Latest Federal Data Confirm: College NOT Road to Prosperity

College educated people do have higher incomes and lower unemployment rates, on average, than those who have not been to college. However, the goal of achieving prosperity by obtaining a college education is becoming less attainable and secure than ever before, primarily because of staggering levels of student debt and a stagnant labor market offering mostly low wage jobs in the service sector, but also because of growing competition for limited space on college campuses.

“A college diploma no longer guarantees a direct pathway to the middle class, making it harder to justify the expense of a degree,” National Center for Education Statistics (NCES) Commissioner Jack Buckley told Diverse Education. Student loan debt is the only type of loan debt that has increased since the recession started. In 2012, total student loan debt reached $1 trillion, surpassing credit card debt, becoming the second largest source of personal debt after home mortgage debt. Consequently, even for those lucky enough to earn a college degree and find a job, high monthly loan payments can easily force them into the ranks of the working poor.  Considering that the average undergraduate owes more than $25,000, a repayment schedule of 10 years at 6.8% comes to $288 per month, which is a lot of money for someone earning only $30-40,000 per year.

Despite his dire assessment, Buckley went on to repeat the cliché that most of the “good” jobs are going to those with college degrees. Yet, he does not define “good,” which, today, generally means “a steady salary,” regardless of the amount of that salary or the working conditions. Today people are working longer hours than they did 30-40 years ago and earning less in constant dollars, even with college degrees, so a more precise statement would be that people with college degrees are more likely to have just plain jobs, not necessarily good ones. Furthermore, even those who have college degrees are finding it harder to get hired and to hold onto their jobs. What good is a “good” job if it barely pays ones living expenses and college loan debt and leaves one with no time or energy to spend with family or leisure?

College For All: A Pathway Toward Unemployment and Lower Wages

While the growing expense of college and the ensuing debt burden are certainly good reasons to question the assumption that college is a good investment, one must now consider the job prospects that are possible with a college degree, as well, since many of the jobs that require a college degree are expected to decline over the next decade. This could result in a labor surplus in those fields and drive down wages, while forcing many graduates into other fields or the ranks of the unemployed. For example, over 250,000 bachelor’s or master’s degrees in education have been awarded yearly since 2000, though there will only be 539,100 teaching jobs available through 2020, and nearly ten times more advanced degrees in psychology will be awarded than there will be jobs in this field. Ph.D. scientists are already feeling the pinch of job and grantshortages, forcing them to look for other sources of income. (Statistics from National Center for Policy Analysis) And college graduates, in general, are having a tough time finding work in their fields of expertise, with 50% of all recent college graduates currently unemployed or underemployed in low wage jobs unrelated to their training like bartending or retail, the San Jose Mercury News reported last year. Roughly 1.5 million, or 53.6%, of those under the age of 25 with bachelor's degrees were jobless or underemployed last year—the highest rate in more than a decade.

One might reasonably wonder why legislators and reformers have been pushing a school reform agenda of “college for all” when college graduates routinely cannot find work in their fields of expertise and must then accept low-wage, unskilled jobs to repay their $25,000 of student debt. College may no longer be such a good investment for young people, but it is a huge boon to the banks and lending agencies that profit from the $1 trillion in student debt (a debt that cannot be erased through bankruptcy) and to the institutions and businesses that will be able to increase their profit margins as wages decline because of the increasing competition for scarce STEM jobs and other fields requiring highly educated workers.

Get Good Grades and to College or You’ll Wind Up a Ditch Digger

It used to be (and perhaps still is?) common for teachers to chastise shirking students with the threat that they’ll wind up digging ditches if they don’t start doing their homework and paying attention in class, yet the median income for a heavy equipment operator (e.g., backhoes, tractors, bulldozers and other ditch digging machinery) is $60,483, according to salary.com. The fact is there are lots of jobs that pay relatively high wages that do not require a college education and many of these industries are projected to grow considerably over the next decade, according to the Bureau of Labor Statistics (BLS). Jobs in masonry, for example, are expected to increase by 40%. Jobs in plumbing and pipefitting are expected to grow 26%. Jobs operating construction machinery are expected to increase by 23%. (Statistics from National Center for Policy Analysis)

