
Why Are So Many College Graduates Driving Taxis? - lmg643
http://www.bloomberg.com/news/2013-06-25/why-are-so-many-college-graduates-driving-taxis-.html
======
caseysoftware
Because our lower education system pounds the idea of "you're nothing if you
don't go to college" into everyone's heads for twelve years. We've all been
told that if we go through college and get the degree, we'll be all set in
life. I think the millennials have it worst of all so far but it's not just
them.

Somewhere along the lines, college changed from being a stepping stone to the
goal in and of itself.. and no one considered what comes after.

~~~
waylandsmithers
>Somewhere along the lines, college changed from being a stepping stone to the
goal in and of itself.. and no one considered what comes after.

I think some colleges and universities themselves are a part of this. The
attitude from my school (small liberal arts) at least was that college was
explicitly NOT meant to be training you for your future career, but rather
that your studies were worthwhile for the sake of learning and personal
enrichment. Just a lot of the "teaching you how to think" bs that liberal arts
schools tend to sell themselves on.

~~~
tsotha
That whole "we aren't a vocational school" attitude is fine for wealthy
people, but if you're going to go $150k into hock to get your degree you
better have something that makes you attractive to employers.

------
mncolinlee
I think it's clear why. It used to be that most jobs could be performed
without any particular major. Instead, a college degree was taken as a generic
business indicator that you know how to work. People with degrees in hard
sciences could always take entry-level computer jobs with no special training.
Technical specialization has resulted in a situation where businesses cannot
find enough high technology workers and the students exiting colleges have
less useful liberal arts degrees in this economy like journalism. In the past,
this was solved by on-the-job training.

Today, large businesses often solve this worker shortage by outsourcing the
job to substandard contractors in countries with far lower pay bands.
Businesses would rather pay to train a cheap, blank slate worker than pay the
premium to train an American with a four-year college degree. This can be
profoundly short-sighted, but the most recent management school generation is
too often wedded to bean counting and manipulating vanity metrics. They often
fail to grasp subjective and hidden business costs. HP's Carly Fiorina is a
classic example. She wanted to cut R&D to zero because she believed it was
purely a cost center and produced no profit. If anything cannot be counted, it
does not count.

~~~
draz
You bring up an interesting point that reminded me of an article I read a week
ago about how Germany does the exact opposite (with overall better financial
implications):

[http://www.economist.com/news/special-
report/21579145-ingred...](http://www.economist.com/news/special-
report/21579145-ingredients-german-economic-success-are-more-complex-they-
seem-dissecting)

"Germany managed to avoid a surge of lay-offs after the financial crisis and
has done far better than others at getting the young and the hard-to-employ
into work.

How did it manage that? Most explanations heap praise on the Mittelstand model
and the system of vocational training. Firms such as Storopack or Rösch take
on apprentices, mixing practical training with classroom tuition."

Of course, this is NOT the only reason for their current financial prowess in
Europe, but a contributing factor

~~~
afriesh123
it's also interesting to me that a former economist in the obama
administration is writing an article about college grads driving taxis, right
around the time the powers that be are trying to implement immigration reform
to make it easier to import foreign workers to fill various roles. he seems to
be dancing around some obvious conclusions that the job market is (gasp)
driven by supply and demand for labor, but doesn't quite reach a conclusion.

------
lsc
Personally, I think that the real reason why people with degrees are having a
hard time getting jobs is that at one time, having a degree meant you came
from money. The problem now? this is diluted. More and more poor folk have
degrees, and so it's no longer a reliable class indicator. (the positive view
is that it's also possible that class indicators are becoming less important.)

The problem was that they confused cause with effect, and decided that we
should put a bunch of effort into getting degrees for poor people. This
diluted the degree as a class indicator.

Now, I don't have a degree or rich parents, so obviously, I haven't seen the
parts of the job market that rely on those class markers. I'm the riff-raff
that those filters are designed to keep out.

However, from where I stand? most individual contributor jobs in my industry
that I'm actually qualified for are open to me. In the tech sector, the value
of a degree is smaller than actual work experience. (I mean, if you actually
/learned/ something while getting that degree, that's pretty valuable. But the
paper itself is not.) Internships? they are paid. Maybe not paid a lot, but
something, and the real companies usually pay substantially.

As far as I can tell, unpaid internships are 'class marker inflation' \- "Not
only did my parents have enough cash to put me through four years of art
history, and the contacts to get me this internship, they could support me
while I worked for free!"

~~~
larrys
Off topic and sorry for asking in this forum (but I'm guessing others might
also be interested).

What ever happened with the colo rates re: "Feb 1, 2013" as detailed on this
page:

[http://prgmr.com/san-jose-co-location.html](http://prgmr.com/san-jose-co-
location.html)

Did they raise you on this or were you able to renegotiate favorably? (A post
on this would be nice. Would like to know the business details as I'm sure
others would if you'd like to share).

