olivermsun said:I don't think that would be wise for most elementary ed majors, but that is very different question from whether the government or should be "eager to fund" elementary ed majors or not based on their earnings potential.
jack action said:Just to set back this thread to the original - and very interesting - subject, let me add my 2¢.
People nowadays have this very weird vision that (higher) education must be linked to a job. It shouldn't be. It's about developing skills, increasing your knowledge and shaping your critical thinking. Yes, those should help you find a job, but that should not be the goal. Sadly, it has become the sole objective with this era of mandatory education for everyone. An investment that must pay back in short term.
Also education in itself is a business that employs people who give a service. Thus, on an economic viewpoint, there is no waste. If people stop «buying» education, they will only buy something else. So I don't see a bubble bursting. Anyway, nothing society wouldn't recover economically speaking.
How come if I take guitar, dance or italian lessons, nobody accuses me of wasting my time and money because I don't have the intention of make a living out of it? (Although it doesn't mean it won't help me in my work either.) How come if someone spends more time and money studying whatever, it is suddenly considered a waste of resources? How much knowledge and education is too much knowledge and education?
Although I must agree that if someone puts himself in huge debt for it or the government finances blindly everyone, that becomes a problem.
That kind of thinking - studying in hope of a better pay instead of the pleasure of learning something new - defies the purpose of getting an education in the first place. It becomes only a race to get a diploma to fill an empty space on a CV. You must appreciate what you learn, otherwise you will never see what you can do with it. That is why we have so many professionals today that don't deserve their title; Worrying more about how much they make rather than producing a quality good or service.
I remember the countless people, when I was at university, that were telling me that I didn't need to know something because a computer or a «less skilled» worker would do it for me; Or when I was told that I could blindly copy someone else's work to pass a course. But I want to learn this stuff! I like it! Why would I try to not learn it? I guess I was odd that way. I remember than in engineering, we had to take some courses from a list of subjects out of the engineering curriculum. There was a chemistry course that was in the list by mistake, a class meant for people in the «non-science» studies, which was some entry level stuff for engineering students. Most engineering students took that course because it was an easy pass, maybe even an easy «A» to boost up their GPA. I refused to take that course because, from my point of view, I wasn't learning anything and I would've wasted my time and money taking it. I better wanted to learn something new that was more interesting (I finally chose an American history class).
What would resolve this situation? People will have to set their values to something else than always making more money. People will have to learn to share their knowledge with one another rather than selling it to the highest bidder, sometimes at an inflated value. Do parents charge their kids for teaching them to speak or potty-trained? That would be silly. So why sharing higher knowledge becomes a business?
jack action said:A contract stipulating that the person must work for a certain amount of time at a certain salary should be part of the deal.
Vanadium 50 said:Why?
If I am a lender, I primarily care if I am paid back. I'm not interested in social engineering. Unless STEM majors have lower default rates, I should want to lend to everyone.
Dr. Courtney said:One big problem is that the government (and lenders) are just as eager to fund students with low GPAs seeking low value degrees with low earnings potential as they are to fund students with high GPAs seeking high value degrees with high earnings potential.
The funding mechanisms need to communicate more accurately to students that the value of their degree matters depending on the school, the GPA, and the major area of study. Money for college should be much harder to get for degrees with low earnings potential.
At the risk of the stating the obvious: some investments are seen as (potentially) returning much more than their short term financial returns, and hence a government might like to invest where a for-profit institution might not. Anyone who depends on, or has depended on government support of basic research ought to realize this.Dr. Courtney said:No, it's the same question. A bank should not lend $200,000 for a home only worth $100,000. Why should the government be eager to fund ANY degree worth much less than the loan amount?
This makes sense conceptually, but the details are a bit more hairy. Harvard-trained elementary ed teachers might not make vastly more than than teachers from state schools — does that mean that the government should be much more reluctant to give out loans to Harvard ed majors? Will Harvard students lose their loan eligibility as soon as they declare their major to be elementary ed instead of business administration or finance?I'm not saying don't lend money to the elementary ed majors, just that the amounts should be more commensurate with the value of the degree and the likely ability of the graduates to repay the loans in a timely manner based on their earnings.
Have you checked what even state schools are charging these days? They don't charge less for ed majors.$30-$40k is a much more reasonable total loan amount for an elementary ed degree than $100k. But as it stands now, students can just as easily exceed $100k for an elementary ed or art history major as they can for electrical or chemical engineering.
The whole thing is unwise, but it isn't clear that further incentivizing people to choose EE over elementary ed is any less unwise.And a 2.0 GPA keeps the loans coming semester after semester. That's unwise.
FallenApple said:It is not too unreasonable to assume that people that have marketable degrees are less likely to default
Vanadium 50 said:Show me the data. Without that, you're arguing that we should subsidize some majors over others based on assumptions.
