Bubble Trouble

For many college graduates, finding a great job is not so easy. One could be forgiven for thinking that a degree is a one-way ticket to the promised land, your idyllic visions of a professional career being realized. But a high-paying dream job doesn’t fall into your lap once you leave school. As a recent college graduate myself, I can assure you of that.

In fact, a recent study by the Strada Institute for the Future of Work found that more than half of recent college graduates, after one year, don’t have a job that requires a degree. 10 years on, 45 percent still don’t.

Therefore, it should be no surprise that concerns have arisen regarding the "college education bubble." A central problem seems to be the stranglehold over American life that college appears to have. I remember my time as a senior in high school, being surrounded by fellow seniors crying in hallways, crouched in corners with their heads buried in their knees, and worrying themselves sick about being accepted into college. In part, this is driven by the pressures of the well-known and ever-growing earnings gap between Americans with only a high school diploma and Americans with a 4-year college degree. In 2023, recent college grads age 22-27 working full-time earned $24,000 more per year than 22-27 year olds with only a high school degree. Over a lifetime, college graduates can expect to make $1.2 million more. Without a college degree, it feels impossible not to get left behind.

Yet a much stronger, force is also the fact that college is a critical pillar of our social hierarchy, and more so now than ever. According to a study by BMC Psychology on 488 emerging adults who never attended 4-year college, 79.4% of participants agreed to one of the six statements that not attending 4-year college is stigmatized, and 71.8% endorsed experiencing at least one form of discrimination.

This two-pronged obsession with college has permeated the popular psyche and American society at large. According to a study by McKinsey, an overwhelming 79 percent of respondents said their parents wanted them to pursue a college education after high school.

Subsequently, every year, massive hordes of high school graduates eagerly flood into colleges across the US. Coming out though, many graduates find themselves disappointed. Tuition fees have risen far beyond the rate of inflation, and other costs of attendance, such as books, room and board, and meals are not cheap either. Consequently, student loan debt is reaching such high levels that it has become a salient political issue. In tandem, the incomes of college graduates are often very underwhelming. Recent graduates with college-level jobs earn $60,000 annually on average. A decade into their careers, students anticipate making more than $204,560. In reality, the average mid-career salary is $98,647, according to Glassdoor.com. Now, these salaries are fine, and there is certainly a clear “college premium” in salary outcomes, but for the investment put in, it might still seem underwhelming. And all of this assumes that a college graduate is properly employed in a college-graduate level job. The real issue lies in the around half of college graduates who are underemployed after graduation. Recent four-year college graduates that are underemployed only make about the $40,000, not even $10,000 more than those with only a high-school degree. In the long-term, this underemployment earnings gap persists. As a result, many students are questioning the true value of a traditional college education.

In a parallel America, the story is much different. According to McKinsey, US manufacturing and construction face a hiring crunch for skilled workers such as carpenters, electricians, welders, and plumbers. These are critical jobs, and employers are desperate for these kinds of skilled professionals. And the numbers seems to validate this. Trade salaries are rising quickly, some by 20% or more over the past year. Much like college, secondary vocational schools are the key to relieving the labor shortage in these important fields. At a fraction of the price, and for at most half the enrollment duration, vocational schools can propel graduates to these well-paying careers.

But growth in this labor supply is slow.

A major force affecting this is ourselves. In the same McKinsey study from earlier, only 5 percent of respondents said that their parents wanted them to pursue vocational school. This lack of legitimization and parental influence is a significant hindrance.

Another hindrance is a lack of critical funding support from US states and the Federal government. A 2023 report from Advance Career Technical Education determined that funding among all 50 states for vocational schools was less than 1% of total K-12 funding. This chronic underfunding undermines the quality and accessibility of vocational education programs, limiting the resources available for essential training equipment, experienced instructors, and modern facilities. Without adequate financial support, vocational schools will continue to struggle to attract students.

To correct for these wrongs, there should be a greater push to not just de-stigmatize vocational school, but encourage it as a critical pathway to building a strong and healthy foundation of a modern economy. In conjunction with this, there should be greater financial support for the kinds of schools that produce the skilled tradesmen we need. Through this, the “college education bubble” would also be able to cool down.

To be clear, I am not claiming that it is not valuable to get a college degree. What I am saying that it seems clear that there is a drastic imbalance between college grads and skilled tradesmen. Rectifying this imbalance would, in my view, not only improve our economy but create a healthier society.