The Myth About College Degrees

Does a college degree boost earnings and reduce unemployment?

That’s the question that economists have been debating for years, especially after the “Great Recession,” when hundreds of thousands lost their jobs as a result of the global economic crisis in 2008.

Research shows that the earnings gap between high school and college graduates is widening. Between 1979 and 2012, it doubled from $17,411 to $34,969.

Businesses cite this as evidence that college degrees accelerate economic growth, reduce poverty and increase wages. Critics, however, point out that a college degree will only hold this advantage as long as it is rare. If 80 percent of citizens really did earn postsecondary degrees, thereby flooding the job market, professional salaries would decrease in value. They also point out that business leaders ignore other important factors that may contribute to the current wage gap.

For example, computer technology and automation have eliminated jobs in the clerical, administrative and production fields. US companies have moved manufacturing jobs overseas, giving rise to low-wage jobs in the service and retail sectors. Also, anti-union legislation in many states has depressed wages.

In spite of irrefutable evidence, businesses blame the unemployment rate, wage stagnation and poverty on a skills deficit. They complain that they are unable to fill vacant jobs because workers lack the necessary qualifications. They are pushing for adults to obtain degrees to prepare them for jobs that require new skills in today’s high-tech, global economy, perhaps to ensure that the future will yield an employer’s market of workforce oversupply (which would drive wages down).

Oregon’s education reforms of 2011 serve as a case in point.

In 2005, the Oregon Education Roundtable (OER), a group composed of policy consultants and advocates, mainly representing private business and corporate interests, published a series of Gates Foundation-funded white papers on reforming Oregon’s public education system. One of the OER’s recommendations was dubbed the “40-40-20” goal. It read:

To prepare for evolving economic challenges, no adult should fail to complete high school. Twenty percent should have at least reached the level of a high school diploma. Another 40 percent should have completed an associate’s degree or some amount of college. Twenty percent should have gone as far as a four-year degree, and an additional 20 percent should have completed a graduate degree.

Oregon business leaders pressed then-Gov. John Kitzhaber and state lawmakers to draft OER’s recommendation into Senate Bill 253. It

set out to boost the state’s degree attainment level:

  • Ensure that at least 40 percent of adult Oregonians have earned a bachelor’s degree or higher;

  • Ensure that at least 40 percent of adult Oregonians have earned an associate’s degree or post-secondary credential as their highest level of educational attainment; and

  • Ensure that the remaining 20 percent or less of all adult Oregonians have earned a high school diploma, an extended or modified high school diploma or the equivalent of a high school diploma as their highest level of educational attainment.

Political pundits, mainstream media and corporate-funded education advocacy groups, including Stand for Children and the Chalkboard Project, hailed these numerical education goals. Governor Kitzhaber referred to these goals as the “North Star, a compass heading, a destination on which we can focus our aspirations.”

The 2012 American Community Survey of the US Census Bureau, however, paints a different picture of the state’s education attainment level. It reports that 40 percent of Oregonians have a post-secondary degree. Topping the list of college completion by state is Massachusetts with 50 percent, followed by Colorado, Minnesota and New Hampshire. Compared to other states, Oregon’s degree attainment is slightly above the national average.

The state’s 40-40-20 goals, however, require 80 percent of adult Oregonians to complete a postsecondary degree or certificate by 2025, surpassing Massachusetts and its peers. The Oregonian newspaper estimated that more than 650,000 adults — some already in retirement — must return to college to achieve Oregon’s arbitrary numerical education goals.

Given that Oregon’s disinvestment in public K-12 and higher education persists, the achievement of these goals within the next eight years unfathomable.

To compound the problem, the proponents of the original 40-40-20 schema failed to consider the truth about workforce demands in 2025. According to a recent Oregon Employment Department report:

Among occupations, the largest number of openings will be in occupations that have low educational requirements and that are low wage. This reflects, to some extent, the effect of job polarization in Oregon. Opportunities for middle-wage jobs may be shrinking, with simultaneous growth concentrated at the high and low ends of the spectrum. The fastest growing occupations will be those that require an advanced degree (17.4%) and those that require less than a high school degree (16.4%)

Undoubtedly, a $1.6 billion budget deficit next biennium will hamper the state’s efforts to reach the 40-40-20 goals by 2025.

Recognizing that the state’s overambitious numerical education goals are unattainable by 2025, lawmakers introduced two bills this legislative session to revise them.

The Higher Education Coordinating Commission (HECC) introduced HB 2311. It proposes to modify the state’s 40-40-20 goals to “relate to Oregonians completing education, rather to all adult Oregonians.”

Critics, however, say the bill doesn’t go far enough. While the bill limits the state’s 40-40-20 goals to adults who are in college, it still ignores funding needed to achieve them. Oregon’s universities requested $100 million for the next biennium to fend off tuition increases and program cuts.

HB 2587, endorsed by public school teachers and higher education faculty members, revises the original law by eliminating the numerical goals of 40-40-20 altogether. The bill “modifies state educational goals to take into consideration students’ aspirations, to provide students with well-rounded education and to provide students with sufficient instructional time to meet … [their] educational goals.”

The supporters of HB 2587 believe that the scope of the state’s public education mission must expand beyond its limited focus on degree attainment by providing students with opportunities and support mechanisms for their intellectual and emotional growth, as well as their preparedness for civic engagement.

Proponents of the bill also argue that focusing on meeting students’ diverse needs, and not just the imagined demands of future employers, sets a better mission for comprehensively educating students than the workforce-only-focused formula it hopes to replace.

But the bill faces strong opposition. The Oregonian editorial board attacked the bill after a House Education Committee hearing, and State Sen. Mark Hass (D-Beaverton), who testified against it, said:

I’m not sure what the desire is or what problem is being addressed by HB 2587, but I am sure the 40-40-20 goal has had a positive impact on Oregon’s higher education system, students, and economic outlook. I am equally sure repealing the 40-40-20 goals, as HB 2587 would, will cause much of Oregon’s progress in higher education to stagnate or worse.

Clearly, the opponents of the bill are politically motivated to set up the state’s public education system for failure. If the state fails to achieve its unrealistic numerical goals by 2025, public schools and higher education will be scapegoated.

Rather than framing education policy around catchphrases, such as the 40-40-20 goals, hoping to inspire students and teachers to achieve more with less resources, the state should adequately invest in public education to reach its desired outcomes.