~~~
lsc
I'm moving to coresite santa clara, and I'm mostly in, but I'm also mostly out
of power, and the conditions are not so favourable for me renting out
significant rack space. I've also been kinda soured to the idea of letting
other people into my production co-lo[1] so I'm kinda re-thinking the whole
customer-accessible co-lo thing.

That's the thing, renting co-lo space, when you least datacenter space is
generally a really shitty deal; the economics make more sense when you own the
place.

I'm also building out a datacenter in my buddy's warehouse in santa clara, but
the fiber isn't there yet, and the power isn't in yet so unless you can deal
with comcast-level network, that doesn't help you. It does look like it will
be pretty cool when it's up; we have a bunch of those 'datacenter in a cargo
container' things; My buddy wants to rent out whole containers at a time to
big players; I am focusing on renting dedicated servers in them. Again, it's
high density, so having a bunch of smaller customers with access is probably a
bad idea.

So yeah, uh, it's essentially still all up in the air, with no real ETA.

[1][http://blog.prgmr.com/xenophilia/2013/05/outage-in-
rack-05-1...](http://blog.prgmr.com/xenophilia/2013/05/outage-in-
rack-05-11.html)

------
steven777400
There was a mix-up of cause and effect, to some degree. Since early colleges
were limited to a very small percentage of the population who tended to have
strong parental guidance and even hired tutors, the average academic ability
of college graduates was much higher than non-college graduates.

The response was that, then, if everyone had a college degree, everyone would
be so able. The problem then is twofold:

First, people without a strong primary education background went to college,
forcing colleges to either lower standards and/or spend time remediating
(financial pressure from governments to tie funding to graduation rates sure
didn't help to preserve high standards).

Second, the presence of a college degree as an indicator of an unusually high
level of prior primary education and academic ability disappeared since so
many people have a college degree.

------
nknighthb
The literal answer is, because there are too many college graduates. The US
educational system, and society's view of education, is still rigged for a
mid-20th-century rose-tinted view of the future that never came to pass, and
was never going to.

~~~
seanconaty
Yup. Just because more people are getting degrees does not mean that there are
enough jobs that require/compensate for having a degree.

But this apparently isn't changing anyone's behavior yet, so the education
bubble continues to grow.

~~~
LandoCalrissian
Are you saying that my degree in underwater basket weaving won't get me a job?

~~~
cobrausn
It's not that simple. Your degree in electrical engineering might not get you
a job depending upon a number of factors, where once it was considered a sure
thing.

~~~
djKianoosh
I have a hard time believing that someone that averages a B in electrical
engineering from any 1st or 2nd tier school can't get a well paying job
somewhere in north america.

~~~
cobrausn
I have some anecdotal evidence to suggest otherwise, but that's somewhat
irrelevant. Perhaps electrical engineering was a bad choice. A business degree
then? Used to be a good path into middle and upper management, is now a
requirement for stable office work (or so it seems to me).

------
nhaehnle
It's called degree/credentials inflation, and it's caused by a combination of
persistent mass unemployment and the message that education can solved it.

Now, mass unemployment simply cannot be solved via education - the parable of
the 100 dogs and 92 bones was discussed here not so long ago. (The original
link was this one, I believe:
[http://alittleecon.wordpress.com/2013/06/19/the-parable-
of-1...](http://alittleecon.wordpress.com/2013/06/19/the-parable-of-100-dogs-
and-92-bones-why-the-work-programme-cant-work/))

However, having a good education and credentials does increase the chances
that you'll get one of the 92 metaphorical bones, so of course it makes sense
to get one. But this only really works reliably if your education and your
credentials are _better_ than those of your peers.

This leads to an arms race which explains why degrees are become
simultaneously worth less and more important.

Edited to add: The effect on degrees is actually old hat already. These days,
it's about an inflation of unpaid internship to spice up your CV, at least for
those in non-technical fields.

~~~
glesica
The real problem, then, is to figure out what is wrong with our system that it
only consistently produces 92 bones...

~~~
gems
Why does something have to be wrong with the system for that to be happening?

~~~
glesica
Keep in mind that the analogy isn't exact. We're talking about workers, not
dogs, and jobs, not bones. Workers are productive. They produce when they have
jobs. So 92 bones, in this case, means that 8 workers out of 100 are idle.
Either society must support them, then, or let them starve.

I reject the notion that they should starve. I'm OK with supporting them, but
wouldn't it be better, more popular at least, to have them produce something?
A resource standing idle is an opportunity so, all else equal, idle resources
should not exist.

I realize it's more complicated than that. Frictional unemployment, etc. But
that's not what we're talking about here. We're talking about a significant
chunk of the population being permanently idled by structural changes in the
economy.

~~~
BrianEatWorld
Except that a fair portion of that theoretical 8% is frictional. In the US at
least about half of unemployment has historically been frictional or
structural.

