Wednesday, July 3, 2013

College degrees losing value

Another validation of the Captain's Worthless. The overall value of a college degree is on the decline.  Can't really argue with that.  I wonder if we can find out how various majors look?

Looks like some Georgetown students (?) did a study on this.  What is interesting about this study is that they used 2009-2010 data.  They were catching it on the downtrend, therefore the unemployment rates in the chart below must have gotten worse, and simply not recovered.

Of course they use the same data that the government uses to tweak the unemployment rate, so they would probably tell you things have gotten better.  However, if we compare the BLS bachelor+ degree holder participation against the the labor pool, we find another 15 million bachelor degree holders that are not employed because they are not participating. 

update: moved this to it's own post.

Just reviewing that data became a lot more interesting. You can take that data and compute how many people, over 25 years old, whatever their education level, are not participating in the labor market - these people have either retired or given up, but the numbers are huge. 72 million people are not in the labor force. The breakout is as follows, in millions:
< High school: 13.534
High School: 25.043
Some College / Associates: 17.439
Bachelor's and higher: 15.941
How many retired? How many gave up? Hard to say, but we could take a look at the population by age group, and assuming more older people retire than younger, get some guestimates. Still, if 90% of these people are happily retired, the true unemployed count should be bumped up by 7.2 million poeple from 11.8 million to 19 million! That would push the true unemployment rate up by 4% to 11.7%. Underemployment is on top of that. And they are calling this a recovery.

The Social Security Administration keeps statistics of those collecting benefts. They are either retired or disabled, or other, which they call early retirees. The number is 62.5 million, but since 4.5 million of those are children, let's take them out, giving us 58 million retirees. That means 14 million from the over 25 list are not working, nor retired, not counted. There are an additional 7 million not in the labor pool from the 16-24 age bracket who are also not enrolled as students and not counted as part of the labor pool.

So let's add this up: 11.8 million officially counted + 14 million 25+ not counted, not retired + 7 million 16-24 not counted, not in school. That's 32.8 million unemployed. Now the current civilian labor force is 155.8 million, and we've got to add in the 21 million not being counted. That gives us a real labor pool of 176.8 million, and a real unemployment rate of 18.55%.

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