debt
4. Start School Later
5. Competition in College