Tag Archives: Employment

Commentary

Is a college degree worth the money you pay for it?

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Do college degrees really get you a better job?

It depends on what you study. If you study really hard stuff that is in demand, then it will help. But if you study easy stuff and don’t come out in the top 1% of those easy programs, then going to college is a huge waste of money. It’s also a huge “opportunity cost”, because you could have been working instead of going to college – which would get you not only a salary but a lot of experience, too. Instead of having $50,000 in debt, you could have $50,000 in savings, over four years.

Take a look at this article from the Chronicle of Higher Education. (H/T Hans Bader at the Competitive Enterprise Institute)

Excerpt:

“60 percent of the increase in the number of college graduates from 1992 to 2008 worked in jobs that the (Bureau of Labor Statistics) considers relatively low skilled — occupations where many participants have only high school diplomas and often even less.” This means that the great push to increase the number of college grads has apparently come to very little — only a minority of the additional grads are in occupations regarded as requiring a bachelor’s degree.  Of the nearly 50 million U.S. colleges graduates, 17.4 million are holding jobs for which college training is regarded as unnecessary. The number of waiters and waitresses with college degrees more than doubled from in the years 1992-2008, from 119,000 to 338,000, and cashiers with college degrees rose from 132,000 to 365,000.

We should not be taking money from working individuals and businesses to provide grants for immature students to study basket weaving. Providing money for so many people to study things that are not practical and that they are not even that good at is a waste of money. We are not getting a good return for this money if graduates just go on to do jobs that they would have done anyway. The real questions that should be asked by students is “is this worth the money? Will this help me to find a job?” And the real question that taxpayers should be asking is “do we need to stop wasting money on grants for useless degrees and leave the money in the private sector to create more good jobs instead?”.

It’s not good to be sending young people to universities that are run by leftists in any case, because it insulates them from real life and puts them at the mercy of perpetual adolescents (professors). For many students, college is wasted on partying and “studying” impractical and counter-factual areas like feminist studies, peace studies, black studies, Marxist studies, queer studies, etc. We do not need to be sending so much money into the pockets of unqualified leftists like Bill Ayers and Bernadine Dohrn, who bash capitalism while living off of the wealth produced by it.

Hans writes:

In “The Great College Degree Scam,” expert Richard Vedder points out that “[s]ome in higher education KNOW about all of this and are keeping quiet about it because of their own self-interest. We are deceiving our young population to mindlessly pursue college degrees” they don’t need.

Hans also talked about the problem of rising college debt here.

News

Japan to cut corporate tax rate to spur job growth

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Story from Yahoo News. (H/T ECM)

Excerpt:

Japan’s government announced it would cut the country’s hefty corporate tax rate by 5 percentage points, in a bid to stimulate the economy and help Japanese businesses stay competitive.

The step announced late Monday is aimed at promoting investment, employment and salary increases at home so that Japan can exit deflation, Prime Minister Naoto Kan said.

“I decided to take a bold step,” he told reporters.

Kan acknowledged more Japanese companies were moving abroad where corporate taxes are lower, causing job losses in Japan, Kyodo News agency reported. “That is not a plus for the Japanese economy,” he said, according to Kyodo.

The Japanese corporate tax rate was the highest in the world, at 40%. According to the Wall Street Journal, the US corporate tax rate is just under 40%, so now we will be the highest corporate tax rate in the world. Our neighbor to the north should reap the rewards as they have been lowering their corporate tax rate for years, and it’s going even lower in the future.

Commentary

Do unemployment benefits encourage people to avoid working?

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This is from the radically-leftist New York Times. (H/T ECM)

Excerpt:

Before this recession, most economists probably thought that some amount of unemployment benefits were just and compassionate, and offered a sense of security even to people who were lucky enough to retain their jobs, despite the fact that the program would raise unemployment rates and reduce both employment and economic output.

In other words, unemployment benefits shrink the economy to some degree, but shrinking the economy a bit may be a price worth paying.

Unemployment benefits were thought to reduce employment and output because, by definition, working people were ineligible for the benefits. In particular, an unemployed person who finds and starts a new job, or returns to working at his previous job, is supposed to give up his unemployment benefits. Economists had found that a large fraction of unemployed people delay going back to work solely because the unemployment insurance program was paying them for not working.

Fewer people working means a lower employment rate, and less output because unemployed people are not yet contributing to production.

The recession has seen a number of economists ignore prior findings on unemployment insurance, at least as long as this recession continues. For example, in evaluating the stimulus law economists at the nonpartisan Congressional Budget Office assumed that the law would raise gross domestic product, and took no account of the fact that the unemployment insurance and other provisions of the stimulus law give people incentives to work less.

Here’s a new study explaining how the “generosity” of the radical left actually encourages people to avoid working, and to remain dependent on the government for their income.

A study published by two labor economists, Stepan Jurajda and Frederick J. Tannery, looked at employment histories for unemployment insurance recipients in Pittsburgh in the early 1980s. Unemployment rates got quite high in Pittsburgh in those days, reaching 16 percent at one point, and staying over 10 percent for two and a half years.

The chart below summarizes their findings for Pittsburgh.

The chart displays the fraction of persons (in Pittsburgh) receiving unemployment benefits who began working again, as a function of the number of weeks until their unemployment benefits were scheduled to be exhausted. For example, a “hazard” value of “0.04″ for week “-14″ means that, among unemployed persons with 14 weeks remaining until their benefit exhaustion date, 4 percent of them either began working a new job or returned to their previous job.

The chart:

Unemployment offers a disincentive to find work
Unemployment offers a disincentive to find work

That chart basically shows the breaking down of the American working spirit by the radical left – making large segments of the American population dependent on government. This isn’t good for the producers, and it isn’t good for unemployed people to be out of work by choice. (Although to be sure, many many unemployed people are not unemployed by choice).