Rethinking the Value Proposition of College Education in a Changing World
To my partners,
I recently read a news article published by Barron’s: It’s a Bleak Job Market for New College Grads. These are the Unluckiest. The title is self explanatory and it is a quick read for those in a hurry – I highly recommend taking a look! Despite the short length, the content is remarkably captivating.
As I reflect specifically on the job market affecting recent college graduates, I am reminded of just how intimate this topic really is. At the end of the day, they are young adults (the future of America’s workforce) who will inevitably be faced with, perhaps, their first true life challenge. This is precisely why I believe it is an issue worthy of outsize attention.
The most glaring statistic stated, “For the first time since 1980, recent and new college grads have a higher unemployment rate than the national average—close to 6% versus the national average of 4.2%, according to Oxford Economics. Typically, college graduates fare better than the average employee, especially during downturns. But that isn’t the case for 22- to 27-year-olds this year.” What stands out is the total contradiction of the scenario! Isn’t the main point of obtaining a higher education to be more competitive as you enter the labor force? Shouldn’t your advanced education allow you greater opportunity to be employed, not unemployed? How can it be that someone commits 4 full years (usually) of their lifetime, dedicated specifically to a particular subject, only to reduce their odds of finding a job? Of course my commentary is minorly subjective and I can poke holes in the argument as I write – the jobs a highschool grad would obtain are more likely to be lesser paying and lower quality, the subjects students study in college are often not correlated with the job field they end up working in, a larger majority of college students are competing for the top 1% of high paying jobs thus reducing their chances of employment and raising the overall unemployment rate, etc etc etc. However, despite the nuances and case-by-case complexities, I find it difficult to accept the underlying truth in the over-abundance of college diplomas and in turn reduced efficacy of college education. It feels like a balance sheet that doesn’t balance – I outlay tens of thousands, in some cases, hundreds of thousands of dollars, to attend college and receive a degree that does not increase my chances of capturing greater earning power/value than when I initially outlayed the money. This does not even take into account the time invested (or wasted) into the education.
Despite my disappointment in educational institutions (increasing attendance costs while producing a lower quality service), the overall economy, politicians (federal & state), and financial institutions, I cast a fair amount of the blame onto the young adults/graduates themselves and the influential people that may be in their lives (parents, mentors, teachers) portraying unrealistic expectations.
At some point, young adults need to grasp the severity of the situation. Undertaking large amounts of debt to attend schooling that is consistently proving to offer no upside value is like being buried under a mountain filled with debt/responsibility/time, with only a spoon to dig out. You are swimming against the tide, not with it. Couple large amounts of student loan debt with the integration of Artificial Intelligence over all aspects of company operations, and the future outlook appears even more grim. Barron's article should serve as additional proof that this will not just be a cyclical situation. As the landscape evolves, I predict education's strategic value diminishing further, making it increasingly challenging to leverage knowledge as a competitive differentiator. While educational institutions play a vital role in fostering essential skills and knowledge, I firmly believe that the ultimate responsibility for marketability, professional development, and employer value lies with the individual student. Institutions can provide the foundation, but it is the student's prerogative to internalize and apply these skills in a way that sets them apart in the marketplace.
Despite the challenges, my natural inclination towards optimism (perhaps to my detriment) leads me to believe that the next 5-10 years present a transformative opportunity for young adults to reshape the narrative around the skills and competencies that drive employer demand. The near future may potentially trigger a seismic shift in the way we approach talent acquisition and development. As General Partner operating Time Horizon LP, I am wildly interested in how our young labor force adapts to the evolving dynamics. As we navigate the complexities of capital stewardship, I'm continually reflecting on the essential qualities required of future leaders entrusted with overseeing your assets. Identifying and assessing these characteristics in potential candidates is a daunting task, particularly given the immense responsibility that comes with leadership roles. By engaging in these discussions proactively, I hope we can better prepare ourselves to address the challenges that lie ahead, ultimately strengthening our organization's resilience in the face of an evolving workforce landscape. Thank you for reading!
Kyle Delmendo
Founder, General Partner, CIO