Is College Still Worth It? The New Calculus of Falling Returns [pdf] • Hacker News Board

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#191

Post by logical_proof » Sat, Dec 28, 2019, 1:11 PM UTC

ransom1538 wrote: post #67

prepend wrote: post #34

Earlier quoted context omitted.

You need some better contractors. I have multiple plumbers with same day service for $95 service calls. My garage door was installed for $400 and it took an afternoon. Obviously prices vary. I can make a living with a trade skill, but data shows I’m more likely to make a lot more with a college degree. You have billionaire dropouts and baristas with phds. But on average, degree nets you a lot of lifetime income. Mayb…

"with same day service for $95 service calls" That means they show up for $95. No work right? When they actually do something there is another charge right? Where you are? So confused.

The plumber is not making $95 an hour even if he owns the business. I worked for a contracting company and we charged $118 an hour for most service calls, our technicians ranged from $20 to $35 per hour. That looks like robbery but you factor in taxes, management, logistics, vehicle maintenance and management, rent, benefits, office staff to take calls, and you get up to that $118 very quickly. Unfortunately that’s just the nature of business in the trades.

The Guys doing the work make a fraction of the hourly rate, anywhere from 15 to 35 percent (not counting benefits). The rest goes to the house.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#192

Post by IkmoIkmo » Sat, Dec 28, 2019, 1:13 PM UTC

seem_2211 wrote: post #12

I have a degree from a no-name university in New Zealand. I'd do it again for a few pragmatic reasons. 1: Lots of companies will reject you on sight without a degree. I don't think it's a good thing, but it is reality. 2: With a degree your ability to move overseas dramatically improves. I moved to America after graduating. I flat out couldn't have done that without a degree. Points based systems immigration systems…

I'd say this is spot on, particularly the part about going to college for lifestyle reasons, combined with a field that is low-paying, and a choice of uni that isn't particularly cheap, is a bad combination.

I'm not sure I agree on grad school, perhaps you could elaborate? It's true that it's very much hit or miss. But my experience is that there's plenty of grad schools which offer 1 - 1.5 year Masters' and tuition fees that aren't abnormal. Here too your second point rings true, either you pay a lot of money for a good rep (e.g. if you go into BigLaw, assuming you don't burn out, it gives a high return rate), or you pay little for a no-name university, and then I feel grad school absolutely does come at a premium. Compared to a 3-4 year Bachelor's degree, it's usually a relatively quick program with potentially bigger upside, especially if paid for by your employer.

I think what most students underestimate is just how many of them fail to finish the standard path. Almost half of students don't finish their bachelor's within six years due to delays and changing paths, and a lot of them quit entirely. I think college makes sense if you know what you're looking to study, why, are dedicated to completing it, and able to.

A lot of students go into fields of study as a teenager, literally never having had a 5 minute conversation with a person actually working in the field, having spent no time looking at the income tables, or indeed not actually considering the field at all, but just wanting to become a college student. It's these students who probably drag down the stats quite a lot. I've seen fairly unimpressive people go into a business course, work their ass off, do various internships, and land high-paying jobs. And I've seen smart kids start the same business course, muck around, graduate after 6-7 years and land a mediocre job that doesn't really require any particular degree. At the end of the day the student is still the most important factor here, and by the time they head to college, it's often already 'too late' for institutions to turn an B student into an A student, without the intrinsic motivation. There's lots more room in primary/secondary school for that, that's really where it's at. What college you head to after is less important in my opinion.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#193

Post by emodendroket » Sat, Dec 28, 2019, 1:13 PM UTC

ransom1538 wrote: post #18

A person in our family is a specialized nurse. Two years of school, then some more training. $60hr any hour they "wish" to work. Saturdays/Sundays are $90hr, so is any hour after 8 hours. The demand is so high he just rejects work. If he wants to work in American Samoa or Miami: hired. I hired a person to install a garage door. $900 for an hour of work. My plumber wont show up for a 30 minute $300 job. I will call ag…

It seems doubtful that your guy spends 40 hrs/wk installing garage doors.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#194

Post by chrisseaton » Sat, Dec 28, 2019, 1:13 PM UTC

throwaway100773 wrote: post #188

throwno wrote: post #184

If trades make so much money, how come no one is bitching about fatcat plumbers and roofers? Why hasn't the NY Times published any articles about how "Big Plumbing is soaking the middle class" etc.? For all the ways the middle class is getting hammered, I have yet to see one book about how plumbers are killing the middle class like I have with doctors, lawyers, techbros, and bankers. Until a journalist from NY Times…

The issue is that trades don’t scale like all of the things you mention. Even if you own a very successful plumbing company, your ability to scale is constrained by geography, labor costs and finding people you can trust to manage your company. Not to mention, there are market forces working against the plumber trying to scale, and the plumber’s ability to affect policy is proportional to the ability to scale. Anecdo…

> The issue is that trades don’t scale like all of the things you mention.

The UK famously has a plumber worth $100 million - Charlie Mullins.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#195

Post by brownbat » Sat, Dec 28, 2019, 1:14 PM UTC

This is a really interesting addition to the literature if you dig through it, with subtle distinctions between income gains and wealth gains and interactions with demographics.

It's not a simple "college ain't what it used to be" story. The biggest puzzle is how to explain why recent grads still command significantly higher incomes than nongrads without accumulating significantly more wealth.

