Wednesday, July 04, 2007

Education and External Rewards

The Times ran a story in the business section that is a gentler version of the same old rap: baby boomer educators/ managers think that Millennials have a crappy work ethic.

Reading it with my Gen-Debt eyes, I wondered if the increased financial pressures placed on college students today, and the conservative attitude toward education policy, are actually twisting young peoples' attitudes toward work and education.

"Even in college, students seem to value the external rewards of work over learning for its own sake. A 2006 survey of college freshman at the University of California, Los Angeles, found that about 74 percent of men and 70 percent of women say that the primary reason they attend college is to make more money. "

Well, they're just being little Reaganites, or little economists. If they get little or no grant aid to attend college and must take out loans just as though they were buying a car or a house, while being told all the time that college is a private investment that is their only way to make it into the middle class, why shouldn't they believe that that is the primary value of college?

"Students tend to take an industrial view of work. They commonly contest a grade by saying they deserve a higher one because they put so much time into studying or writing a paper."

Well, about half of full time college students and 85 percent of part time college students are working, a pursuit where they do get paid by the hour. This represents a large increase over the 1970s. It's only natural to compare the immediate rewards of even a low-paying job to the often vague long term rewards of a class, particularly when that class is a cattle-call lecture taught by a phoning-it-in professor, or a part-time adjunct.

I don't think this attitude is great news, and I don't think it's completely prevalent among young workers. In fact, I think there's an incredible resistant strain of idealism that leads tons of young people to seek intrinsically fulfilling work despite economic pressures. But if you load college with high costs and instrumental expectations it's only natural that students would absorb the attitude that it's all about the money.
And another thing. Today's college students are digital natives who live in an era where nearly all the world's information is free. The ivory tower has no monopoly on the distribution of knowledge. The basic thing college has to offer, then, besides the intangibles that we all love to rhapsodize about, is a sorting function and a valuable credential. If the credential can't be redeemed for at least what you paid for it, what's the point?

19 comments:

Stephen said...

Hi Anya. Keep providing us insights into how our society is evolving. Don't you just love it when people who spend their time in air conditioned offices engaged in tasks like strategic planning, quality control, performance evaluation, preparing financial statements and intellectual masturbation have the audacity to lecture other people about "hard work"? "Hard work" isn't determined by how early and late you start your "work" day, how many days in the week you "work", or how stressful your job is.

Hard work is determined by the amount of sweat that is required to complete a task, nothing more nothing less, something nearly all of the people managing corporate workplaces know absolutely nothing about.

Anonymous said...

"... while being told all the time that college is a private investment that is their only way to make it into the middle class, why shouldn't they believe that that is the primary value of college?"

Are you kidding me? If a private investment for education is the only way to make it into the middle class then how is it that the middle class is larger than the pool of college graduates?

I'm not a college grad and yet I've found a way to find myself into a 150k / year job through hard work, determination and not taking "no" for an answer. Those opportunities exist all over the place, especially in the SMB space and the technology field.

This statement you made I completely agree with "The basic thing college has to offer, then, besides the intangibles that we all love to rhapsodize about, is a sorting function and a valuable credential. If the credential can't be redeemed for at least what you paid for it, what's the point?"

So, with that in mind, how does that credential become more substantial if the government becomes more involved from a financial perspective? -- The obvious answer is that it will enable students entering college to not have to be riddled with debt once they have their token diploma... And that is the paradox, it then becomes a token piece of paper than any Joe six pack can obtain because once you introduce free or nearly free education then you have removed the value to those who have paid for this education themselves, learned something from it and benefit from it.

It quickly becomes socialized education and if the world has not yet learned that socialism in any arena, especially education, healthcare and the market place is completely broken then shame on us.

One of the things that has made this Country great and that other countries are learning is that the free market drives other freedoms that allow for the population to be engaged, motivated and challenged to be all that they can be and go out and EARN the American Dream.

If you begin this process by handing them a diploma that has even less meaning that it does today; and it surely would if the Fed govt. got more involved, then you would yet again increase the sense of entitlement that is already an issue in this country.

The solution to fixing education in America is to increase the costs to provide significantly higher salaries to those in the teaching field and actually get some teachers who are not only capable to survive but thrive in Corporate America. Once that has been established, then higher education and the success therein really begins to provide some value to the student and society as a whole.

Anonymous said...

Please. This is a much bigger problem than you guys think. At this point, you have no idea.

Please, read "Goodbye America!" by Michael Rowbotham. Start from Chapter 7 or 8, but it's a short and an easy book to read.

At least, please read the reviews of the book at Amazon.

If you don't like to read. Please, watch "The Money Masters" DVD by Bill Still.

