Tag Archives: community college

A riddle with a twist

What costs $24,000 or more; takes 4 years to deliver; can’t be insured; has no cash surrender value; can’t be returned or exchanged; comes with no performance commitments and is covered by the two-word guarantee: caveat emptor?

An undergraduate degree.

Such is the mystique surrounding universities that otherwise perfectly rational human beings line up like lemmings to press hard-earned money into the palms of people who work in registrars’ and admissions offices. This in spite of media coverage of the plight of university graduates who’ve watched employers devalue and demean their diplomas and the four years of work that went into earning them by offering unpaid internships, short term employment contracts or permanent part-time engagements. No benefits, no stability, no prospects. The labour market in Canada and elsewhere is awash in undergraduates and post-graduates who are free to sell their services at whatever severely depressed prices the market dictates, or run the risk of earning next to nothing or nothing at all.

Employers are playing the game according to the rules of supply and demand in pursuit of profit and positive return on investment. The question is, by what rules are parents playing that we’ve arrived at this point? How much damage is inadequate decision making going to do to the financial future of our children and, quite possibly, the country, before we accept that we’re in a buyer’s market for certain kinds of education. The university degree is a commodity and it’s in oversupply in certain disciplines. Every new diploma in those disciplines that hits the street and has no takers drives down its own value and the value of diplomas like it.

Parents who choose to sleepwalk through these economic times when it comes to choosing post-secondary education are bringing about precisely the outcome they spent so much money trying to avoid. Absolute trust in the inevitability of work for all bearers of all university diplomas is out of place in 2015.

Management training: Keeping it on the company campus and How to join the 1%are two articles from The Economist that show just how quickly some in the business community adapt to new ideas. And if those ideas don’t pan out, there are always new ones waiting in the wings.

I’m a firm believer in the need for healthy, affordable universities. My children and their spouses are now established undergraduates and post-graduates. Where else are the people we’re going to need to get on with the rest of our life going to come from if not from universities, community colleges and technical schools? I’m not just talking about medical and other professional people. I’m talking about people who’ll come up with better ideas than the ones we have now about climate change, air pollution, land use, R & D, manufacturing, natural resource extraction, inadequate transit and drought in key food-producing regions of the world, just to name a few.

Those temp jobs that always seemed to be there for anyone who needed a little spare cash every now and then have morphed into the new normal for 50% of working people of all ages, yourself included, dear reader. And not only in Canada.

Head-in-the-sand attitudes, not mass hypnosis, are responsible for the outbreak of PEV (precarious employment virus), aided and abetted by vote-buying tax breaks paid for with taxpayer dollars that were supposed to generate work for Canadians but instead have accumulated to the tune of over C$500 billion in dead money according to former Bank of Canada and now Bank of England governor Mark Carney:

“Bank of Canada Governor Mark Carney has taken a rare swing at corporate Canada, accusing companies of sitting on huge piles of “dead money” that should be invested productively or returned to investors. ‘Statistics Canada numbers show Canadian non-financial corporations with a cash hoard of $526-billion at the end of the first quarter of 2012, an increase of 43 per cent since the recession ended in 2009.’”

Universities cater to the demands, not the needs, of the students who make up the bulk of their clientele. What students need is a strategy to deal with employers who won’t offer full-time employment. One way to deal with them is to not plan to work for them. Would you approve a mortgage or car loan for someone who can only find part-time work? Wouldn’t it be ironic if we reverted from being a cashless society to a cash-only society? As PEV continues to spread and economics forces more and more families to consider options other than university, employers will have to raise salaries, train, and revert to the full-time employment model to attract the talent they need. But that won’t happen overnight, if it happens at all.

A review of the literature dating back to the early 2000s will show that many universities are struggling to cope with reduced government funding, declining enrollment and the impact of technology. You might want to read what James Duderstadt, President Emeritus of the University of Michigan, had to say about the subject in the ‘Emory Report dated March 20, 2000.

