THERE'S nothing like a bunch of unemployed recent college graduates to bring out the central planner in parent-aged pundits.
By Virginia Postrel
In a recent column for Real Clear Markets, Bill Frezza of the Competitive Enterprise Institute lauded the Chinese government's policy of cutting financing for any educational programme for which 60 per cent of graduates can't find work within two years.
His assumption is that, because of government education subsidies, the United States is full of liberal-arts programmes that couldn't meet that test.
'Too many aspiring young museum curators can't find jobs?' he writes. 'The pragmatic Chinese solution is to cut public subsidies used to train museum curators. The free market solution is that only the rich would be indulgent enough to buy their kids an education that left them economically dependent on Mommy and Daddy after graduation.'
But, alas, the US has no such correction mechanism, so 'unemployable college graduates pile up as fast as unsold electric cars'.
Bill Gross, the founder of the world's largest bond fund, Pacific Investment Management Co, has put forth a less free market (and less coherently argued) version of the same viewpoint. 'Philosophy, sociology and liberal arts agendas will no longer suffice,' he declared. 'Skill-based education is a must, as is science and maths.'
There are many problems with this simplistic prescription, but the most basic is that it ignores what American college students actually study.
Take Frezza's punching bag, the effete would-be museum curator. It would be only a slight exaggeration to say that no such student exists.
According to the National Centre for Education Statistics, humanities majors account for about 12 per cent of recent graduates, and art history majors are so rare they're lost in the noise. They account for less than 0.2 per cent of working adults with college degrees, a number that is probably about right for recent graduates, too. Yet somehow art history has become the go-to example for people bemoaning the state of higher education.
A long-time acquaintance perfectly captured the dominant Internet memes in an e-mail he sent me after my last column, which was on rising tuitions. 'Many people that go to college lack the smarts and/or the tenacity to benefit in any real sense,' he wrote. 'Many of these people would be much better off becoming plumbers - including financially. (No shame in that, who're you gonna call when your pipes freeze in the middle of the night? An M.A. in Italian art?)'
While government subsidies may indeed distort the choice to go to college in the first place, it's simply not the case that students are blissfully ignoring the job market in choosing majors. Contrary to what critics imagine, most Americans in fact go to college for what they believe to be 'skill-based education'.
A quarter of them study business, by far the most popular field, and 16 per cent major in one of the so-called Stem (science, technology, engineering and maths) fields. Throw in economics, and you have nearly half of all graduates studying the only subjects such contemptuous pundits recognise as respectable.
The rest, however, aren't sitting around discussing Aristotle and Foucault.
Most are studying things that sound like job preparation, including all sorts of subjects related to health and education. Even the degree with the highest rate of unemployment - architecture, whose 13.9 per cent jobless rate reflects the current construction bust - is a pre-professional major.
The students who come out of school without jobs aren't, for the most part, starry-eyed liberal arts majors but rather people who thought a degree in business, graphic design or nursing was a practical, job-oriented credential.
The higher education system does have real problems, including rising tuition fees that may not pay off in higher earnings. But those problems won't be solved by assuming that if American students would just stop studying stupid subjects like philosophy and art history and buckle down and major in petroleum engineering (the highest-paid major), the economy would flourish and everyone would have lucrative careers.
That message not only ignores what students actually study. It also disregards the diversity and dynamism of the economy, in good times as well as bad.
Those who tout Stem fields as a cure-all confuse correlation with causality. It's true that people who major in those subjects generally make more than, say, psychology majors. But they're also people who have the aptitudes, attitudes, values and interests that draw them to those fields (which themselves vary greatly in content and current job prospects). The psychology and social work majors currently enjoying relatively low rates of unemployment - 7.7 per cent and 6.6 per cent respectively - probably wouldn't be very good at computer science, which offers higher salaries but, at least at the moment, slightly lower chances of a job.
(These and many of the other figures in this article come from two studies by the Georgetown University Centre on Education and the Workplace analysing data from the Census Bureau's 2009 American Community Survey: 'Hard Times: College Majors, Unemployment and Earnings' released this week, and 'What's It Worth: The Economic Value of College Majors' released last May.)