These will help you identify the root cause. It is the best kept secret.

Good Luck

Anonymous said...

Hi,

As a full time student AND worker (40+) hours a week, I can appreciate your argument. From someone who is racking up student loans faster than anything it's only natural to see money as a motivating factor. We would like to pay these debts off before we die so that we can attain the middle class dream...at least. Sometimes I feel like my dog, seeing it chase it's own tail to no avail. Keep up the great work.

Bob said...

I'm a bankruptcy lawyer who read your book over the holiday--and I should probably mention that I used to work for Newt Gingrich and would still support him as a new ideas candidate for president.

You explained something I've seen this year--never before--and didn't know where it is coming from. I'm putting young people into five year chapter 13 payment plans to keep the student loans at bay. (Especially those new not guaranteed higher interest, unreasonable student loans.) At the end of five years, they will owe far more than they do today; and I think they will do another Chapter 13 and then I guess another. Until they are at the end of their working life and maybe we can persuade the courts that it would be an "undue hardship" not to allow the student loans to be discharged.

I HATE recommending this to people, but its a survival strategy for people who seem to have no better choice.

The very first new client I've seen since reading your book is a perfect example of what you are talking about and that persuaded me to write. Single mom, tech person for a non-tech company, making $63,000--over $100,000 in student loans. Says she could have gotten the same job doing the same thing at the same pay with a community college two year degree. Her parents pushed her into a four year program that's left her in an impossible debt situation.

You are really onto something. Layoffs and medical problems still bring me most bankruptcy clients--but I'm seeing more and more young people who just can't make those student loan payments.

And I'm ANGRY that the Oct 2005 BK reform bill added those for-profit student loans to the non-dischargeable list. There is no public policy basis for that at all; I have to share your suspicion that was a direct result of Sallie Mae's "donations" to Rep. John Boehner, Republican Leader in the House of Representatives.

Robert R Weed

Anonymous said...

"Sometimes I feel like my dog, seeing it chase it's own tail to no avail."

You are exactly correct. Understand how money is created and you will understand why we can never pay off our debt.

Again, you are exactly correct when you said, "Sometimes I feel like my dog, seeing it chase it's own tail to no avail."

Learn how the monetary system works to understand why what you said is exactly correct. You will be very surprised.

Anonymous said...

Bob,

This is nothing new. It has been going on for generations in other parts of the world. It has been going on in the U.S., but the effects are more pronouced today and it will get much worse.

This has been discussed over and over for generations and there are many good books, but none made any significant difference. Sorry to say, but it is likely that Anya will be just like people before her.

The knowledge and the wisdom of people who created the monetary system were at least 100 years ahead of ours.

There were many people before Anya who correctly pointed to the root cause of the problem. Nevertheless, they could not change the situation. Read the works of people before you or Anya and others will simply be as ineffective as the people before her.

Good Luck, your generation probably is the last hope that we have. There were people in every generation who fought this battle and none was able to win. The odds are significantly against you.

Anonymous said...

I like the article. Unfortunately, these comments make me think their various authors should dig a hole, jump in, and pull the dirt in after them.

Personal finance is common sense and some basic math. If the upper crust of society paints you into a corner, take back your government or emigrate. That is how many of us got here in the first place. Try New Zealand. I hear it is a nice place.

If not, get extreme with your finances. Live in a tent or a squat for a few years while working and spending very little. I did. It worked.

Anonymous said...

"If not, get extreme with your finances. Live in a tent or a squat for a few years while working and spending very little. I did. It worked."

This does not work for everyone not because individuals are different, but because under the current monetary system, the economy will stop functioning if everyone did this.

Under the current monetary system, the debt level must continously increase. The increased debt level first creates major problems in poor countires and among poor people, and the process is very slow (takes generations), but now it started to affect the U.S. in a very significant way and it will continuse because the debt must increase under the current monetary system. Again, this has been going on for generations.

Anonymous said...

Just get some idea how long this has been going on...

http://www.themoneymasters.com/quotations.htm

Anonymous said...

I read all the comments and am totally confused and I'm a college graduate. I have two sons, one an insurance agent who didn't need a college degree to become licensed and one a college student who works 40 hours a week and attends college as a full time student.

The insurance agent makes more than the college student and probably will continue to do so because of his profession. The college student will graduate with a degree in finance and hopes to work for a hedge fund.

On its face, the hedge fund should pay better but will it? No one knows the answer but the surmise is that it will. Of course he has to be hired first, right?

Let's say he isn't hired. What does he do? Sell insurance? Maybe, maybe not. How many plumbers, electricians, appliance repair people do you know with college degrees?

