When you think about the socio-economic challenges facing young adults today, what comes to mind?
Maybe the availability of housing, high rents, and the prohibitive costs of purchasing a home. Rising interest rates, which make it harder to secure a loan to start a business. Declining rates of marriage and the delayed fiscal independence that so often accompanies that condition. The absolute epidemic of crippling student-loan debt that’s often assumed in pursuit of dubious degrees.
Sure, all that stuff matters, but not nearly as much as the ticking social time bomb the Associated Press flagged on Thursday: High-school graduates are skipping out on college. The horror!
Hundreds of thousands of young adults came of age during the pandemic. But instead of college, many turned to hourly jobs or careers that don’t require a degree. Others were deterred by high tuition.
Economists say the impact could be dire. https://t.co/Lbw8X6Xjgd
— The Associated Press (@AP) March 9, 2023
“Dire,” they say. “At worst,” the report continues, “it could signal a new generation with little faith in the value of a college degree.”
That’s the “worst” outcome here, is it? Indeed, the AP continues: “For those who forgo college, it usually means lower lifetime earnings.” When the business cycle returns, “Those without degrees are more likely to lose jobs.” If this trend is allowed to metastasize further, Georgetown researcher Zack Mabel warns that it represents “a dangerous proposition for the strength of our national economy.”
Imagine a day when a marginally higher percentage of Americans entered the specialized workforce earlier in life and weep for the future of America.
It is true in the strictest sense that, after the 2007 recession and the prolonged downturn that followed, Americans with associates, bachelors, and masters degrees returned to the workforce faster than those with only a high-school diploma or no diploma at all. But do you know what group fared worst in that regard? Those with only “some college,” which suggests lifestyle choices contribute significantly to individual outcomes. And six-in-ten matriculated students never complete their degree requirements.
The high-school student who stumbles into a vocation is unlikely to earn more over their lifetime than a college degree-holder. But the college student who stumbles into a bachelor’s program and cannot, for whatever reason, complete that course is arguably in worse shape.
“When you take into account the significant number of students who start but don’t complete, there is a 78% chance that attending college will ‘pay off’ if there are no costs,” the think tank Third Way observed. “But it is basically a coin flip if your annual costs are $50,000.” And not all degrees are alike. Students who major in STEM, business, and finance courses are highly likely to “earn out” their degrees. Arts and humanities majors, however, can look forward to “roughly 50/50 odds that the net present value of their college investment will be positive.”
The Associated Press didn’t profile directionless young adults who drift into vocational careers because they’re otherwise unmotivated. The AP shined a spotlight on young people who are making sober and informed decisions about their future, and they’re happy with their choices.
Grayson Hart wanted to study musical theater at Penn State (annual out-of-state tuition and fees: $38,651), but he thought better of it after he started earning a paycheck at a local smoothie shop. Nineteen-year-old Daniel Moody was recruited to run a plumbing plant out of high school and seems thrilled not to be “dead broke” while finding himself on a college campus. Boone Williams was an “A” student but gravitated toward a union apprenticeship. He now earns a modest living while taking night classes, but he’s happy. “In the long run, I’m going to be way more set than any of them,” he told the AP.
Some young people are “taking restaurant and retail jobs that pay more than ever,” the AP reported. “Some are being recruited by manufacturing companies that have aggressively raised wages to fill shortages.” None seem especially miserable, though the professorate thinks they should be. Maybe these young people will enjoy marginally lower lifetime earnings than advanced degree holders, but that’s a big maybe. They are also likely to have more purchasing power earlier in life than their matriculated peers. That doesn’t sound so bad.