The era of ‘you pay your money and you take your chances’ is drawing to a close. Forty million Americans owe US$1.2 trillion in student debt. Seven million have already defaulted on those loans. Many of them haven’t or won’t complete their programmes. Still, universities have no incentive to scale back their student intake based on the demands of the economy when they can collect 100% of their ‘fee’ from each graduate they produce regardless of whether that graduate finds work or not. It’s that intake that attracts government funding. Why does the buying public accept that?

According to The Guardian, the Bank of England believes that contract work is here to stay. Parents and their children may not agree with that assessment, but due diligence demands that, at the very least, they take all reasonable steps to assess its implications.

If you have questions, PDD has answers. I invite your inquiries and your comments.


F. Neil Morris
President & Founder
Personal Due Diligence

+1 (905) 273 9880

As one parent to another

The law of “demand and supply” explains how a free market system assigns monetary value to goods and services. Your children are growing up in a free market system and you work in one. Like democracy, it isn’t perfect, but it sure beats what’s in second place.

In time—and by osmosis because we still don’t teach this in school—they’ll find out that (a) a thing, like an employee, is worth only what someone is prepared to pay for it; (b) anything that can be bought and sold is a commodity subject to the whims of the markets in which it’s traded, including the markets for education and people; (c) if you have a nagging feeling that the postsecondary education industry is trying to influence your decision to buy what they’re selling, it’s because they are. Which is as it should be. After all, education is a business, too.

But one size does not fit all. The better your understanding of your children’s needs and your combined tolerance for risk, the better the fit. That includes what the labour market wants now and what it will likely want by the time your children graduate. It’s the definition of and raison d’être for Personal Due Diligence.

Another definition includes being aware of how we’re seduced into buying many of the things we buy and how to respond. Enter Terry O’Reilly. When you find yourself at his Under The Influence website, listen to his podcasts. Terry is about business and consumer behaviour, not paranoia. His programme airs on CBC Radio One. He understands better than most how we come to believe in and do the things we do because he was and is an influencer.

As it happens, not all influencers are professional advertising or marketing people. Some are friends and relations, particularly when it comes to perpetuating the myth that any old university degree or diploma will open any door and that we’ll all live happily ever after. If it happened to be the right degree or diploma in front of the right door in the right place at the right time, it might. But that would be trusting to chance. Is that what you want for your children? Accepting the wrong position for reasons of status and then losing it carries no weight at a food bank.

Bruce Stewart’s January 8th post “It’s at least a Master’s degree today … but why?” makes a powerful argument for having at least two university degrees, but it’s the relevance and applicability of the degree rather than the number of degrees that will increase the odds of “happily ever-aftering”.

Education isn’t a rite of passage: it’s a way of thinking about surviving in a technologically advanced society. It may be a commodity, but it’s an expensive commodity and it shouldn’t be an impulse buy. The house we live in may be our single biggest purchase; the education we buy for our children is our single most important purchase. If your children are young enough, expect to find yourself contemplating putting your money down for a trade school, community college or university education for them, if you aren’t already. Or guiding them in how to pay for their own.

The dialogue that comes with that contemplation can’t begin too soon. I’ve dealt with elementary, secondary and postsecondary students and have two adult children of my own. At what is arguably the most strategically important and sensitive period in their life, your progeny will be convinced that they know it all. What they don’t know and won’t until it happens to them (and the odds are that it will) is that work is stressful and that unemployment is disruptive and potentially destructive. Losing a job can often be traced to a series of avoidable mistakes or, if you prefer, bad decisions. The consequences of those mistakes were written in the anguish on the faces and in the voices of each of the almost 2000 people I’ve met one-on-one immediately following their terminations over the last 11 years. And that doesn’t include the groups.

This is not a critique of postsecondary education, university or otherwise. Its job is to provide its customer—you—with choice. Personal Due Diligence is here to help you navigate through the process of making the best possible choice. Education of any kind is an investment in building a life and a lifestyle. It’s no longer a discretionary buy. And like every investment, it carries with it an element of risk.

The law of demand and supply applies to employment, diplomas, undergraduate degrees, postgraduate degrees and the gasoline in your tank. All are commodities. The difference is, if you don’t do your personal due diligence, you’re virtually guaranteed full value for the money you spent on the gasoline, but only the gasoline.