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The student loan crisis is really an underemployment catastrophe

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Re: The student loan crisis is really an underemployment catastrophe

#301

Earlier quoted context omitted.

I know that for my most recent vehicle purchase (paid cash, no loan) the dealer left their own anti-theft device installed. From what I could gather online, they use them for anti-theft on the lot and then can try to upsell you on a service that uses the same hardware during the sale. It's wired directly into the ignition system. Despite having a computer engineering degree and enough experience to be reasonably conf…

If you're smart and capable enough to reverse engineer the device, there's a 95% chance you're smart and capable enough to have a job that pays enough to not need ultra high-interest car loans.

It doesn’t take many people to know this to serve an entire community. The problem is likely that the terms of the loan are such that the car still gets repo’d, just at a lower frequency and higher cost.

Re: The student loan crisis is really an underemployment catastrophe

#302

Earlier quoted context omitted.

Materials sure, but what do you mean labor? He is the labor, he gets the money.

There's more to running a plumbing company that just the person who shows up at the job site. Plus, plumbing isn't a one-person job. Every plumber has helper/apprentices, etc.

How is that different from when I take on contract tech work and farm out some of the work. everyone has these types of problems when they are sole proprietors.

Re: The student loan crisis is really an underemployment catastrophe

#303

Earlier quoted context omitted.

My gut reaction to this claim is always that it seems wrong; that the metric we're using to measure productivity must be missing a big part of the story. Why is that reaction wrong?

Lots of people make that argument, but when asked "What are we under counting?" no one's been able to come up with a story that remains consistent when applied to multiple industries. Computers got much, much faster, but everything else stagnated. It's fairly easy to measure how much money is produced per employee. That number grew 3% to 4% a year for most of the 20th Century, till 1973, when it collapsed. Since then…

What's the starting time for that series? Early 1900s (say WW1), or back in the 1800s?

I've got an alternate explanation for the grandparent: the economy is undergoing a phase change from an industrial economy to an information economy, which will bring with it different assumptions about what an economy is. A future historian looking back on us from a century later will see steady growth in whatever metric they measure the economy in (likely volume of data produced) since about the 1970s. The fact that large sectors of the economy have shown negative productivity growth will drop out of the history books, because neither these non-software industries nor productivity as a concept will seem important to this historian.

I'm basing this on a thought experiment: what does the last major phase change in the economy (from largely subsistence-based agriculture to industrialization) look like now, and how do the metrics by which we judge it differ. The concept of productivity is basically nonsensical in a pre-industrial agricultural society - crop yields, of course, depend upon the wind, rain, and weather, and why would we expect them to increase in any non-random fashion? But real agricultural wages (likely a good proxy for productivity) skyrocketed between 1790 and 1810, and then declined by 20% [1, p 20] between then and 1850. To a farmer (that's most of society back then), their plight wouldn't look all that different from today's factory workers: the generation that came of age in 1850 did significantly worse than that of 1810. There was a bit of a bump when mechanized agriculture and meatpacking came out in the early 1900s, but this trend largely continued into the 1930s, at which point we basically stopped talking about small family farmers and got agribusiness instead.

But do we consider the 1800s a time of low productivity? No. We associate them now with the first and second industrial revolutions, which dramatically changed society and hugely increased productivity. "Industry" initially meant "the textile industry", because that was the first area that mass-production techniques were applied to. Over time these techniques spread until they took over the whole economy, at which point we could start measuring the economy by metrics like "productivity" that assume that innovation and capital can allow an individual worker to produce more than they could before. Former metrics like crop yields become an afterthought: as long as they're "enough", who cares?

If you start the clock at 1910 or even at 1870, you're looking only at the portion of history where the industrial economy is the economy. To get a better analogy to current conditions, you have to go back, before the Civil War, when the nascent industrial revolution is causing the collapse of plantations, slavery, seamstresses, tailors, whalers, and small farmers.

[1] http://old.econ.ucdavis.edu/faculty/gclark/papers/farm_wages...

Re: The student loan crisis is really an underemployment catastrophe

#304
post #111

Earlier quoted context omitted.

Buying new is basically a fools game now. Take note of vehicles with proven longevity and snatch them up when the depreciation makes them affordable.

The market is rather efficient in these vehicles, so depreciation isn't a way to save money. Dealers beg 3-yr-old car owners to sell their cars back so they can flip them. Like real estate, cars are cheap to buy. The expense comes when you sell them, losingthe residual becase you won't get a good price. The most important factor in auto afforidability is how long you own the car , not how good a deal you get at purch…

You can pretty blindly buy a no-accident 3-year off/lease Honda or Toyota and be overwhelmingly likely to have a great ownership experience.

