Senators Bernie Sanders and Elizabeth Warren recently proposed the College for All Act, which promises to make public universities free for most students. A similar bill just became law in New York, and support is building for tuition-free public universities in other states as well.
Unfortunately, the senators’ proposal would hurt the very Millennials it aims to help, by reducing economic growth.
Median wages have stagnated for decades precisely because of the mismatch between the skills workers have and those businesses need. So while wages in some sectors — for example, the IT industry — continue to rise, young people without marketable skills are being left in the lurch.
This includes many college graduates. While defenders of college-for-all proposals point out that a college degree improves a graduate’s lifetime earnings in the aggregate, not all majors are created equal. According to a new paper by Jaison Abel and Richard Deitz of the Federal Reserve Bank of New York, over half of graduates in many liberal-arts majors work a job they don’t need their degree for. The problem isn’t just that too many students seek a degree in an obscure subject, either; it’s that too many graduates lack the ability to think critically or write clearly. In a recent survey, only 39 percent of managers said that students were ready for the work force.
In short, colleges are producing some workers who can contribute skills the economy needs and some who are completely unprepared for the work force.
Making college free is unlikely to fix this state of affairs. For one thing, the looming specter of debt incentivizes students to pick more economically viable majors: When facing future student-loan payments, we’re more likely to major in, say, chemical engineering than in sociology. For another, when students pay their tuition, they understand that they’re going into debt in return for an opportunity, and are thus more likely to study hard and make the most of that opportunity.
Making college free, by contrast, will ensure that students graduate with fewer skills and are less prepared for the workforce. And by driving up the number of students who enroll, it will also increase the number of graduates with a specific skill set, driving down wages and increasing underemployment as more graduates chase fewer jobs in which they can use their expertise.
It should go without saying that this mismatch will only deepen our economic stagnation. When businesses can’t find the talent they need, they can’t develop new products or expand their operations. Fewer web developers means fewer apps and software programs. Meanwhile, there may be plenty of over-educated baristas, but their economic contribution is fairly small.
This stagnation hurts Millennials twice: once as job-seekers, and once as consumers who cannot benefit from innovations that aren’t created.
Attending college isn’t a bad decision when compared with doing nothing, but the opportunity cost is substantial. Millennials could be spending those years learning more marketable skills with the help of alternative educational institutions.
Coding bootcamps, which help students learn web development and programming in a few months, boost graduates’ earnings at their first post-graduation job by an average of $26,021 — more than the difference between a high-school graduate’s earnings and the earnings of many college graduates. Praxis, an entrepreneurial-apprenticeship program, delivers graduates an average salary of $50,000. Other options, such as the technology-education service Treehouse, also help customers thrive. These institutions are successful because they erase the gap between skills students have and skills businesses need. They help both their workers and the economy as a whole more than many college programs.
Unfortunately, making college free would crowd out these alternatives. When students spend four years cultivating knowledge of art history or geography, they have less time to spend at institutions that offer more tangible value.
Many commentators argue that my generation is struggling under the weight of our student loans, but the median monthly student-loan payment in 2017 is only $203. We don’t need a bailout; we need an economy that works — and free-college proposals promise to deliver the opposite.
— Julian Adorney is a Young Voices Advocate. His writing has appeared in The Freeman, Fox News’s The Nation, The Federalist, and Lawrence Reed’s anthology, Excuse Me, Professor.