Recent college graduates seeking jobs are finding more competition from across the globe. American companies are cutting costs and raising revenues by employing international workers, Nancy Folbre, a University of Massachusetts economics professor, explains at the New York Times' Economix Blog.
- Nancy Folbre, New York Times' Economix Blog — How to Cut Skilled-Labor Costs:
Since the 1990s, the global supply of skilled labor has greatly expanded and the technology for using this labor wherever it is has greatly improved. Why hire a more expensive employee when a cheaper one is available? Why pay taxes to educate and train highly skilled workers when other countries (and their families and taxpayers) will do that for you?
The disruptive impacts of globalization initially hammered workers without much education. Many workers holding college degrees remained optimistic about the benefits of international trade, celebrating improvements in their own purchasing power.
Now, my students can decide for themselves if lower prices will compensate them for reduced opportunities and lower wages. More than half of recent college graduates in the United States are either unemployed or are working in a job that doesn’t require a bachelor’s degree. Entry-level wages for employed college graduates were lower in 2011 than in 2000.
What can American students do? Change majors? Folbre writes that students in science and technology majors, often considered majors with guaranteed jobs, are finding that they are losing the jobs they want to global outsourcing.
In other news, two recent studies find that students who attend for-profit colleges and universities face more financial risk than those who attend nonprofit and public institutions. The Philadelphia Inquirer has more.
- Jeff Gelles, The Philadelphia Inquirer — Students at for-profit colleges are more likely to be stuck in debt, study finds:
Students who attend for-profit colleges – nearly one-tenth of all those enrolled in higher education in 2009, according to a new U.S. Senate committee report – are more likely to wind up mired in debt than their counterparts who attend public or nonprofit institutions, says a study by the National Consumer Law Center. But wherever they were schooled, it says, students who fail to capitalize on their training are often stuck with no way out of debt.
The consumer group's study was made public Monday, the same day Sen. Tom Harkin (D., Iowa) released findings from a two-year examination of the for-profit higher-education industry by the Senate Committee on Health, Education, Labor and Pensions. Both reports suggest that students attending for-profit schools face an extra measure of financial risk.
The Senate report, citing Education Department data, said that 96 percent of students enrolled at for-profit institutions borrowed for school in 2009 – compared with 13 percent at community colleges, 48 percent at public four-year colleges, and 57 percent at private colleges.
The law center, which advocates for low-income consumers, focused on what happens to students who fail to repay student loans, and the shortcomings of programs designed to help distressed borrowers cope.
In 2009, its report said, 15 percent of students who had left for-profit institutions within the previous two years were considered in default of their federal student loans, compared with 4.6 percent of students who had left private nonprofit schools.