To sum up, within the Lending Club data analyzed, the hypotheses are partially accepted: the higher the interest rate, the higher the default probability is. Loan characteristics, such as loan purpose; borrower characteristics, such as annual income and current housing situation; credit history and borrower indebtedness do matter. However, variables such as loan amount or the length of employment do not seem to be relevant within the data analyzed.
olivermsun said:At the risk of the stating the obvious: some investments are seen as (potentially) returning much more than their short term financial returns, and hence a government might like to invest where a for-profit institution might not. Anyone who depends on, or has depended on government support of basic research ought to realize this.
The same source also finds that 30% of doctors and 34% of Ph.D.s among respondents also felt underemployed. I didn't find the breakdown of, e.g., how many STEM Ph.D.s by major have full time scientist positions in their fields, but it would be interesting.Dr. Courtney said:Over half of education majors are underemployed. See: http://www3.forbes.com/leadership/17-college-majors-that-report-higher-underemployment/
Why invest in more education majors when it is reasonably anticipated more than half of them won't be full time teachers?
Health care and criminal justice majors were also high on the list. The former might be anticipated to be increasingly in-demand. On the other hand, the latter were under demand in the recent past. Should the government try to forecast and control "production" of educated citizens as if they are an industrial product? Even if it could work, is that really what anyone wants?It makes more sense to match production with anticipated demand. Subsidizing production well in excess of demand is stupid.
olivermsun said:Should the government try to forecast and control "production" of educated citizens as if they are an industrial product? Even if it could work, is that really what anyone wants?
As I pointed out earlier, the government already funds lots of things, e.g., in science R&D, that might not otherwise be funded by a free market. So if you agree that the government should pull out of these activities as well, then okay let's also talk about why higher education as a whole should operate as a "free market" (which it probably wouldn't do anyway, for a whole host of reasons). Otherwise, invoking the free market is a bit of a cop out.Dr. Courtney said:The government should let the free market be the free market.
Sure, but that raises the question of: What fraction of students are actually "paying for it themselves"?Students should be able to major in anything they want if they are paying for it themselves.
You yourself talked earlier about changing government higher ed lending to better match production to demand, so it seems a little dishonest for you to make it sound as if I'm reframing the question in some way. I am simply questioning whether the kind of government "intervention" you're describing can even work and whether it's really what we want as a society.The question at hand is not government control, and it is dishonest to frame it that way.
A union is one of the parts of a system of checks and balances. The idea is that no one group gains too much power over other groups.Vanadium 50 said:I expect the minimum wage part of this thread to be split off, as there are at least three different threads going on.
A union is a labor cartel. It can increase wages (price) by reducing supply. As such, you can reduce unemployment or you can increase wages, but you can't do both simultaneously.
WWGD said:A union is one of the parts of a system of checks and balances. The idea is that no one group gains too much power over other groups.
Why not? If wages go up ( at the right level of income) , consumption goes up and so does employment with it. I mean, the two (wage increase and employment level) are not intrinsically contradictory to each other.Vanadium 50 said:Nevertheless it can't simultaneously increase wages and employment.
Yes, higher wages will increase demand. There is plenty of pent-up demand at the lower-income levels , though not too much so at the higher ones ( since the latter already have most needs taken care of). People at lower levels must buy food, school supplies, must pay for car repairs, etc. When they don't have money, they cannot obviously pay for it, so the demand for a lot of these goods is pent up. Once they have the money, demand is " released" . A worker without money may have to wear shoes with holes in them until he makes enough to buy a new pair. EDIT: As this demand is "released", supply may go up, to satisfy increased demand, creating a multiplier. Obviously there are other factors involved, but this is part of it.Vanadium 50 said:Supply and demand.
They won't "have the money" if they get fired.WWGD said:Once they have the money...
You can spin it any way you want, but the net effect of your proposal is the government picking winners and losers. Intent doesn't matter.Dr. Courtney said:The government should let the free market be the free market. Students should be able to major in anything they want if they are paying for it themselves.
The question at hand is not government control, and it is dishonest to frame it that way. The question is what the government should subsidize through guaranteed loans and how much the government should be willing to lend based on the anticipated value of the degree. Lending over $100,000 for any and every degree with no more requirement than a 2.0 GPA is foolish, and it has resulted in many many students who cannot repay their loans or who are strapped for the first decade or two of their adult lives due to these large debts.
$30-40k makes a lot more sense as an upper debt limit for most students seeking degrees with track records of average earnings below $50k for the first decade after graduation. This is not an attempt of government to control production, it is just smart lending.
