Unemployment Rates vs. Level of Education

I ran into a friend today that has been unemployed for a while. He seemed pretty beaten down, and doesn’t even really seem to be trying anymore. “1 out of every 10 people can’t find a job.” Almost like that stat made it okay. Well, it does seem like a huge amount of people. Is there less stigma attached to being unemployed now?

However, he does have a degree and some experience. This reminded me of a graphic in Businessweek of the benefits and costs of college. They compared unemployment rates when separated by level of education. People who don’t have a high school diploma have triple the unemployment rate of someone with at least a bachelor’s degree.

You can view the original article here [pdf], which also has an interesting chart showing that higher education expenses have been increasing at double the rate of medical care since 2000. College tuition and fees are up 92% (!) since 2000. That trend simply can’t continue… can it?

Comments

  1. klein3351f says:

    How do does someone remain unemployed for months or even years without becoming homeless? You can’t live on unemployment assistance. I guess you’d have to eventually find someone who had a job and a place to live to allow you to crash with them for free or nearly free.

    When I hear about the average person going at least 7-8 months being unemployed, I can’t imagine how I would survive. It would drastically change my life, that’s for sure.

    As for a stigma being attached to unemployed people. I never understood that. Your job does not define you as a person, regardless of what it is or whether you have one. Anyone who allows their job to define them needs to ‘find themselves’ outside of their worth to their place of employment.

  2. Isn’t it great that the gov’t now owns the college tuition loan biz (save for one bank in CO)? Why do you think they want to own it; taxes and control. That’s it. And with debt forgivness after, what, 20yrs? Who pays for that? You and me. What a joke.

  3. A large part of the problem is the pension benefits that a University employee enjoys. Take UC system in California, the pension guarantees 85% of salary after retirement.

    The other issue is student loans. In order to encourage people to get more education, government has provided tons of student loans. However, because of the availability of the loans, intuitions met little resistance when they increase the tuition. The one thing that people don’t realize is that student loan stays with the person even during the process of bankruptcy.

  4. Waiting for a “Higher Education Reform”!

  5. I’d rather have a college-educated person get their remaining debt forgiven after 20 years, then have them not go to college in the first place. The bigger picture here is an *educated* work force. And if that means some small percentage of the loans get forgiven, IMO, that’s a small price to pay.

    (I paid for my entire engineering education from loans – as the first person in my family to get a college education, I couldn’t have done it any other way. Loans paid back in full, BTW.)

  6. I am just throwing this out there, but just because education and employment rates are correlated, does not necessarily mean that the two are causal, right? I mean, someone who is makes a plan, and is disiplined enough to make it through a curriculum might be more likely to be employed based the same attributes that helped them get education in the first place.

  7. Alternatively, the more educated someone is, the more likely their job is specialized. This means they may be more critical to company operation, or possibly any replacement will require a large amount of training, making it more profitable to carry them on the rolls during the recession rather than rehiring after.

    Not to mention the characteristics of this particular recession are such that it has impacted the construction and manufacturing sectors the largest, typically more blue collar jobs than white.

  8. JoetheBankgeek says:

    Every time I get up in the morning I beat my drums and the sun comes up. Therefore if I beat drums the sun will come up. So who needs an education? I mean it’s just culture. Besides who ever heard of a guy going to school and making the sun come up because of it? You gotta beat drums if you want the sun to come up. And the unemployed aren’t really unemployed. Most of them do some work somewhere making money in the underground economy. But if they don’t work who cares? They are still consuming and somebody somewhere has to use or buy the products and services the employed are making. Therefore unemployment is a good thing for society. And it keeps prices down too.

  9. Well being married (or the equivalent) can be a big buffer. My husband hasn’t worked since August, and the family budget has hardly suffered. I’ve been working more hours, our non-retirement savings rate is not as good as it was, his retirement savings have stopped, and haven’t dared to go shopping for clothes … but we’re in no danger of being homeless. We had worked hard for 3 or 4 years to completely pay off the mortgate; another huge help.

