You’ve probably heard it said that the college degree is the new high school degree. This clearly means that a college degree, something that used to be held by an elite few in society is now held by about the same percentage of people who held high school degrees when the college degree was still an exclusive signal. This much is obviously, but what exactly is this phrase getting at? When it comes to the value of the college degree, why is it now equitable with the high school degree of the past?
To understand these questions, we have to understand why people pursue formal education and what this formal education is worth on the market.
If you’re a student, you’ve likely heard it said that if you don’t finish high school or college, then you’ll be stuck doing some blue collar job for the rest of your life, like working in fast food or being a truck driver or a plumber (as if these very hard-to-do and necessary jobs are somehow dishonorable?). Out of a fear of this fate and a desire to have more than this (even though many blue collar laborers make more than their college-graduate counterparts), many students go to college in hopes of getting a better job. This college degree will set you apart from the pack, you are told, and will make you an attractive candidate for a lucrative job.
How does this make you an attractive candidate to employers, though?
For employers, a college degree worked as what economists call a signaling mechanism. It showed employers that this candidate is unique and different from many of her potential competitors. This candidate has gone above and beyond what most candidates have, and has signaled herself as a potentially great employee who will go above and beyond in her work. She has something most others do not: the degree.
This paints a great and bright future for college graduates, who know they will have a leg up in the job market and can expect to be treated as such. More and more people who would have formerly gone right into the job market recognize this increased value of the degree and, with the help of other factors like easily-come-by student loans and more and more choices among colleges and universities, decide they will go to college.
Employers now start receiving more and more job applications with college degrees, to the point that the vast majority of candidates have degrees, and many from similar colleges and universities. The degree no longer shows them anything special about this candidate. It shows them this candidate can do everything that all the other candidates can.
The degree has at this point lost its signaling power, through no one person’s or group of persons’ fault. More high school graduates recognized they will lead better lives if they go to college, and more employers are faced with fewer signals to tell good candidates from the bad. What used to show a candidate to be a good candidate now shows the employer that the candidate is merely a minimally acceptable candidate — somebody who is no more special than the other candidates in the pile.
Degrees in some highly-specialized fields — like engineering, computer programming, and professional degrees (but not all professional degrees) — and degrees from ultra-elite universities maintain some of their signaling power, but even theirs is diminished by the field of minimally acceptable candidates now diluting the application pile.
More college graduates feel they have been misled when they go on the job market and find that they have to do more than just get a degree and do a few extracurriculars in college in order to get a job. They feel like they should be a good candidate since they have gone through the hoops and followed the steps society has told them to follow.
How do we fix this problem?
Job candidates need a new signaling mechanism. They need something that sets them apart from not only the high school graduates, but also the minimally acceptable college graduates.
One solution is to continue higher education and get a Master’s degree, but just like with undergraduate degree inflation, this just leads to more and more people getting Master’s degrees and the strength of the signal getting weaker and weaker. Additionally, this still does not provide employers with the ultimate signal of employment opportunity: work experience.
That’s exactly what we’re all about: both an educational experience to rival undergraduate and graduate school, and better work experience than any college internship can offer. The idea is simple: provide employers with a signal that job candidates not only can work, but can also do the deep thinking that college hopes to provide.
As more and more people pursue higher education, the value of the degree as a signal to employers gets weaker and weaker. College graduates who would have once been great candidates become minimally acceptable candidates. More and more undergraduates pursue graduate school, and those degrees weaken. The system needs a better answer.