Crisis of the Overeducated

David Grusky says taxes are not enough to establish a more just and equitable society. I like the argument. Occupy Wall Street and its sympathizers, of whom I am one, need more imagination about changing America by changing her institutions, not just her marginal tax rates.

But one of his solutions—fixing the rationing of higher education—confuses me, especially because it occludes the key social problem OWS has so crucially and uniquely brought to light: an economic crisis of the overeducated.

“Overeducated”? Sacrilege. How can anyone in America be overeducated? Meet, gentle readers, Nate Grant, a high school honors student from New Jersey who graduated recently from Ithaca College with $90,000 in student debt. Profiled in The Los Angeles Times last October in an article covering Occupiers worried about “whether their diplomas may be worth less than their cardboard signs,” Grant did what society—and his working-class father—told him to do: attend the best private college he could get into. Now he can’t find a job, is living with his parents, and is thinking about joining the military. Strikingly, he expresses jealousy toward his older brother, an uncolleged UPS driver: “He is married and debt free except for his mortgage, and here I am with $90,000 [in debt] and a piece of paper. . . . I guess I’m proud of my degree. I just don’t see where it gets me.”

The educated unemployed are our rising social problem now.

Is this anecdata significant? I think so. Others, including Paul Krugman, are less confident than Grusky that “the excessive financial benefits of schooling” are “well appreciated as a main cause of rising inequality.” Among 20–24 year olds with college degrees, 81 percent were employed in 2000. But employment tailed off severely after 2007, falling to 72 percent in September 2010. The educated unemployed are our rising social problem now. What’s more, since even real earnings among employed college graduates are down, the educated employed are presenting their own challenges. Krugman points out that between 1975 and 2004 real earnings for college grads rose by less than one percent per year.

Let’s talk politics. Grusky usefully points out that “we should raise taxes” is a hard sell among the American people. I would add that “more of you should go to college” might be a hard sell among Occupiers such as Nate Grant. This is leaving aside the problem of education debt, which you can’t leave aside, especially if your audience is Occupiers. As eye-opening research by Mike Konczal [read Konczal’s response to Grusky] has shown, education debt has driven the protests. On the “We Are the 99 percent” Tumblr site, “student loans” are the most frequently mentioned concern. The terms “paycheck,” “unemployed,” “rent,” and “medical” are way down the list.

Now of course Grusky is fighting the good fight here on the problem of student debt. In a sense it’s the whole point of the “education” part of his article. His solution, though—making artificially inflated tuition more market-competitive—might not be the most useful one.

One reason more and more people are willing to go into more and more student debt is that they were told this is a commodity whose value can only increase, much as homeowners were told the value of their homes could only increase. And, even if the value of a college degree has certainly not collapsed, more and more Nate Grants certainly feel like disgruntled homeowners: they are underwater on their student debt—they owe more than their degree could be possibly be worth. How did we get here? The answer concerns not only markets, but also an ideological tendency, beloved of conservatives and liberals alike, to overvalue the market power of education. Grusky is guilty, I think. A higher education is a great thing in itself. We should do everything possible to make it cheaper—hell, I think we should make it free. But I don’t see how graduating more people from college, even debt-free, can do the social-justice work that Occupiers—and all of us—want to get done.