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Credential Inflation


            Inflation is a subject many people avoid because they fear it. Much of this fear comes because, usually, when people talk about inflation it has to do with money and it typically has a negative impact on people’s lives. There are, however, other types of inflation that influence and affect the lives of many people. One such type of inflation is called credential inflation, which is the devaluation of academic credentials. This essentially means that the overall value of educational degrees decreases over time causing college graduates to have less of an edge in the job market and have more of a struggle finding jobs in their fields. This then causes students to need higher levels of education for the same employment opportunities available to them in years past. Credential inflation stems from the push for more people to go to college for higher education and a move away from technical training (Collins, 1979). This paper will discuss the impact of credential inflation on the wages of college graduates, the jobs available to them in their fields and, the overall return on the investment of their college degrees.
            In the 1960s before there was a push for students to get a college education the wage gap between those who only had a high school diploma and those who had a college degree was not that large, however this gap has increased over the years due to credential inflation. An article written by Lydia Dishman concerning how Masters degrees have become the new Bachelor’s, she quotes a Pew Research Study about how high school graduates in 1979 earned 77% of what college graduates made. While in recent years the same study was done and high school graduates now earn only 62% of what college graduates with a four-year degree earn (Dishman, 2016). Another way we can look at this ever growing wage gap is through looking at what people made on average then and now. Looking back to 1965 college graduates earned on average $38,833, while those with only high school degrees earned on average $31,384. In comparison by 2013 with inflation adjusted figures, college graduates earned on average $45,500 while those with just high school diplomas earned on average $28,000 (Leef, 2014). These statistics illustrate that credential inflation has thus far affected both college graduates in a positive manner and has negatively impacted those with high school diplomas. While looking at how much college graduates make compared to high school graduates, it would be easy to assume that graduating college is the solution to finding a good paying job, however it is only a piece of the picture. What credential inflation is doing is actually widening an already devastating wage gap between those that can succeed in the college realm and those that can’t. The piece of the picture these statistics lacks to show us is that even though college graduates are getting, on average, higher paying jobs, many of those jobs are not in the field of study of graduates.
            Although college graduates may be able to find jobs, they are often not in their field of study. One such example is William Klein, who was a history major, graduated with his Bachelor’s degree, but after graduation ended up moving back to his parents’ house working the same job he had in high school working minimum wage. In the article written about his story it states that to get a tutoring job or a job giving tours at a historic site would require a master’s degree (Pappano, 2011). His story is not the only one that ends this way. My wife and one of my brothers also found themselves in similar situations after graduating from college. After months of searching for jobs and plethora of job interviews, one was finally able to get a call center job while the other got a job working at Wal-Mart. According to the Bureau of Labor Statistics, 36% of college graduates “work in jobs that don’t require any advanced academic preparation” (Leef, 2014). This then begs the question, that if a college degree is supposedly becoming more valuable, why then are there so many who graduate only to end up at a job that doesn’t require them to have any type of degree, and is a college degree really worth it at that point.
            With the two previous points in mind, one must ask, is there a return on investment for a college degree? The short answer, it depends. As illustrated, there are a large number of students who graduate with few job prospects, are not able to get jobs that make much money or require a degree at all. When looking at the cost of tuition, there is a large disparity in the cost between universities, particularly between Ivy League schools and other top tier schools, compared to state schools. This disparity is important when it comes to looking at whether a college education has a return on the investment made. For example, a student who attends Harvard University will pay roughly $72,000 in total (Cost, 2017), and for this example let’s assume they need to take out the entire amount in student loans, which over the course of four years would be about $288,000. If this student then chooses to get a degree in elementary education, they can expect to make around $50,000 a year (Elementary, 2017). With an average interest rate on direct subsidized student loans of 4.45% (Staff, 2017), that means with a minimum payment of around $1,500 a month, it would take roughly 30 years to pay it off and would have accrued about $240,000 in interest alone, for a total cost of about $520,000 for a college education at a top tier school. A teacher in this situation would be paying off their college education for basically the rest of their lives. Now not all educations cost as much as a degree at Harvard, but for someone in this situation, or one very similar their college education would have negative to zero return on investment.  This hypothetical situation, though seeming farfetched, is basically the situation of multiple teachers my mom works with. In many ways and for many people, a college education does not have a return on the investment.
            With this problem comes the need for a solution. What needs to happen is a credential deflation. I propose, first of all, that we stop credential inflation on newer degrees such as computer science, by consistently changing the degree in difficulty to match what jobs require, so that masters degrees do not become required for regular jobs in this field. The next step would then be to halt and reverse credential inflation on other degrees. This would require a two pronged attack, firstly on the employment side and secondly on the college side. On the employment side the job requirements would need to be evaluated and then the degrees would then need to be adjusted accordingly. In short, college would need to be more geared to helping students match with and find jobs. Thirdly, greater importance would need to be placed on technical training and society as a whole would need to embrace the idea that not every person needs a four year degree. College degrees should still be important, however not everyone wants to go to college and many would be more successful in becoming educated and trained in fields such as welding, carpentry, plumbing etc. This would then also benefit society as a whole, helping more people find jobs that they love or at least don’t despise. Implementation of this idea would most definitely be tricky, however I believe it would effectively solve our current problem of credential inflation.
            Credential inflation is like debt, the longer we leave it alone, the more problems we accrue. This is something that needs to be addressed and soon. Not only does credential inflation impact the wages of college graduates, it limits the jobs available to them in their fields and causes the investment of college degrees to have little to no return. Our country needs to aid future generations by working towards credential deflation so that more people in our society are able to contribute and more people can work at skills they can be proud of, provide for themselves and their families and work at jobs that they enjoy.











References:

Collins, R. (1979). The Credential Society: An Historical Sociology of Education and      Stratification. New York: Academic Press.
Cost of Attendance. (n.d.). Retrieved November 16, 2017, from         https://college.harvard.edu/financial-aid/how-aid-works/cost-attendance
Dishman, L. (2016, June 14). How The Master's Degree Became The New Bachelor's    In The Hiring World. Retrieved November 14, 2017, from        https://www.fastcompany.com/3057941/how-the-masters-degree-became-the-new-bachelors-in-the-hiring-world
Elementary School Teacher Salary (2017). How Much Can a Elementary School            Teacher Expect to Get Paid? Retrieved November 18, 2017, from          https://money.usnews.com/careers/best-            jobs/elementary-school-teacher/salary
Leef, G. (2014, April 21). College Degrees Aren't Becoming More Valuable --        Their Glut      Confines People Without Them To A Shrinking, Low-Pay Sector Of The Market. Retrieved November 18, 2017, from https://www.forbes.com/sites/georgeleef/2014/04/21/college-degrees-arent-becoming-more-valuable-their-glut-confines-people-without-them-to-a-shrinking-low-pay-sector-of-the-market/2/#58145a6b362a
Pappano, L. (2011, July 23). The Master’s as the New Bachelor’s. Retrieved November 14, 2017, from http://www.nytimes.com/2011/07/24/education/edlife/edl-       24masters-t.html

Staff, C. (2017, October 11). What are Average Student Loan Interest Rates?                    Credible. Retrieved November 18, 2017, from         https://www.credible.com/blog/what-are-average-student-loan-interest-rates/

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