Go To College (If You Can)

Another obvious problem with the College for All agenda is that it is impossible for everyone to go to college. Even before states started to slash contributions to their public universities there weren’t enough teachers and classrooms for every high school graduate. At the same time, large numbers of young people are either not graduating from high school, or graduating without the necessary skills to succeed in college. This problem has only been exacerbated by the recession and years of federal policies prior to the recession that favored the interests of older Americans at the expense of younger Americans. For example, the federal government now spends $480 billion on Medicare, but only $68 billion on education, according to Esquire. As a whole, the U.S. government spends 7 times as much on its seniors as it does on its children, per capita, according to a 2009 Brookings Institution study. Mike Males writes that younger workers are currently contributing 15% of their payroll income to pay for Social Security and Medicare payments for seniors, since Congress gutted the Social Security Trust Fund (originally designed to cover future generation’s benefits) to pay for current government needs.

As a result, the wealth gap between younger and older Americans is now the largest on record. In 1984 Americans who were sixty-five and over made ten times as much as those under the age of thirty-five. By 2008, older Americans were earning nearly forty-seven times as much as the younger age group. Older Americans suffered far less under the current recession, with the median net worth of those under 35 falling 37% between 2005 and 2010, while falling only 13% for those over the age of 65. This wealth gap is not small, either. The median net worth of households headed by someone 65 or older has increased 42% since 1984, to a comfortable $170,494, while the median net worth for younger households has declined 68% to a desperate $3,662, according to the Pew Research Center. (For more, see the following articles in Esquire and Newsweek).

The road to prosperity for young people today, if there is one at all, may be taking care of their parents in their old age and hoping they inherit whatever wealth they may have had.

W[h]ither the Labor Movement?

I recently came across an interesting blog piece by Stewart Acuff called The Future of the American Labor Movement. One thing I liked about his piece is that he correctly identified several important areas the labor movement has ignored over the years. However, like many on the left, he completely misunderstands the relationship between labor and capital and this leads him to the erroneous belief that the interests of workers can be saved entirely through political action, while ignoring labor’s most effective weapon, the strike.

Acuff points out that the 1935 Wagner Act, which was revised and reborn as the National Labor Relations Act (NLRA), does not cover large percentages of workers (e.g., public sector workers, agricultural workers and domestic workers). These latter two groups comprise many of the lowest wage and most abused workers in the nation. For those who are covered by NLRA, the law significantly limits their freedom to form unions, bargain collectively and strike. He argues that the labor movement needs to fight NLRA-type protections for all workers and start to vigorously organize the millions of non-unionized workers in the country, while also fighting for legislative changes that would improve workers’ living standards, including a higher minimum (living) wage and single payer health plan.

Unfortunately, Acuff misunderstands the relationship between labor and capital, claiming that the lack of “real and full freedom to form unions and bargain collectively is the core of our economic crisis.” The economic crisis is, in reality, a crisis of capital—the temporary failure to acquire as much profit as desired in the usual way. To be sure, times are tougher now for the rest of us, but the economic relations are essentially the same as they have always been. The employing class owns the means of production and thus controls the conditions of work, while the workers are dependent on the employers for a job and wages. This allows employers to pay workers less than the value of their labor and pocket the difference as profits (i.e., exploitation). When times are tough for capitalists, they slash wages and jobs and demand more from those who remain, thus ensuring continued profits over and beyond what they need to live far more lavishly than their employees.

Unions and collective bargaining merely allow workers to negotiate their working conditions and compensation with their bosses, but never to actually challenge their subservient relationship, let alone demand full autonomy, power or control over the means of production. Thus, unions and collective bargaining help perpetuate the continued profit-making by the capitalist class by insuring that workers stay on the job to be exploited (i.e., paid less than the value of their labor).

