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Relearning the GI Bill lessons

What is so distressing about a recent Center for Michigan’s Bridge feature article is that it positions higher education as a combination of vocational training and supplier to Michigan employers. Where the chief  purpose of Michigan’s public universities should be to prepare students for a professional job in the student’s major with a Michigan employer immediately upon graduation. This has never been – nor should it be – the purpose of higher education. Moving in that direction would be a huge mistake for today’s and tomorrow’s college students, the state and the country.

In this post I want to deal with the notion of higher education as vocational education: preparing students for a job today. In a future post I will write about why defining the purpose of Michigan public universities as preparing students for Michigan jobs is also really dumb.

Let’s start with a personal story. I write about it because it is typical of many Boomers coming out of college. It took me nearly a year to find a professional job after I received my masters degree in urban planning from the University of Michigan. Was I poorly served by UM and/or was my degree of little or no value because I didn’t find a professional job in my field immediately after graduation and for nearly a year worked in a low wage, low skill job? Of course not. And I only worked in the field of urban planning for the first three years of what now is a 37 year career. Does that mean that my degree was of little or no value? Once again, of course not. I learned more than vocational/specific job skills in that urban planning program. And it is those broader skills that have served me well throughout my career.

The main reason I didn’t find a job immediately after graduation is that college graduate Boomers flooded the labor market. There were more of us looking for a job than jobs available. I had no idea – nor did I care –  if urban planning was on the official government approved hot job list when I got my degree. (The odds are it wasn’t.) But despite no immediate professional job and a degree in something that was not on the list of future high demand jobs I did fine. And so did most of the many Boomers in the same situation. (For the big picture see the terrific Education Sector article I wrote about previously.) Why do we think it will be any different for today’s college students?

The main reason there are some unemployed and lots of underemployed college graduates today is that the national economy is not producing enough jobs. Since 2001 there has been basically no job growth in America. That isn’t the fault of Michigan’s or America’s higher education institutions. Nor does it mean that the value of a college degree is low and declining. The exact opposite is the case. The lifetime value of a four-year degree or more is higher today than ever before and almost certainly will be higher in the future.

Since the start of the Great Recession America has lost 7 million jobs. 6.4 million of them in the low education attainment sectors of the economy (primarily factories, construction, hospitality, retail, and temporary services). The high education attainment sectors (primarily health care, education, finance and insurance, information and professional and technical services) have lost around 550,000. This is a continuation of a two decade long pattern. Since 1990 high education attainment industries – those where at least 30 percent of their employees have a four-year degree –  have employment growth of 36 percent compared to 7 percent in the rest of the economy. The odds are great that that trend will continue and that Michigan’s and America’s long-term challenge is we don’t have enough college graduates not that we have too many.

Thankfully at the end of World War II policy makers didn’t define the purpose of higher education as filling jobs immediately available. There were hardly any. Certainly no where near enough to provide jobs for the millions of returning service men and women. The approach policy makers took was to heavily subsidize higher education for returning service personnel to train for jobs when the economy was growing again. Not only did the government pay full tuition they also paid a stipend to cover living expenses.  And they didn’t put any restrictions on what jobs/careers one could train for. My father, who already had a law degree, took post graduate classes to learn import/export law. A specialization he only used decades later. The man who cut my hair when I lived in Lansing used the GI Bill to go to barber college. They both benefited and so did the country.

In fact the growth in human capital, in a broad set of occupations chosen by students/consumers not government, was a major factor in a generation of stellar American economic growth. That is why the GI Bill is still broadly viewed as one of the most effective public programs ever. It was focused on investing for the long term.

As Claudia Goldin and Lawrence Katz demonstrate in the must read The Race Between Education and Technology American economic strength has for more than a century been aligned with education attainment. Leading economy on the planet when education attainment was rising, losing ground internationally as education attainment stagnated the last three decades. The lesson from the GI Bill is that when there are no jobs don’t blame higher education for graduates not finding jobs. Rather provide a stipend to cover living expenses (think something like AmeriCorps) for college students and generous tuition support to increase human capital for the jobs and careers that will be there when the economy expands again. Those who get degrees – in any field – will be big winners over their career and so will the country.

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