How many of the said same have stifling college loans to repay? I'd bet if someone took a serious look at the trades before they entered college, college would not have that someone in their hallowed halls.

Why? Because all of us who need the services of trades people don't ask them if they have a degree, we ask them how soon can they come and fix our problem(s).

You don't need a college degree to be an author, an Internet marketer, a journalist, a small business person, etc. etc. etc.

Me thinks we are putting too much emphasis on college. Oh, for those who are wondering how much debt my college son has accumulated - none. He worked the grant system until they paid for his entire education minus a few books.

So, I know it can be done because I watched him do it. I wonder why others aren't doing at least de minimis when it comes to hustling grants. Government money wants to be gotten - go get it.

Should anyone need help fighting the debt collector I am available. BTW, you don't need a college degree for that either.

Anonymous said...

A college education has become de-valued because the government has over emphasized and subsidized it. It does not take "hard work" to get an undergraduate degree; hence, an undergraduate degree is the new high school diploma. Any Joe six-pack can already earn a degree. I understand that an educated society does increase the productivity of a nation; however, education does not need to be obtained in the formal manner.

Yes, the college loan debacle is a problem. Instead of seeing this as a problem for regulators to fix, we should let the free market do its magic. That's the beauty of the free market: it exposes the liars, cheats, and scam artists. Then the collective demanders take thier business to worthy suppliers.

I can't agree that increasing the costs of education by paying teachers more will solve the problem. A lot of teachers teach because of the intrinsic rewards. The problem needs to be solved stopping the flow of taxpayer's money to people who don't really want to be in college but are simply there because it's cheap. By cheap I mean that people do not have to pay the full cost, except for those financing the whole thing. But the very fact that people have taken out such ridiculous loans means that they value the education and, therefore, should be the ones attending. I concede that a few will suffer, but the great many will gain.

I am both a full-time college student and a military veteran. I use the GI bill for living expenses; and, before you start arguing that the GI Bill is subsidized, take note that the people who fund it are the people who use it: military members. I didn't get the money for free either, I (albiet willingly) give up 6.5 years of my life.

["If not, get extreme with your finances. Live in a tent or a squat for a few years while working and spending very little. I did. It worked."

This does not work for everyone not because individuals are different, but because under the current monetary system, the economy will stop functioning if everyone did this.]

Again, if we are faced with these kinds of problems, when the economy stops functioning, that is because people have made a collecitve choice and the free market is working. That probably sounds horrible, but that's what we're unknowingly building ourselves up for and economy that stops functioning.

I will graduate in November debt free. -E

Anonymous said...

Just in case there is someone out there who is intelligent enough to be able to connect the dots, I'll give you this link below. Listen to it.

How does this have anything to do with Generation Debt? A lot. Unfortunately, most of you won't be able to figure this out even if I explained, so I won't. But, I think that some people can without any further explanations.

http://www.financialsense.com/Experts/2005/Perkins.html

Brand said...

Referring to the original article, what point is Professor Joanne B. Ciulla actually making? In contrast, I offer my observations as a 31 year-old engineer working in high tech product development.

Colleges are hopelessly out of date with respect to truly training people. Universities are academic fantasy lands that graduate people versed in only theory. Because honestly, that's really all that most professors know. In the real world, everything depends on your team. If for some reason you fail at your assignment, you MUST have the attitude of taking another shot at it. There are no arbitrary cutoffs on real-world projects, nor will you receive partial credit. If the deadline passes, you keep plugging away until you get that product out the door, because your customer isn't going to give you a B- (and 80% of the money) for code that doesn't compile.

Clock punching... yeah, I'll put those words of wisdom on a Post-It Note right next to my red Swingline stapler. Clock punching isn't something that employees invented. Yeesh. Management breaks down our time in engineering days, assuming exactly 8 hours per day. My company doesn't want people working over 10 hours per day for any extended period. Why? Because that's a good way to burn out talented engineers. Working long hours causes strain on your family relationships and slowly degrades your perspective. Clock punching is perfectly acceptable if you're in a pay-for-results environment. It doesn't matter if it takes you 50 hours or 10 hours per week if you are judged only on results. If you are working less than 40 hours per week, then your boss needs to assign you more stuff (hence more results, a better review, raises and options, etc.). I've watched plenty of Baby Boomers finish their precise 9 hour day by playing Solitaire or Minesweeper for 45 minutes. Many arrive at work at exactly 7 a.m., only to read Dilbert and drink coffee for an hour until their first meeting. What's the point in that? Go work out, beat the traffic, see your kids, take a walk! Working exactly 50 hours per week isn't "paying your dues" because any idiot can burn time. If I can come in focused and get my part working in 6 hours, why should I waste another 3 hours staring at my cubicle walls?

