Our Crazy-Making, Profiteering Education-Career Maze

Authored by Charles Hugh Smith via OfTwoMinds blog,

The answer is not another $1 trillion in student loan debt to pay for another raft of declining-value credentials.

So let"s say we want to set up a system to help students choose a career that fits their aptitudes and interests. What would we do? How about:

1. Give them zero (or superficial) aptitude and career-related tests.

2. Provide a few minutes with a counselor who knows nothing about them, their aptitudes or potential career-related interests.

3. Design the high school education system to provide near-zero knowledge of finance, debt, economics, how the economy functions and what the world of work demands of workers.

4. Denigrate (subtly or directly) non-college career options, channeling those who aren"t sure into 4-year colleges, higher education paid with student loans designed to maximize profiteering.

5. Force them to choose a major or field of study at 17 or 18 years of age, despite their lack of real-world experience and objective knowledge of how the economy functions and their own aptitudes/character traits.

6. Disconnect this higher education from real-world work places so they exit higher education with little actual knowledge of the skills employers need.

7. When the student graduates after borrowing a fortune and discovers their diploma has low value in the marketplace or is in a field they"ve found they loathe, then suggest the "solution" is to borrow another fortune and invest more years in obtaining another credential.

This is the American education-career maze--ineffective, self-defeating, wasteful, irrational, and apparently designed to maximize student confusion, poor choices and profiteering by higher education and the student-loan racketeers.

As if this wasn"t bad enough, what do we decide to teach our students if careers might be significantly different in 10 or 20 years? Yes, math, the basics of science and communication skills will remain useful as a foundation, but these basics aren"t enough to prepare students for a fast-changing emerging economy/4th Industrial Revolution.

Clearly, it would be enormously beneficial to teach the skills needed to learn on one"s own and adapt successfully to changing circumstances. The current system is a hierarchy of credentialing that enriches those dispensing and funding the credentialing.

Our system"s response to those left behind, those with inadequate skills and those who chose unwisely is always: get another credential, at enormous expense. Nobody tells students that credentials are in over-supply and are therefore losing their value.

Value and profits flow to what"s scarce and in demand. Trying to reach the top of the credential pyramid is a crowded race, and the losers are left with debt and wasted years they could have spent actually learning useful knowledge bases and skills--in effect, pursuing a self-directed path of accrediting yourself.

The education-career maze doesn"t have to be so self-defeating, costly, convoluted or ineffective. My book The Nearly Free University and the Emerging Economy lays out a model of higher education based on workplace apprenticeships in all fields, from carpentry to chemistry to sociology, from Day One, a structure that dramatically lowers costs while providing an education based on real-world acquisition and use of knowledge and skills in the workplace, not sitting in a chair watching a lecture.

Technology is a core part of improving results while lowering costs by 90%. Consider this article: Imagine how great universities could be without all those human teachers.

I describe the process of accrediting yourself in my book Get a Job, Build a Real Career and Defy a Bewildering Economy, which also details the eight essential skills needed to navigate the emerging economy.

What"s the emerging economy/4th Industrial Revolution? It"s not so much the replacement of human labor by robots as the augmentation of human skills with technology, and the focus on a simple but profound source of value creation: what"s scarce and in high demand? What"s abundant and not in demand?

The point of my book is to lay out a pathway of learning how to learn on our own and acquiring the soft skills needed to collaborate, communicate and manage teams/projects effectively, regardless of the field of endeavor.

How can we expect young students with little life experience to choose wisely when they don"t even understand how the economy works? The current education-career maze assumes that some basic math and science knowledge is all students need to figure out their role in a fast-changing economy that they don"t even understand.

The inadequacy of our crazy-making education-career maze boggles the mind. We need to do much, much better, not just for our students but for our society. The answer is not another $1 trillion in student loan debt to pay for another raft of declining-value credentials. We need a new system, and fast. Solutions abound, but not within the current crazy-making education-career maze.

Here"s a snapshot of the workforce"s education level:

Even the most credentialed workers" earnings have stagnated:

And here"s your wunnerful federal government, enforcing debt-serfdom on college students to maximize the profits of the student-loan racket:

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Why Is The Cost Of Living So Unaffordable?

