The Grand Illusion
The other day I ran across a reference that showed the percentage of national wealth in the U.S. held by “generations” when their median age reached 40. When the baby boomers reached forty, they held 21% of the national wealth; gen-X had 9% at age 40; while millennials, who just reached 40, hold only 5%. For a number of reasons, which I won’t go into here, that’s not surprising.
The next statement, however, did catch my eye, because the writer asked why the most-educated generation was the least wealthy and prosperous. Needless to say, my first reaction was to think “millennials” aren’t the most educated generation; they’re only the most ‘degreed’ generation.
As I’ve noted, on and off for years, overall, education has been dumbed down over the last fifty years, largely because of the push to get more high school and college graduates. On the one hand, there’s no doubt that the brightest, most educated millennials are generally as bright and as educated as the brightest in any previous generation, but to get there, they’ve had to pile up graduate degrees, and, as a result, have also piled up enormous debt, which is obviously one of the reasons they have a smaller share of the national wealth.
As for those other millennial college graduates, the ones who aren’t at the very top, I personally believe they’ve been even more cheated than those millennials skilled and fortunate enough to come out on top. The remaining millennials, in all too many instances, labor under the illusion that they’re well-educated, even when they cannot write a coherent paragraph, analyze a problem, complete a task without detailed instruction and continual supervision, or understand that every single profession requires a great deal of grunt work, perhaps high-level grunt work, but grunt-work all the same. Too many of them have been so “spoon fed” mere bits of knowledge and are so afraid of making as mistake that they have very little, if any, initiative.
It’s not that they’re without intelligence or ability. It’s that they’ve never been taught how to fully use those abilities, nor have they been taught young that failure isn’t fatal and that there are always consequences. It’s that the education system, society, and, frankly, often their parents, have failed them, and it’s been an incredibly expensive failure, both for them and society. While almost no one in power will admit this failure, at the same time the costs to these “lost millennials,” and to society, are still piling up and will for years to come.
For lack of any better ideas, I think a good place to start would be lowering the restrictions on discharging student loans in bankruptcy, which is harder to achieve than other types of debt. This is an oversimplification, but here goes:
Eligibility for and the amounts of student loans are increased because, in practice, they are virtually impossible to get out of. It seems like an easy sell for financiers because the debtor will be under their obligation to pay forever, and simply rack up fees and interest over their lifetimes, consistently generating returns as part of a broad portfolio of loans, even if individual debtors are from time to time not be able to pay anything.
In an unsurprising market response, the cost of college has expanded to match the amount of debt that each student can take on.
The cost of policing of what is a good or bad deal is set on the shoulders of 18-year-olds who have been underserved by our education system, particularly as to financial literacy. The schools have no obligation to provide educations that are useful in the modern workforce, and the financiers have little reason to assess whether giving a loan to finance a particular school will ensure they get their money back.
This is a toxic, self-reinforcing cycle that is creating a sort of neo-feudalism or indentured servitude. But, if the loans become easier to discharge, then market forces will take action. It’s not a great solution, particularly in that it would remove a major avenue for poor or disadvantaged students from getting college educations, but there are probably other ways that could be achieved, and why not try them, because this current method is not working very well.
I guess, since local school boards set the rules for local schools, and local property taxes pay for them, and states jealously guard their prerogatives in this, it would be very hard to get a national level of support for preschool and primary school support programs and nationally set and tested goals that kids need to reach before going on to high school.
Intervention at preschool and early primary school age is the most effective way to improve reading skills, which are the prerequisite for most of the rest of the school skills. This isn’t just up to schools, it also includes things like free public library cards for kids, and organised library visits for schoolclasses to get books; and programs of community ‘reading mothers’ who visit deprived families to read (picture) books with young kids when their parents rarely or barely read and there are few books in the house; and extra support for the schools that have to deal with bringing more deprived kids up to the national level.
Then high schools need to get a similar support and testing system set up, so schools in poorer areas aren’t handicapped from the start in what they can invest in their students, and all students get a curriculum that teaches them more to question, understand and synthesize information rather than repeat rote memorized items.
Without getting that foundation in order, any interventions in the educational programs at the college and university level will make little difference in how well educated the younger generations will be, and how flexibly they will be able to adapt to changes in the work market.
Getting rid of most student debts would make a difference in the extra poverty of the younger generations. Not necessarily make higher education free, but keep the maximum debt to an amount that can be paid off in 5 years at an entry salary level. (The way your US minimum pay levels are set up, that may still be very low!)
Making them vulnerable to bankruptcy would be good for that, too.
Then they will get a chance to start saving up and get a loan to buy a home, start a family and participate fully in the economy and begin to build up wealth.
Biden’s ‘American Jobs Plan’ (1) would provide universal preschool for 3-4 year olds and two years of free community college.
1 https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/28/fact-sheet-the-american-families-plan/
There is extremely little the government (whether state or national) can do to solve this. If parents do not value the benefits of education then their children won’t. States have often set high standards only to realize that they must lower them or suffer the wrath of parents who are upset about their children not graduating. As a teacher for over 20 years my standards have had to lower slowly year by year to meet the needs of students less and less prepared by the time they get to my class. Instead of focusing on my subject matter I often spend time teaching them how to write a coherent sentence. After seeing the reasoning capability of many of my students I agree that our society is going to pay a very steep and unpleasant price.