Silly, silly boomers... you're going to talk to us young bucks about entitlement? Since when have you been entitled to make the rules? Is it just because you're older? :o

Anonymous said...

"Again, if we are faced with these kinds of problems, when the economy stops functioning, that is because people have made a collecitve choice and the free market is working. That probably sounds horrible, but that's what we're unknowingly building ourselves up for and economy that stops functioning."

NO, NO, NO. You just don't have the knowledge of how money is created. Please, explain this to me. How does money come to an existance?

Anonymous said...

Hey brand,

Do you know why your or anyone's (even Anya's) hard work is eventually enticing others to go into debt?

Anonymous said...

A bed time story:

Once upon a time, there was a country and there were a central bank and member banks in the country. In this country, the only way to create money was to borrow from these banks and the banks charged interests on the money they lent.

One day, John who lived in this country had a great business idea, so he borrowed money from one of the banks and built a great business that produced great products.

Unfortunately, no one else in the country had any money to buy John's products.

Luckly, Mary came up with a great idea of new products, and Mary needed to use John's products to build these great new products. So, Mary borrowed money from a bank and bought John's products and created really great new products.

Lucky for John, he now had money, but the problem was that he needed more to pay back not only the principal but the interests on the money that he borrowed. So, he worked really hard and created even greater products, so that Mary and perhaps others would borrow more money from banks to buy his products.

Mary also worked really hard to produce great products, so that someone would borrow money from a bank to buy her great new products.

And someone did. He borrowed money and built a new business and hired many people. He used the money he borrowed to pay these people and these people bought Mary's products.

They all worked really hard and more and more people borrowed, built and bought. Many people borrowed money to get higher educations, so that they could produce even better products and more people borrowed to buy the better products. The country prospered with its strong economy, or at least so it appeared, but the people were deep in debt, so they worked even harder and they went even deeper in debt.

Then, one day, they all got tired and they all wanted to pay off the debt, but the problem was that if they paid off the debt, there would be no more money in the economy and the economy would ceased to function. In fact, this was an economy that required more people to borrow more money to function smoothly.

What was the problem of this country? How did the banks created the money that they lent in the first place?

Well, it's time to go bed...

Anonymous said...

How money is created:

People wanted to barter with their goods and services but they faced a couple problems: indivisibility and coincidence of wants.

So people started trading one commodity(maybe butter, which could be cut into smaller parts)that they new everyone needed or used for other goods. Eventually society(ies) decided that gold and/or silver was the best commodity to serve as the medium of exchange. Soon it became dangerous to carry around gold, so they gave the money to a goldsmith who in-turn gave out receipts with claims on said gold. People found out that trading these notes was much easier and safer than actually exchanging gold so they just left the gold with the goldsmith. Now we have paper money.

Here's where the problems start:

The goldsmith notices that people just leave the gold in the vault for long periods of time so he/she decides to lend the gold out to someone else for a fee. Now there are two or more people with claims on the same gold.

Jump to modern America:

The Federal Reserve prints money basically whenever it feels like. It distributes this money in a few ways, but mainly through the purchase of US Treasury Bonds. The money the fed printed to buy the bonds goes out and gets deposited in another bank. That bank doesn't want to hold all the money so it lends or spends (on financial securities) most of the money, not exceeding 90%. The receiver of this money spends on whatever is trendy, and the money ends up in another bank. Again, the money is lent or spent not to exceed 90% of the deposit. Over and over this happens.

Money is created in the United States simply because the Fed prints it. After that, it's the damn fractional banking system that multiplies the money by giving possibly thousands of people a claim on the same money.

This is how money is comes into being in the United States. It's true that if hoards of people start paying back all they owe and don't borrow again, the money supply will decrease. This system is dependant on ever-increasing amounts of debt which will eventually screw us all.

Anonymous said...

"Money is created in the United States simply because the Fed prints it. After that, it's the damn fractional banking system that multiplies the money by giving possibly thousands of people a claim on the same money."

One problem of your explanation is that it does not point out that the money that the Fed "prints" is lent out, not given away, and the borrower, usually the U.S. government, has to pay interests on the loan. When the Fed purchases US Treasuries, it is really that the U.S. government borrowing money from the Fed.

Also, for those who don't know, the Fed is a group of privately owned banks. The name, the Federal Reserve Bank System (A.K.A. the Fed), was chosen, so that people would not believe that this group of banks is privately owned by a group of rich families through their corporations.

Also, the name was carefully chosen to give the impression that they have reserves to back the money they lend, but they don't.