Re: The student loan crisis is really an underemployment catastrophe

#305
post #16

Earlier quoted context omitted.

With GPS/always on mobile data connections, the lender has a much easier time reclaiming the collateral and recouping their losses by selling or leasing it again.

I can absolutely confirm this. I have done work (not on this particular type of system, however) for many small-to-medium car dealerships, and they will spend roughly $400 to equip many of the vehicles in their inventory with ignition interlocks that can be disabled remotely. Here is their business cycle: 1. Purchase a used car from a customer for 80% of "fair market value." 2. Sell the car on a $0-down, 7-year note…

If you are interested in great (and humorous) investigative journalism on this, see this piece: https://www.youtube.com/watch?v=4U2eDJnwz_s

Re: The student loan crisis is really an underemployment catastrophe

#306

Earlier quoted context omitted.

With the rate at which electronic safety features are advancing, I think the advantages of buying used have fallen a bit. A new base-model Corolla currently has more electronic safety features than a high-trim 3-4 year old Avalon or Lexus. That's a recent phenomenon, though, and it might be a temporary condition if the rate of improvement of those systems slows down.

How did everybody manage to convince themselves that they need these expensive add-ons? You need seatbelts, airbags, and impact absorption. That was perfected 20 years ago. Everything else is a luxury not needed for driving.

I’d add ABS (also readily avail though not standard 20 years ago) and side airbags (very uncommon 20 years ago) to the list.

Most people are pretty poorly trained and now, often distracted, drivers.

Re: The student loan crisis is really an underemployment catastrophe

#307

It's such a shame that the state can't support the education system financially, so that 20-year old people wouldn't have to take loans to study. It works in other countries, so why not in the US?

The simple and honest answer to your question is greed. The fact is that the USA has more than enough money to support a healthy and well-educated population through government-funded healthcare and education (including what you asked about - higher education), but the capture of significant portions of our government by corporate interests has successfully stopped that kind of progress from occurring so that an ever…

It might be more nefarious -- to essentially maintain a permanent underclass of society with just broad strokes.

Re: The student loan crisis is really an underemployment catastrophe

#308

Earlier quoted context omitted.

Both of these are ludicrous. The salaries for my school are public, they are for all public schools (that I've looked at at least). I can tell you from the data from my school the administrative costs have gone up substantially. Both from number of administrators increasing significantly. The average administrative staff wage is over 250k (I know that's not a lot in tech salaries, but that is HUGE where I am. Cost of…

> The average administrative staff wage is over 250k ( This is a big salary even in SF. What average admin staff is that?

University. That is the average of our university's admin salary. I don't know the median, so that could be pushed by a few high earners. But given the president's salary it looks like there are quite a few high earners.

Re: The student loan crisis is really an underemployment catastrophe

#309

Earlier quoted context omitted.

> More importantly, the data reject the bloat theory. Figure 8 shows spending shares in higher education. Contrary to the bloat theory, the administrative share of spending has not increased much in over thirty years. The research share, where you might expect to find higher lab costs, has fluctuated a little but also hasn’t risen much. The plant share which is where you might expect to find lazy rivers has even gone…

Both of these are ludicrous. The salaries for my school are public, they are for all public schools (that I've looked at at least). I can tell you from the data from my school the administrative costs have gone up substantially. Both from number of administrators increasing significantly. The average administrative staff wage is over 250k (I know that's not a lot in tech salaries, but that is HUGE where I am. Cost of…

What percentage of the total budget of your school is being spent on each of overpaid administrators and underpaid faculty? (I honestly don't have any expectation as to what the answer to this question might be, but it seems much more important an analysis than the average salary of a given position.)

Re: The student loan crisis is really an underemployment catastrophe

#310

I'm not sure the author's suggestion that potential students be diverted to trades/coding bootcampts etc., will solve too much, and instead may simply shift the problem into those trade industries as well. Somewhere in the ballpark of 2,000,000 students earn a bachelors degree each year. Let's say 25% of students should be diverted into trade schools instead. That will mean an additional 500,000 student per year ente…

We just need to reduce or eliminate government backed student loans and the problem will take care of itself. This "crisis" is almost a replay of the housing crisis we just had, government backed loans encourage lenders to lend out money to people who are not qualified for the loan. It doesn't make sense to keep loaning out tens of thousands of dollars to 18 year old kids that have no income [yet] and no real plan to…

this but you also have to have affordable education because it's the most reliable, predictable and virtuous of all class mobility mechanisms, and trade school don't provide that for the most part because those are optimized to make corporate drones, not self thinking individuals
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