Furthermore, the right to form unions and bargain collectively, in and of itself, does little for workers if they cannot mount an effective strike. During collective bargaining, each side makes proposals, argues its case and they either come to an agreement or not. The boss can always say “no” and the workers have little recourse when this happens except to appeal to his compassion or threaten to harm him. Although there are a number of tactics that have been used by workers over the years, the strike (and its variants) is the most effective means to extract concessions from bosses, as it hurts their bottom line. The longer workers remain off the job, the longer they lose profits.

While union membership has been on the decline (partly as a result of downsizing, union busting and outsourcing), unions have also become increasingly reluctant to engage in strikes and other job actions. Acuff laments how “35 years of assaults on workers and unions have led to 35 years of stagnant wages,” yet the unions have done little to resist this. Indeed, by increasingly choosing political action over direct action, the unions have been complicit in this.

Like many on the Left, including the leaders of the unions, Acuff has misconstrued the problem as a political problem: “What does the absence of organizing and collective bargaining rights say about freedom and democracy in the United States?” In actuality it says very little about freedom and a lot about the relationship of democracy to capitalism.  We do, in fact, have the right to form unions, strike and bargain collectively, but the state has imposed numerous restrictions and limitations and it has done so legally and democratically and for the benefit of the bosses. What most on the Left fail to recognize is that despite its definition (rule by the people), democracy is not the same thing as People Power and does not serve the economic interests of the masses.

Though Acuff sounds like a critic of mainstream unionism, his critique suffers from many of the same faulty premises. While it is true that governments can take away collective bargaining rights (as they recently did in Wisconsin), organizing is something that people can and sometimes must do, regardless of rights and laws. Likewise, before we had a legal right to strike, workers still struck and risked jail, beatings, deportations and murder. Unfortunately, the major unions have accepted the rules and laws imposed on them by capital (i.e., they obediently follow the dictates of NLRA and Taft-Hartley) and even undermine wildcat initiatives by their members, thus squelching rank and file autonomy and passion. In Wisconsin, when workers started talking about a General Strike (which is illegal under the Taft Hartley Act), the major unions sent their members home from the state house occupation, arguing that the most strategy was to vote the crooks out of office.

It is true that wages have been stagnant or declining over the past 40 years and that working conditions have deteriorated (e.g., longer hours, speedups, increased workloads). It is also true that the wealth gap has grown rapidly in that period and living conditions for most of us have declined as a result. In response, the unions have done virtually nothing to fight to reverse these trends. Rather, they have almost universally negotiated contracts that merely slowed down the process. Ultimately, if unions want to increase their membership and status among workers, they will have to demonstrate that they have the power to make aggressive demands on the bosses and win them through strikes. Until then, unions will seem like a burden to many workers that simply take a cut of their already meager wages in exchange for more status quo.

Americans Working Longer, Harder and Paid Less

Huck/Konopacki Labor Cartoons

The working and living standards for the majority of Americans have been on a downward spiral since the 1970s. While workers’ productivity is up, allowing their bosses to bring in greater profits, most workers have been working longer hours and doing more work per hour, while their wages have remained stagnant, according to the recent report State of Working America, 12th Edition (Mishel et al. 2012)

Below are some of the report’s findings (summarized by the Economic Policy Institute, where Mishel is president):

In 2007, the average American worker toiled 1,868 hours, 181 hours longer (10.7% more) than in 1979—the equivalent of an extra 4.5 weeks per year. This growth was most pronounced among women, who are now working 20.3% longer than they did in 1979. However, this is primarily because there were far fewer women being paid for their labor in 1979. Overall, men saw a 4.4% increase in their working hours, and this was primarily over and above what they were already working. There was also a large increase in working hours among the lowest 20% of wage earners, whose working hours increased 22% (compared with a 7.6% increase for the top 5% of earners), again due mostly to hours over and beyond what they were already working.

One reason for the increased working hours was, of course, increased demands by employers. However, workers’ wages were stagnant during the period, in many cases not keeping up with inflation, forcing people to work longer hours to make ends meet. Thus, in terms of spending power and the value of their paychecks, workers living standards were either stagnant or declined during this period.