Increasing tuition is a factor, as is the declining return on capital gains over successive generations. Limited financial literacy and predatory lending seem to be hurting recent grads too.

Most notably, the inability to discharge school debt in bankruptcy since 2005 may have had strong effects.

That last legal change remains bewildering to me. You have three parties: schools, financial institutions, and teenagers. So uneducated teenagers are expected to know whether or not their choice in school, degree, expenses, and personal background will make their education worth it? When the other parties have all the data and experience? And if it turns out everybody was wrong, the now barely-employed twenty-something is least prepared to absorb the burden. More importantly, the least susceptible to incentives to improve this endemic situation for other future students. It creates a moral hazard which drives schools to overprice courses of education that are higher risk, and removes any incentive for lenders to educate borrowers on expected returns from different choices.

Policy circles are hotly debating right now how to overhaul the entire system. Maybe we should acknowledge the policy changes that helped break everything in the first place, and reverse those as soon as possible.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#196

Post by astura » Sat, Dec 28, 2019, 1:15 PM UTC

monoideism wrote: post #45

amiga_500 wrote: post #40

Earlier quoted context omitted.

UBI would just feed directly into rents because that's how prices are set. UBI would require land value tax to ensure the public value is capture for public spending. UBI alone is a land speculator wet dream and Yang is totally wrong to be pushing it without LVT. Yes in the middle of nowhere it can help, but most people are in cities and rents will rise there to current rent + UBI amount.

I agree that a significant LVT would be extremely welcome. Perhaps even more so than UBI. I'm open to suggestions, but we've passed the point we were in from 1950 to 2000 where any mediocre person could work hard and be guaranteed a middle-class life. And that's wrong, not to mention very threatening to our democracy.

>from 1950 to 2000 where any mediocre person could work hard and be guaranteed a middle-class life.

This is a fantasy.

I personally know a lot of mediocre hard working people, mostly baby boomers. None had or have a "guaranteed" middle class lifestyle, and many don't have a middle class lifestyle at all, even now. One moved to a retirement community to "retire" and had to get a job. Another is currently without heat.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#197

Post by throwaway100773 » Sat, Dec 28, 2019, 1:15 PM UTC

vonseel wrote: post #138

barry-cotter wrote: post #135

Earlier quoted context omitted.

Zuckerberg and Gates would have been elite if they’d never worked a day in their lives. Lots of people who come from money do something that doesn’t pay that well, like working in acting or the arts. Others don’t, and work as executives or found their own businesses even though there’s no danger of running out of money.

Zuckerberg and Gates would have been elite if they’d never worked a day in their lives. Perhaps it's just me, but in the Zuckerberg case specifically, I'd think quite a bit of luck and timing had to do with it. If Zuckerberg had been born 10 years later after the obvious social network ideas were already created? Or if he had gone to a no-name college (or none whatsoever) and Facebook had never taken off the way it d…

The point is that Zuck and Gates had capacity to take on risk. There’s no guarantee that their risk would have paid off, but the other side of the coin wasn’t starvation and destitution. They basically had a heads I win tails I don’t lose type of situation.

This is the big idea here - being born in the right situation gives you the ability to bear risk where a lower middle class kid can’t bear that risk because if things don’t work out, that kid is going to be homeless. When you can take a lot of risk with little downside, it almost always pays off in the long run.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#198

Post by emodendroket » Sat, Dec 28, 2019, 1:16 PM UTC

mooreds wrote: post #155

keiferski wrote: post #153

A proper title would be Is College Still Worth It [Financially]? Evaluating an education purely on economic terms is the wrong move to make, but unfortunately an increasingly common one.

What other terms should be included? I can think of a few: * Life experience * Knowledge gained * Friends made But what would you add?

I think there is a societal benefit to the average person having more education. If we're being honest, many jobs don't even require a high school education.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#199

Post by base698 » Sat, Dec 28, 2019, 1:17 PM UTC

throwno wrote: post #184

If trades make so much money, how come no one is bitching about fatcat plumbers and roofers? Why hasn't the NY Times published any articles about how "Big Plumbing is soaking the middle class" etc.? For all the ways the middle class is getting hammered, I have yet to see one book about how plumbers are killing the middle class like I have with doctors, lawyers, techbros, and bankers. Until a journalist from NY Times…

Bankers have the luxury of taking big risks with your pension fund, losing all of it and still getting their yearly bonus when market forces are unexpected.

https://www.theguardian.com/books/2018/feb/22/skin-in-the-ga...

> Bankers are in the “Bob Rubin trade”, named after the former secretary of the US Treasury, who “collected more than $120 million in compensation from Citibank in the decade preceding the banking crash of 2008. When the bank, literally insolvent, was rescued by the taxpayer, he didn’t write any cheque – he invoked uncertainty as an excuse.

I'll save the doctors, lawyers and techbros for someone else. But there are equal examples you can find.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#200

Post by anonymoushn » Sat, Dec 28, 2019, 1:19 PM UTC

tome wrote: post #178

anonymoushn wrote: post #164

Earlier quoted context omitted.

For knowledge workers who could have begun a similar career without college, the cost of the degree should also include the money they would have made by working 4 additional years at the end of their career (probably one of the highest points?)

> For intelligence workers You probably mean "knowledge workers" :)

sure fixed