~~~
glesica
I think it can be easily inferred from my comment that I'm not talking about
frictional unemployment.

------
spikels
College-style education is both expensive and risky. Expensive not only from
tuition but also four years of lost earnings and missed actual experience.
Risky because academia is only loosly connected to the working world - so much
of what is taught will turn out to be irrelevant.

While still unproven alternative education techniques such as online or
internships/apprenticeships may turn out to be more effective and much less
expensive. If employers become convinced traditional diplomas and degrees are
unreliable indicators of quality and better alternatives exist, we could see a
sudden shift away from traditional education.

Would you rather hire someone with a middle ranking college degree or two
years experience and a letter of recommendation from their boss? Or a
certificate from a reputable online program in the exact skill you need?

~~~
purplelobster
I would hire the one with the degree (in computer science), absolutely no
question about it. The person with 2 years experience or certificate with the
exact skill might be able to do 80% of the work (the easy stuff), like writing
some front end code, but as soon as they encounter anything requiring more
than basic understanding of computer science and math and some scripting
skills, they'd be stumped most likely. Not only that, but someone with
extensive math knowledge will see math and elegant solutions where others
would see nothing.

University is a great place for people to learn the fundamentals in a
structured way and learn how to learn. While a few very talented and motivated
folks can pick it up themselves by reading, the vast majority can't reach that
point by themselves (me included).

(Note, I'm only talking about sciences and engineering, those are the only
ones I know anything about)

~~~
joshyeager
I have hired both types of candidate. In my opinion, a four-year college
degree is worth roughly the same amount as two years of real-world experience.
There are exceptions on both sides, but on average four years of college seems
to be roughly equivalent to two years of work experience.

Someone with college experience will probably know more theory, which is
useful. But they rarely realize that large projects are significantly
different from their college work, and they don't understand why you have to
do what your users want instead of what the theory says is correct. So when I
hire someone with a degree and no experience, I know my team will need to
teach them those things.

On the other hand, people without college degrees can get into a lot of
trouble if they don't learn the theory behind their work (especially
algorithmic complexity). So when I hire someone without a degree, I know my
team will need to teach them those things.

------
johnnyg
"because the demand for cognitive skills associated with higher education,
after rising sharply until 2000, has since been in decline."

how about..

because the quality of a degree has been falling for decades and it is now
widely known outside of government and very large corporations that the skills
people have are valuable but the skills a college claims a given person has
are fairly unlikely to track reality or to be real world valuable.

Said the federal land grant college graduate!

------
zachgersh
I am still waiting for more trade schools / bootcamps and apprenticeships to
start opening up in the states.

We should be training people for the job that they will eventually hold
instead of teaching theoretical scenarios and looking over case studies.

Its already started to gain a foothold in the tech industry and I believe it
will be even more in demand as college degrees become less valuable.

------
kevinpet
"If anything, GPS technology may have had the opposite effect."

They're clearly drawing the wrong conclusion. GPS makes being a cabbie easier,
which makes it less valuable for people to put the time into becoming a
skilled professional cabbie, which makes driving a cab a more feasible option
for someone who looks at it as a temporary job.

~~~
cynwoody
On the contrary, Orszag agrees with you. The exact quote is:

    
    
        It’s hard to believe this is because the skill required to drive a taxi
        has risen substantially since 1970. If anything, GPS technology may
        have had the opposite effect. (Acquiring “the knowledge” of London
        streets, as taxi drivers there are required to do, is cognitively
        challenging, but it may no longer be necessary.)

------
boh
Did the study take into account the rise of private higher education companies
that have sprung up in the past twenty years (like the University of Phoenix)?
These colleges are publicly traded companies that have campuses all over the
country. They have a higher acceptance rate, they focus a great deal of
marketing to lower income communities and they notoriously accept people that
may not necessarily be ready for college (as long as they can pay the fees).
Maybe the story isn't "the labor market is so bad that even college graduates
are taking menial jobs" but instead "more blue collar workers are getting
degrees (that don't necessarily get them better paying jobs)".

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6d0debc071
There are a lot of ruderless - granted smart - young people out there who were
essentially abandoned to the education system by their parents. If you don't
have any plausible goal in mind when you go to university, is it really
surprising that you end up nowhere after university? All the education in the
world won't help you if, at the end of the day, you just don't really want to
do any particular job.

------
Glyptodon
> "If cognitive skills became less valuable in the labor market, wouldn’t one
> expect wages to fall more for college graduates than for others?"

Apparent stagnation could also occur if a small proportion of graduates are
become significantly overvalued for non-cognitive skills while a majority
experience wage stagnation or decline.

------
godgod
The Obama economy.

~~~
llamataboot
citation needed