For example, annual income increased during this time period, but for the majority of workers this was the result of their longer working hours—not from any significant increase in hourly wages. For the lowest-wage workers, hourly wages rose only 7.7% over the past three decades. However, for the past decade, their wages have actually declined 3.2%. In contrast, the hourly wages of the top 5% of wage earners increased by 30.2%, and this does not even include the bulk of their income, which comes from non-wage compensation and investments (e.g., stock options, capital gains).

What little growth American workers have seen in hourly wages was concentrated in the late 1990s, when unemployment was low and the minimum wage was increased. Even for middle wage earners, whose overall hourly wages increased 15.8% between 1979 and 2007, total hourly wage growth was only 5.3% when 1995-2000 is excluded.

The Deplorable State of Adjunct Faculty Compensation

It is not just K-12 public school teachers who are getting squeezed by budget cuts, stagnant pay, declining working conditions and attacks on tenure. Today, nearly 70% of all college and university faculty are non-tenured, part-time adjunct faculty (according to a recent piece in Truth Out), with no job security and generally lower pay and fewer benefits than their tenured colleagues.

Many of these professors find themselves having to accept teaching positions at multiple universities and colleges just to make enough to support themselves, sometimes having to commute to two or three different campuses in one day. It is not uncommon in the community colleges for adjuncts to earn as little as $2,500 per class. For adjuncts teaching 3-4 classes per semester, this translates to $15,000-20,000 per year, often without any benefits.

Some adjuncts make good money. At UCSF, for example, adjunct professors can earn six-figure salaries. However, their job security is based entirely on their ability to compete for scarce research grants, as the university provides them with little or no additional funding and makes no commitment to support them if their grants run dry.  These adjuncts, who must constantly contend with the threat of losing their labs and their income, often put in 60-80 hour weeks just to keep their grants flowing and, consequently, suffer an incredible amount of pressure and stress.

A number of factors have been contributing to the problem, including the nation’s economic crisis, which has exacerbated many states’ existing budget difficulties. In order to close their deficits, universities have not only been cutting classes and raising tuition for their students; they have also been squeezing their employees by cutting wages, benefits and teaching assignments. At the same time, the number of college graduates competing for these jobs has been rising. This may be part of the reason why the number of people possessing PhDs who receive public assistance has tripled over the last three years. Between 2007 and 2010 the number grew from 9,776 to 33,655.

However, the decline in tenured faculty positions started well before the current economic crisis. The New York Times reported in November, 2007, that tenured faculty had already become the minority on campuses across the country. 30 years ago, adjuncts made up only 43% of faculty nation-wide, whereas by 2007 they comprised 70% of faculty. The Times attributed the trend to administrators’ desire to save money and have greater “flexibility.” What this really means is greater ease in manipulating, coercing and firing, since part-timers and adjuncts, in general, have little or no job security and must toe the line and keep their mouths shut if they want to keep their jobs.

It also means more money is available for executive compensation, which has been on the rise even as tuition has climbed and employee compensation has declined. The San Francisco Chronicle reported this week that executive pay at the nation’s private colleges climbed 2.8% between 2009 and 2010 (the last year in which records are available). The median compensation for the nearly 500 presidents of private universities with budgets of at least $50 million was nearly $400,000, with 36 executives earning more than $1 million annually. However, executive compensation at public universities has also been rising rapidly. California Senator Leland Yee recently introduced legislation that would bar the state’s UC and CSU systems from giving any raises or bonuses until two years after the latest fee hikes.

As with many aspects of the education system, the interests of teachers are linked to the wellbeing of students. Several studies have found that freshmen taught by part-timers are more likely to drop out. This is probably due to the fact that part-timers and adjuncts, in general, have more work to do and less time to do it, forcing many to reduce or abandon office hours. They are more likely to accept excessive or unreasonable course loads in order to increase their salaries or to be eligible for benefits. They also are less likely to advocate for better conditions for themselves and their students out of fear of getting fewer (or no) classes in the coming semesters.