“The literature clearly demonstrates that postsecondary graduates tend to fare better in terms of labour force participation, unemployment, and earnings than do people with less education.”
The Cumulative Earnings of Postsecondary Graduates Over 20 Years: Results by Field of Study
— Statistics Canada
“Gigs move the risk away from organizations and on to the individual. This is in stark contrast to the secure 9-to-5 corporate arrangement that workers demanded and received in the mid-20th century. The latter is becoming more and more of a spectre as cost-cutting, off-shoring and salary-pruning continue to erode economic security for the average person. It’s easy to argue that ‘developing one’s own brand’ is becoming more important as we move further into this new century.”
How The Gig Economy Is Reshaping Careers For The Next Generation
— Forbes, Feb. 15, 2019
If a family has second thoughts about the house it just bought, it can sell it, usually at a profit. If its new SUV turns out to be a lemon, it can be used as a trade on another one or sold at a modest loss. A university degree, on the other hand, can’t be sold. It can’t be returned for a refund and it does not guarantee an income.
It has to be worked the way farmers work their fields until the crop is harvested and a buyer found, and that assumes a favourable growing season and an equally favourable market. Graduates have no “crop” to sell until four years after they “plant” it at the earliest. If they plant the wrong “crop” and can’t sell it because of poor market conditions, they’ll have to settle for something less than work “in their chosen field”.
Borrowing money to finance an education can saddle a graduate with student debt for years. This is the point where you’ll want to research student debt in the U.S. and elsewhere, starting below.
There are 28,000 universities in the world. By 2025, enrollment in them will reach 262 million. Each of those students will be looking for a permanent, 40-hour-a-week job, benefits, a pension and the relationship that spawned them that was over 100 years in the making. It was supposed to have been carved in stone. But the C-Suite would rather hire technology and software than people.
That thinking will impact on up to 43% of all jobs, professions included. Many employers are hiring for the duration of specific projects only. When projects end, contractors leave. That’s what the gig economy and precarious employment look like. Parents I speak to say they’ve heard of neither and have no idea what they are. Universities do, and they’re resorting to similar tactics.
What will your strategy be for dealing with the state of the world’s economy and those 262 million students? Where will employers be shopping for the graduates they’ll need? How will the two groups relate to one another when your children enter the labour market once they graduate?
In 2012, as many as 300,000 graduates with one or more degrees experienced both. They were working as unpaid interns because they couldn’t find work in their chosen fields. They couldn’t find anyone who would pay for the education they were trying to sell. Unpaid internships have since been banned by law, but they persist. What’s on your child’s list of chosen fields? Why is it there?
I founded Personal Due Diligence (PDD) in 1976 so that my children would have a resource to help them understand what university education as a commodity looks like and how that would determine what the labour market would have in store for them before they made any commitments. See “What Jobs Are Affected By AI?” (Brookings Institution, Nov. 2019) and “The Ultimate Backup Drive” (Bloomberg Businessweek, Nov. 18, 2019).
In “The World-Shaking News That You’re Missing” (Nov. 26, 2019), Thomas L. Friedman wrote: “I still believe that the most open systems win — they get all the signals of change first, they attract the most high-I.Q. risk-takers/innovators and they enrich and are enriched by the most global flows of talent, ideas and capital.“
This is some of what you’ll find when you do due diligence on this subject:
- The World Economic Forum predicts that by 2020 we’ll be creating and storing 40 times more bytes of information about ourselves in one day “than there are stars in the observable universe.”
- An Accenture report entitled ‘ExplAIned – A guide for executives’. Another from IBM entitled ‘Quantum Starts Here’.
- The UN predicts that in 2050, sixty-eight percent of the 9.7 billion of us who’ll be living on this planet will be living in urban areas. How many families will be able to afford it?
- Productivity loss and older technology are keeping executive management awake at night. McDonald’s nearly missed the future according to “McDonald’s CEO Wants Big Macs to Keep Up With Big Tech” in Bloomberg Businessweek. Microsoft’s Bill Gates almost let the Internet slip away. GE is struggling. IBM is betting the company on Artificial Intelligence (AI) and Watson.
- Over half of all students who begin degree programmes in Canada won’t complete them.
- Federal Reserve Board releases “Report on the Economic Well-Being of U.S. Households in 2018”. (For a discussion of the ‘gig’ economy, please see Page 18.)
- Toronto Star publishes “Federal response to ‘gig’ economy hampered by unreliable data”.
- New York Times publishes “California’s Contractor Law Stirs Confusion Beyond the Gig Economy”.
- “Canada’s middle class feels the squeeze”.
- Times Higher Education snapshot of the stresses under which higher education finds itself.
- FORBES and the FEDERAL RESERVE BANK of NEW YORK report that 44½ million Americans borrowed $1½ trillion (U.S.) to pay for higher education for themselves and their children.
- From CNBC: “Nearly 40 percent of [U.S.] borrowers are expected to default on their student loans by 2023.”
Universities are paid to open the eyes of their graduates. Employers separate the wheat from the chaff based on what graduates look at and what they see that others don’t. If money’s no object, none of this matters. If it is, it does.
Personal Due Diligence sees things that others don’t. Bring us your questions and your concerns about what you just read and we’ll talk.
F. Neil Morris
PERSONAL DUE DILIGENCE