Via Charles Hugh-Smith of OfTwoMinds blog,

Strip away the centralized power that protects and funds cartels, and prices would plummet.

The mainstream narrative is "the problem is low wages." Actually, the problem is the soaring cost of living. If essentials such as healthcare, housing, higher education and government services were as cheap as they once were, a wage of $10 or $12 an hour would be more than enough to maintain a decent everyday life.

Here are some examples from the real world. In 1952, it cost $30 to have a baby in an excellent hospital. If we adjust that by official inflation as measured by the Bureau of Labor Statistic"s inflation calculator to 2017, the cost would be $275. ($1 in 1952 = $9.16 in 2017).

What does it cost to have a baby delivered in a hospital today? $5,000? $10,000? Who even knows, given the convoluted billing process in today"s sickcare system?

The pharmaceutical cartel jacks up medication costs per dose from $3 tp $600, even when the medication has been around for decades: the Pinworm prescription jumps from $3 to up to $600 a pill Parents, doctors angry over drug price gouging (via John F.)

My father paid 1.8% of his wages for "hospital group insurance" in the early 1950s (for a household of four kids and two adults.) For someone earning $1,000 a week, the equivalent today would be $72 a month out of a monthly gross income of $4,000.

My spouse and I pay $1330 a month for barebones healthcare insurance in today"s sickcare system. Factor out subsidies paid by the employer or state, and minimal healthcare insurance costs tens of thousands of dollars per household annually.

Here"s a chart that illustrates the breathtaking rise in healthcare costs. Wages are the nearly flat line:

In the early to mid-1970s, my university tuition was $89.25 per semester (the University of Hawaii was a two-semester system), and student fees were $27 a semester, for a grand total of $232.50 per year. Books added another $170 per year, for a total cost of $400 to $450 for a university education.

$1 in 1975 = $5.51 today, so if tuition, fees and books had gone up along with official inflation, it would now cost $1,800 to $2,000 to attend a large state university annually--including tuition, fees and books.

An entire 4-year university education would cost $8,000. Instead, students now borrow $50,000 and up just to attend state university.

I"ve covered the skyrocketing cost basis of everyday life for a decade:

Lowering the Cost Structure of the U.S. Economy (August 29, 2008)

My recent exploration of soaring costs for everyday items, The Burrito Index: Consumer Prices Have Soared 160% Since 2001 (August 1, 2016), received quite a bit of interest, along with the companion piece on the source of much of the higher costs: Inflation Hidden in Plain Sight (August 2, 2016) Can we be honest and say that many of the reductions in value, quantity and quality are actually instances of fraud?

No Wrongdoing Here, Just 6,300 Corporate Fines and Settlements (May 2015)

Here"s a snapshot of urban rents. Recall that wages for the bottom 90% have been flatlined for decades.

Apologists claim these services have improved greatly in the past 30, 40 and 50 years, but this is only occasionally valid; university education, housing, burritos and conventional preventative care have often declined in quality and quantity, not gotten better.

Other apologists claim that Baumol"s Cost Disease explains all these tremendous increases in price; while this may be a factor in some price increases, it is more an excuse than an explanation.

Here"s what"s going on: cartels that have government backing can jack up prices at will, year after year, decade after decade, while wages have stagnated. Cartels have zero pressure to raise wages, while their immense profits fund vast propaganda/public-relations machines that translate into equally vast political influence.

Have you ever seen a non-profit foundation or a politico that didn"t support "more funding for healthcare and higher education"? Of course not. The healthcare, defense industry, Federal Reserve/banking sector and higher education cartels are all entrenched and self-serving.

The cartels have unlimited power to raise their prices, while the average wage-earner has essentially zero power to create non-cartel alternatives or influence central-state/central bank support of rapacious, parasitic cartels.

The "consumer" is supposed to have power, but that power only exists in an environment that enables level playing fields and transparent competition. Cartels buy political influence so the central state protects their pricing power and funds their rentier skims.

Strip away the centralized power that protects and funds cartels, and prices would plummet. I explain how this would work in higher education in my book The Nearly Free University and the Emerging Economy: The Revolution in Higher Education. The same dynamics would radically transform the cost structure of housing, healthcare, defense and everything else currently controlled by monopolies or cartels.