Using shoes as a way to decide is not a bad thing to do; just think about a bit...Evo said:I'm sorry but you cannot get a degree and think that means you're going to get a job. If you think that, you're a fool. Sorry, but it's true, there are so many factors involved in getting hired, personality is a large factor. I hate to say it but appearance is also a factor, I know that's unfair, but it's true. I don't mean so much physical attractiveness, although that can be part of it, but how you dress, I watched an interview of people in hiring positions and one woman said she based her hiring decisions on people's shoes. There are so many candidates for positions, employers can be that stupid and picky. Sad but true. If all else is equal, she liked your shoes more, so you got the job.
Who/what guarantees they will get fired? This was, BTW, the intent behind GWB's tax breaks, to put money on people's pockets in order to allow them or make it easier to consume . Problem is it was aimed at those who already had most of their needs met. OF course, you don't do the raise abruptly, nor by an amount that is too large. By the same token, if people don't have money, they will not consume and the economy will remain down.russ_watters said:They won't "have the money" if they get fired.
The answer @Vanadium 50 gave you: supply and demand.WWGD said:Who/what guarantees they will get fired?
I addressed that in a previous post. Having more disposable income will increase demand and the market will increase supply to meet demand.russ_watters said:The answer @Vanadium 50 gave you: supply and demand.
No, you didn't. You are assuming people won't get fired and will therefore have more disposable income and ignoring what supply and demand tells you must happen: some people must get fired or businesses will fail.WWGD said:I addressed that in a previous post. Having more disposable income will increase demand and the market will increase supply to meet demand.
Actually you seem to be assuming these businesses have zero margin and cannot handle a wage increase. It may be true in some cases, but not all, not for all amounts. There are additional savings by having a lower turnover when a worker has some basic stability s/he cannot have when s/he can barely afford food/transportation, etc. So it is not necessarily a zero sum. You may also have more loyal workers which results in increased productivity. Yes, supply and demand is one aspect to consider for sure, but not the only one.russ_watters said:No, you didn't. You are assuming people won't get fired and will therefore have more disposable income and ignoring what supply and demand tells you must happen: some people must get fired or businesses will fail.
Yes, I have been a union member, but not of a very powerful union. And the problem is not necessarily with unions per se. They are part of a system of checks and balances. If the system is out of whack it is not necessarily the union's fault. And I believe many of the stories you refer to are accounted by one side, and not the union side. Unions have no interest in biting the hand that feeds them. Why would they willingly bankrupt the company that pays their salary? Yes, there are greedy idiots conducting union negotioations, but, then again, there are greedy idiots in every walk of life.Vanadium 50 said:WWGD, at best you are making a macroeconomic argument, at worst you are denying a fundamental tenet of microeconomics.
If the former, this is an argument not for individual union membership or even individual unions, but an argument for massive unionization of the economy. As such, it doesn't really fit the topic, but in any event Russ is right. Union membership has fallen, and one reason for that is that there have been unions that have driven their companies into bankruptcy.
Just out of curiosity, have you ever been a member of a labor union? I have, and one thing I find interesting is that they tend to be viewed a lot better from the outside than the inside.
One of the things the unions do, is force a raise in wage rate; sometimes large increase in wage rate. Do you think this might affect employee hours and number of employees who will be hired? The answer is "yes".WWGD said:Yes, I have been a union member, but not of a very powerful union. And the problem is not necessarily with unions per se. They are part of a system of checks and balances. If the system is out of whack it is not necessarily the union's fault. And I believe many of the stories you refer to are accounted by one side, and not the union side. Unions have no interest in biting the hand that feeds them. Why would they willingly bankrupt the company that pays their salary? Yes, there are greedy idiots conducting union negotioations, but, then again, there are greedy idiots in every walk of life.
_The_ unions? Or _some_ unions? I just have trouble accepting that people would, by default, act in self-destructive ways. Why would union members knowingly kill off the source of their paychecks?symbolipoint said:One of the things the unions do, is force a raise in wage rate; sometimes large increase in wage rate. Do you think this might affect employee hours and number of employees who will be hired? The answer is "yes".
No...WWGD said:Actually you seem to be assuming these businesses have zero margin and cannot handle a wage increase.
Correct! So you do agree that some businesses run thin margins, so some people must lose their jobs! So please: adjust your answers to include those job losses. The way you presented it before makes it look like you are choosing to ignore an uncomfortable downside of what you would like to see happen. But that downside doesn't go away just by ignoring it.It may be true in some cases, but not all...
It may be true that if you make the cause small enough the effect will be hard to detect, but the effect is there. It has to be. Otherwise, you could create a perpetual motion machine with such policies (that is a common fallacy behind the PMMs we see presented on PF)....not for all amounts.
Up to this point, it has appeared to me that you have been denying that supply and demand was an "aspect" at all.Yes, supply and demand is one aspect to consider for sure, but not the only one.
Right. I should have said, "some unions".WWGD said:_The_ unions? Or _some_ unions? I just have trouble accepting that people would, by default, act in self-destructive ways. Why would union members knowingly kill off the source of their paychecks?