No Longer the "Best and the Brightest"

Student Graduation

There is a common perception that today's college graduates lack the skills required to compete in the contemporary globalized economy. For example, Senator Bob Kerrey speaks of "things that need to happen to get companies the skilled graduates that they need" Wall Street Journal. The executive development firm Future Workplace finds that only half of hiring managers believe that graduates are "well prepared to hit the ground running.". However, anecdotes aside, the evidence suggests the contrary, we now have a surplus of well qualified graduates. To move beyond over hyped newspaper stories and the pleadings of tech employers to import more workers to drive salaries down we need to look at aggregate data.

The Degree Premium Test

If it is true that graduates lack job skills, then we would expect to see a modest and declining premium accruing to college degrees in the work place. If they lack skills the market will price them the same as school leavers who also lack them. In fact, the premium is large and growing "in 2014 the median earnings of young adults with a bachelor's degree ($49,900) were 66 percent higher than the median earnings of young adult high school completers ($30,000)."

The Shortage Fields Test

If the claim is that there is a shortage of graduates proficient in certain fields then we would expect to see the earnings of these scarce people rise relative to others. This again has not happened for instance the salary trend for software engineers mirrors that of the workforce as a whole.

The Employer Survey Test

Surveys of employers asked about the deficiencies of new graduates show an emphasis on qualities that there is no known way of teaching - critical thinking (60%), attention to detail (56%) and communication (46%) head the list. Technical skills that colleges are usually urged to teach are seldom reported as a problem - SEO marketing and research (7%), computer programming (12%) and design (14%).

The College Competition Test

If most colleges are not delivering what employers want, we would expect to see enterprising colleges seizing the opportunity to gain a competitive advantage by refocusing on real world requirements. A course which would soon be reflected in student outcomes and so rewarded by incoming freshman. There is no sign of this happening in the higher education market though admittedly the role of economic rent in that market is high which would retard the process.

Conclusion

In 2011 68.3% of high school graduates enrolled in college, college students are no longer the "best and the brightest" but also encompass the average and somewhat below. It is inevitable then that the quality of the average graduate has declined in terms of ratiocinative horsepower but not in skills acquired.

The problem the country faces in not that graduates lack skills but rather that they have too many. The Federal Reserve Bank of New York reports "Almost half of all recent college graduates are working at jobs that don't require a bachelor's degree" and this is not because employers have mysteriously located a source of non-graduate workers who do have the required skills.