College Has Become a Tax on Entry to the Middle Class, and That’s What Elected Trump
Great tweet storm from the inimitable Jesse Livermore: https://twitter.com/jesse_livermore/status/865296425894248449
Truth: Universities are a huge waste of societal resources. Their waste goes unchecked b/c they have a monopoly on credentialization.
Given the inflection in university tuition (the average tuition at private universities increased 179%; out-of-state tuition 226% since 1995 — source) and economic shift toward technology and away from manufacturing (technology companies in the S&P 500 are now worth nearly $5 trillion, up from $500 million in 1995; 5 million+ US manufacturing jobs have been lost since 2005 — source), the past ~20 years have brutalized economic prospects for a large swath of Americans.
On the one hand, we now have a segment of people with educations of questionable economic value other than as entry passes to the middle-class employment scene, bought with a mountain of debt that generally can’t be discharged (household debt recently surpassed its previous peak ahead of the financial crisis in 2008, with student loan debt rising to $1.34 trillion from about $500 billion in 2007 — source].
On other hand, we have a segment of people who can or will not shoulder the debt of a traditional university degree. People who — prior to the tuition inflection and shift to a tech-focused economy — could have either attended a state university or attained middle-class lives in manufacturing jobs.
Now both camps have a choice of putting themselves $150k in debt (if they can gain a loan and admittance) or be relegated to jobs at big box retailers making $10 an hour (source) vs. the $20 an hour they could have earned in a manufacturing job.
These profound shifts have occured in just 20–25 years.
That’s why Trump was elected. The hit to pride and general unhappiness of people who have seen their effective salaries cut in half (studies point to a material increase in happiness and decrease in stress as income increase from $10k to $40k per year — source) experienced acutely by the latter group led to desperate embrace of any viable path toward “shaking things up.”
And student debt’s increasing share of overall household debt (from less than 2% in 2003 to almost 11% today — source) could have significant ramifications for future spending patterns in housing, consumable goods and other economic sectors, especially as wage growth remains relatively subdued (source)
College has become a relatively new tax on entry to the non-minimum-wage employment market. And like any tax, there are stiff penalties for non-payment.