4 ms·

Higher education: Is it really the next bubble?

15 points by georgecmu 16y ago

ryanjmo 16y ago
"When I put the bubble hypothesis to Norton Grubb, professor of higher education at the University of California, Berkeley, his response in an email was that the bubble hypothesis was "ridiculous". He went on: 'The problem is that there are no other routes to better occupations and higher salaries anymore, except for those who have odd skills (athletes, rock stars, starlets willing to reveal all) - which most of us don't have.'" Programing and start-up skills allow people to get better occupations and higher salaries without education. This is only going to continue to be more prevalent in the future; especially as these skills become more available to the masses through resources like HN and incubators like YC. I think education is in trouble...
- Eddk 16y ago
  Don't flatter yourself... There is a lot that goes into building an advanced economy beyond startups...Not to mention start-ups need educated workers to become successful. This whole meme about education not being necessary is utter nonsense. Only someone who has the narrowest understanding of how our world works would subscribe to such a notion... do you want "half-assed"/"Sam teach yourself aerodynamics in 21 days" engineers building your aircrafts? I don't think so.
  - georgecmu 16y ago
    do you want "half-assed"/"Sam teach yourself aerodynamics in 21 days" engineers building your aircrafts? I don't want "Sam teach yourself C/C++ in 21 days" programmers to code for me either.
- younata 16y ago
  You suffer from a common delusion here: everybody wants to program. I attend a uni where probably 75% of students are in either science or engineering, yet I still come across a lot of people who don't like coding (example: my current roommate). Just because it's becoming easier for people to learn to program doesn't mean that people want to learn it.
TomOfTTB 16y ago
What he fails to mention is that a lot of his salary statistics are self-supporting. If you have a doctorate than your primary source of employment is the education system. So it feeds back onto itself. You have people paying outrageous fees to get doctorates and then going to work for universities where they require the universities to charge even more outrageous fee to pay them. If people stop paying those fees then the salaries collapse.
- georgecmu 16y ago
  If you have a doctorate than your primary source of employment is the education system. Really? Isn't academia notorious for its low salaries? And yet, according to statistics cited, PhD command the highest salaries on average. What could possibly account for this puzzling discrepancy? Could it be that in many fields in fact it's the industry that is the primary source of employment for PhDs? If people stop paying those fees then the salaries collapse. So what self-supporting feedback system is responsible for high salaries of workers with professional degrees? EDIT: table of salaries at industrial research labs: http://www.cs.unc.edu/~azuma/IRsalary02.jpg http://www.cs.unc.edu/~azuma/IRsalary02.jpg
  - TomOfTTB 16y ago
    Academia is NOT notorius for low salaries. Your average Professor makes $108,000 per year plus generous benefits and a lifetime pension (think about that one because it means they don't have to save for their retirement which adds a lot to their bottom line) Source: http://www.bls.gov/oco/ocos066.htm http://www.bls.gov/oco/ocos066.htm As for your chart have you asked yourself who funds all those research labs? Until you know that you can't really judge either way (where I live for example most of the "private" labs are funded in part by UCLA)
    - georgecmu 16y ago
      Average _full_ professor, maybe? What percentage of PhDs make it to a full professor? What's the average salary for an average post-doc? Ultimately, research labs like Google, Microsoft Research, Boeing, Dow Chemical, or Pfizer are funded by consumers and taxpayers. Not sure what labs in your area are 'funded' by UCLA (most if not all of UCLA own labs, I'm sure, get government or private funding) -- if you can give examples, I would appreciate it. Having seen my university's financial statements, I can tell you that net tuition accounts for slightly less than 50% of our operating budget. The rest comes from external funding sources -- public and private funds. My department is fully funded from external sources and we're responsible for finding them.
MaxGabriel 16y ago
This was a pretty casual article, and the author does think the issue is exploratory, but there wasn't much depth of analysis. The graphs show only correlation between higher education and success, and if anything fit into the thesis that Thiel et al supports: people have a 'belief' in higher education (which explains the correlation--kids are told they HAVE to go to college, so the smart kids make sure they jump through all the hoops and get their degree) yet it doesn't truly educate the students in question.
- Goladus 16y ago
  I agree that there wasn't much depth of analysis. But the problem with Theil's thesis is that it doesn't really have much to do with what a bubble really is. There can be overvalued things that people believe in without it being a bubble. One of the big problems with a bubble is that it can "pop." There will be a widespread, more-or-less simultaneous realization that the core investment is worthless and the whole thing comes tumbling down at once, sending shockwaves through the whole economy. Asset freezing causes other businesses to fail, stock values plummet everywhere devouring life savings. This causes lots of harm to people and is why bubbles are scary. None of the people yammering on about a higher education bubble seem to be discussing the issue in those terms. If automobiles are overvalued and people stop buying them, there might be some pain as the market adjusts and the existing industry dies but it's not a bubble pop. It doesn't mean it's not something to analyze or worry about, the industrial revolution never "popped" and we still have the rust belt, but it's likely that throwing the word "bubble" around is just to get attention.
  - GiraffeNecktie 16y ago
    I would think a bubble requires something that can be bought and sold (gold bars, equity, tulip bulbs, condos in Shanghai). You buy it with the expectation that you can resell it for a higher price. Or, more to the point, you accumulate and hoard beyond what is sane or reasonable in the expectation of higher prices. For any given individual its difficult or impossible to say what the real value of an education is going to be in the future. Even if there are no prospects for someone with a degree in linguistics today, it doesn't mean that the degree doesn't open a door tomorrow, perhaps in a related field.