    Actually, things may be a little too good. I’m afraid he’ll never go back to work …

    Anne

  10. Sometimes statistics tend to subdue critical thinking. So I’m better off going to a semester of college, dropping out with minimal-to-no college debt and getting a job? We tend to throw statistics around as if they provide a substantial picture of life.

  11. No.. the trend can’t continue… the country is turning its back on the one social service that helped it stand out in the 1960s – 1990s… education..

    I just heard news that UCLA is attempting to cut its Bachelor degrees from 4 to 3 years… ridicilous!

  12. I have a buddy on the board at a community college and enrollment there is booming. It’s capitalism at work. If a 4 year degree at an expensive institution isn’t a good value, people will start going to community colleges. To be honest, the education is probably pretty comparable…

    To the people who are concerned about the “government takeover” of student loans, I’m confused.

    I was under the impression that the banks were simply acting as middle men and making money off these loans that were essentially government subsidized anyway. The government simply cut out the banks so they could make MORE loans and CHEAPER ones at that. Seems like more people having access to student loan money is a good thing. Am I wrong here?

    Also, I’m guessing you can still always get a loan through the private markets, they just may not give you the same deal as the government can.

  13. Maury: You’re right on student loans — the government just cut out the subsidy. Banks can still offer all the private student loans they want — they just won’t get our taxpayer dollars to help them out. Something liberals and conservatives should both be able to support, in my opinion.

    As for unemployment, this Atlantic Monthly article may be instructive: http://www.theatlantic.com/magazine/archive/2010/03/how-a-new-jobless-era-will-transform-america/7919/

    “The Great Recession may be over, but this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into a despair not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years to come.”

  14. Sometimes people don’t realize it but a good education is like diversifying your assets. A good education will enable you to communicate and read difficult material. Today it means you have some ability to work with computers. With a college degree you can sell insurance, go for a real estate license, manage an office and do a lot of things. The high school drop out, on the other hand, who works construction, for example, is limited in what they can do if they lose their job.

  15. “A good education will enable you to communicate and read difficult material.”
    You’re kidding right? Apparently my lack of a degree has cause me to be hindered in some way as an Infrastructure Architect? Are you saying I need a good education to read someone like, I dunno, Nikola Tesla?

  16. I’m not saying you need a good education to read Tesla but with a good education you will be able to read Tesla.
    The data speaks for itself. It doesn’t mean you need a college degree to earn a good income or stay employed in a recession but on average eduction makes a big difference.

  17. I quoted and blogged about this on my own blog page at collegeisuseless.com ():

    Although I completely believe these numbers the problem is that the conclusion is totally wrong. Yes, based upon these numbers college graduates with at least a 4 year degree are less likely to be unemployed than someone with only a high school or 2 year degree. Here is the problem: In today’s “westernized” climate highly motivated individuals seek at minimum a 4 year degree (however, not all college students are highly motivated). If you measured level of motivation and drive in all individuals you would find that the highly driven folks are less likely to be unemployed. Therefore, it’s not a higher education argument per-se, instead these numbers are driven by the level of drive and motivation among individuals pursuing 4 year degrees and higher.

  18. El Gringo Colombiano says:

    I believe the use of open source training materials in education, could be a tremendous “ROI” for some nonprofit to work on. If the bipartisan clueless DC politrickians had any vision, they’d of included some funding in the 2009 stimulus package for this type of effort.

    At least start with the AP courses, the type of courses many take such as Physics I, Microecon, US History I, etc. Materials could be pdf texts, or better yet pdf texts + .wmv/.avi file of audio lectures from a prof while visually showing the whiteboard in which prof is writing text on.

    A hard working student (whether highschool or “adult nontraditional”) could take ~1 yr off of college tuition costs by agressively using such a program, & could do so even if Ruraltown, Montana even if HS or Community College teachers in said town suck or are not available for said courses. Hell even the US soldier in Afghanistan could take advantage of said materials, to prepare for when his service ends. So much for “support the troops”, DC politrickians.

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