On the old blog we wrote a few posts on the education bubble. Today’s New York Times shows how the scam extends to trade schools: “In Hard Times, Lured Into Trade School and Debt”. The Times article focuses on the for-profit aspect of trade schools such as ITT Tech, but the salient point isn’t whether schools are for-profit or not-for-profit, but whether students (and taxpayers, to the extent that government grants are paying the tuition) are getting a reasonable ROI on their educations. In many cases, the answer is no.
The article gives examples of cooking school grads working as busboys, etc. It also notes that the lion’s share of the tuition cost of these trade schools is paid by federal student aid — e.g., 86% of the revenues of the Apollo Group (operator of The University of Phoenix) came from federal student aid last year. This would be money wasted in may cases, even if the training led to good jobs, because local taxpayers are already paying plenty in high school tuition. There’s no reason why this sort of training can’t be offered through a combination of vocational courses and work study/apprenticeships in high school.
More broadly, the paucity of good jobs for tech school and college grads alike highlights the need for substantive government policies to address economic insecurity. For starters, we need a smarter immigration policy. By all means, welcome entrepreneurs who will create jobs for Americans, but stop importing unskilled immigrants who consume more in government resources than they pay in taxes. And stop importing any non-job creators when unemployment is high, like it is now.
We also need to increase our manufacturing jobs as a percentage of our workforce. We need to look at how Germany and Japan manage to have higher percentages of their workforces employed in high-paying manufacturing jobs than we do. We’re still the world’s leading manufacturer, in absolute terms, but we probably need to double our manufacturing workforce to maintain a healthy middle class. Policy makers need to think of this from the perspective of the CEO of a foreign multinational manufacturer: What can we do to make it more attractive to set up shop here? Lower corporate taxes? More emphasis on quality vocational ed instead of shoehorning every kid into a college prep track? More nuclear power plants to ensure a plentiful supply of low-cost energy? Less vexatious litigation? Maybe it will require a more aggressive trade policy.
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