A recent episode of The Agenda, Job Creation in a Recession, discusses the present labour market participation trends and the effectiveness of government driven job creation post-economic meltdown. It was interesting to hear that people under thirty are increasingly describing themselves as “self-employed.” The panel participants speculate that this is a consequence of new graduates hanging shingles as an alternative to unemployment, or underemployment.
Don Drummond, Chief Economist with TD Bank Financial Group, cites statistics that young people entering careers during recessions start at lower wages, and continue to receive less money over their career trajectories. Peter Coy, author of a recent Business Week article on what’s being dubbed a “Lost Generation” calls this post-graduate purgatory of underemployment or unemployment “scarring,” and states that it has long term negative effects on work.
Even more disturbing on the Agenda episode, given Stats Canada’s recent report on rising student debt, was the suggestion by a couple of the panel’s members that staying in school longer was the best strategy for riding out the recession. Can further credential inflation be far off? It only makes sense that a surge of graduate level credentials in the market will water down their value.
For some years now, expanding higher education has been treated as a panacea for social and economic inequality. Few, it seems are willing to state the obvious: credentials decrease in value when too many educated young people are chasing too few jobs. Perhaps the price of staying in the education game is still lower, overall, than the price of getting out, but there is a price either way.
Perhaps I am too pessimistic, but remain frustrated that post-secondary education is enthusiastically expanded with near-zero accompanying planning for effective labour market planning, growth and transitions. The result? PSE warehouses our youth, while we collectively fail to address the disparities of the “new economy.”