Whether they're pushing plumbing or programming, the would-be vocational planners rarely consider whether any additional warm body with the right credentials would really enhance national productivity. Nor do they think much about what would happen to wages in a given field if the supply of workers increased dramatically. If everyone suddenly flooded into 'practical' fields, we'd be overwhelmed with mediocre accountants and incompetent engineers, making lower and lower salaries as they swamped the demand for these services. Something like that seems to have already happened with lawyers.
Not everyone is the same. One virtue of a developed economy is that it provides niches for people with many different personalities and talents, making it more likely that any given individual can find a job that offers satisfaction.
As any good economist will remind you, income is just a means to utility, not a goal in itself. Some jobs pay well not only because few people have the right qualifications but also because few people want to do them in the first place. In a culture where many people hate oil companies, petroleum engineers probably enjoy such a premium. Plumbers - the touchstone example for critics who think too many people go to college - certainly do.
The critics miss the enormous diversity of both sides of the labour market. They tend to be grim materialists, who equate economic value with functional practicality. In reality, however, a tremendous amount of economic value arises from pleasure and meaning - the stuff of art, literature, psychology and anthropology. These qualities, built into goods and services, increasingly provide the work for all those computer programmers. And there are many categories of jobs, from public relations to interaction design to retailing, where insights and skills from these supposedly frivolous fields can be quite valuable. The critics seem to have never heard of marketing or video games, Starbucks or Nike, or that company in Cupertino, California, the rest of us are always going on about. Technical skills are valuable in part because of the 'soft' professions that complement them.
I was lucky to graduate from high school in the late 1970s, when the best research said that going to college was an economically losing proposition. You would be better off just getting a job out of high school - or so it appeared at the time. Such studies are always backward-looking.
I thus entered college to pursue learning for its own sake. As an English major determined not to be a lawyer, I also made sure I graduated with not one but two practical trades -neither learnt in the college classroom. At the depths of the previous worst recession since the Great Depression, I had no problem getting a job as a rookie journalist and, as an emergency backup, I knew I could always fall back on my excellent typing skills. Three decades later, nobody needs typists, and journalists are almost as obsolete.
The skills that still matter are the habits of mind I honed in the classroom: how to analyse texts carefully, how to craft and evaluate arguments, and how to apply microeconomic reasoning, along with basic literacy in accounting and statistics. My biggest regret isn't that I didn't learn Fortran, but that I didn't study Dante.
The most valuable skill anyone can learn in college is how to learn efficiently - how to figure out what you don't know and build on what you do know to adapt to new situations and new problems. Liberal arts advocates like this argument, but it applies to any field. In the three decades since we graduated, my college friend David Bernstein has gone from computing the speed at which signals travel through silicon chips to being an entrepreneur whose work includes specifying, designing and developing a consumer-oriented smartphone app.
When he was an undergraduate, he wrote in an e-mail, his professors 'stressed that they weren't there to teach us a soon-to-be obsolete skill or two about a specific language or operating system ... but rather the foundations of the field, for example: characteristics of languages and operating systems, how one deals with complex projects and works with others, what is actually computable, the analysis of algorithms, and the mathematical and theoretical foundations of the field, to pick just a few among many. That education has held me in good stead and I've often pitied the folks who try to compete during a lifetime of constant technological change without it.'
Whether you learn how to learn is more a question of how fundamental and rigorous your education is than of what specific subject you study.
The argument that public policy should herd students into Stem fields is as wrong-headed as the notion that industrial policy should drive investment into manufacturing or 'green' industries. It's just the old technocratic central planning impulse in a new guise. It misses the complexity and diversity of occupations in a modern economy, forgets the dispersed knowledge of aptitudes, preferences and job requirements that makes labour markets work, and ignores the profound uncertainty about what skills will be valuable not just next year but decades in the future.
Pundits are entitled to their hypotheses, of course, and if they're footing the bill they can experiment on their children. But they shouldn't try to use the rest of the population as lab mice.
The writer is a Bloomberg View columnist and the author of The Future And Its Enemies and The Substance Of Style.