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New York politicians don’t understand the labor market

Economist Thomas Sowell once said: “The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.”

Politicians will always try to make something “free” or “affordable” in an effort to gain votes. This was the case yet again when New York state voted to make all public two-year and four-year colleges free for families making $125,000 or less.

Making college more affordable does nothing to change the workforce nor the demand for jobs from employers. The one smart thing that New York did with this legislation is require that students stay in New York a few years after graduating. That way they can stay and pay the high taxes up there before moving to the South or Midwest where there are jobs and an affordable cost of living.

Let’s consider one erroneous statement that the State of New York made: “Today, college is what high school was—it should always be an option even if you can’t afford it.”

A high school diploma is often considered a basic requirement to obtain a job. If you can’t get a high school diploma, then at least you can earn your GED.

The belief that a college degree is expected in the workforce now just like a high school degree has been is just blatantly false.

Yes, people often need more specific technical or soft skills in order to get a job. But a college degree with a major in art, history, or humanities doesn’t guarantee them either a specific technical skill nor soft skill.

Also, most people today still don’t have a college degree. Most don’t even have an associate’s degree.

According to the Census Bureau:

88.4 percent of Americans 25 and older have graduated from high school.

58.9 percent have at least some college

42.3 percent have an associate’s degree

32.5 percent have a bachelor’s degree

12 percent have an advanced degree

The unemployment rate in the United States as of March 2017 was 4.5 percent. So evidently even people without a college degree are able to find work.

One may argue that people could get higher paying jobs if they could earn a college degree.

But even if everyone was able to obtain a college degree, employers would still need to be hiring the same types of positions. Even if we all had advanced degrees, we would still need warehouse workers, production workers, call center operators, truck drivers, machine operators (yes, we still have manufacturing), cashiers, data entry clerks, etc. And for the most part, employers aren’t going to pay any more for these positions if you have a college degree.

Your degree in art won’t matter at all if you can’t load boxes fast enough into a truck. And you won’t need a degree for it.

Overall, about 27 percent of jobs require a bachelor’s degree, according to the Bureau of Labor Statistics. Again, keep in mind as mentioned above that about 32.5 percent of adults 25 and older have a bachelor’s degree. Many graduates are currently working in positions that don’t require a bachelor’s degree.

Here’s a good chart from the BLS regarding the types of jobs and requirements in educational attainment.

Capture

Perhaps someone could argue that the BLS data is understated. You may be right. Maybe it’s 29 percent or 35 percent.

But either way, the comment that the college degree is the same as what a high school diploma was is completely false. And making college free for all or even handing out degrees for free won’t change what jobs or available, nor will doing so pay for those jobs.

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