15 points by georgecmu 16y ago

"When I put the bubble hypothesis to Norton Grubb, professor of higher education at the University of California, Berkeley, his response in an email was that the bubble hypothesis was "ridiculous". He went on: 'The problem is that there are no other routes to better occupations and higher salaries anymore, except for those who have odd skills (athletes, rock stars, starlets willing to reveal all) - which most of us don't have.'" Programing and start-up skills allow people to get better occupations and higher salaries without education. This is only going to continue to be more prevalent in the future; especially as these skills become more available to the masses through resources like HN and incubators like YC. I think education is in trouble...

Eddk 16y ago
Don't flatter yourself... There is a lot that goes into building an advanced economy beyond startups...Not to mention start-ups need educated workers to become successful. This whole meme about education not being necessary is utter nonsense. Only someone who has the narrowest understanding of how our world works would subscribe to such a notion... do you want "half-assed"/"Sam teach yourself aerodynamics in 21 days" engineers building your aircrafts? I don't think so.
- georgecmu 16y ago
  do you want "half-assed"/"Sam teach yourself aerodynamics in 21 days" engineers building your aircrafts? I don't want "Sam teach yourself C/C++ in 21 days" programmers to code for me either.
younata 16y ago
You suffer from a common delusion here: everybody wants to program. I attend a uni where probably 75% of students are in either science or engineering, yet I still come across a lot of people who don't like coding (example: my current roommate). Just because it's becoming easier for people to learn to program doesn't mean that people want to learn it.

TomOfTTB 16y ago

What he fails to mention is that a lot of his salary statistics are self-supporting. If you have a doctorate than your primary source of employment is the education system. So it feeds back onto itself. You have people paying outrageous fees to get doctorates and then going to work for universities where they require the universities to charge even more outrageous fee to pay them. If people stop paying those fees then the salaries collapse.

georgecmu 16y ago
If you have a doctorate than your primary source of employment is the education system. Really? Isn't academia notorious for its low salaries? And yet, according to statistics cited, PhD command the highest salaries on average. What could possibly account for this puzzling discrepancy? Could it be that in many fields in fact it's the industry that is the primary source of employment for PhDs? If people stop paying those fees then the salaries collapse. So what self-supporting feedback system is responsible for high salaries of workers with professional degrees? EDIT: table of salaries at industrial research labs: http://www.cs.unc.edu/~azuma/IRsalary02.jpg http://www.cs.unc.edu/~azuma/IRsalary02.jpg
- TomOfTTB 16y ago
  Academia is NOT notorius for low salaries. Your average Professor makes $108,000 per year plus generous benefits and a lifetime pension (think about that one because it means they don't have to save for their retirement which adds a lot to their bottom line) Source: http://www.bls.gov/oco/ocos066.htm http://www.bls.gov/oco/ocos066.htm As for your chart have you asked yourself who funds all those research labs? Until you know that you can't really judge either way (where I live for example most of the "private" labs are funded in part by UCLA)
  - georgecmu 16y ago
    Average _full_ professor, maybe? What percentage of PhDs make it to a full professor? What's the average salary for an average post-doc? Ultimately, research labs like Google, Microsoft Research, Boeing, Dow Chemical, or Pfizer are funded by consumers and taxpayers. Not sure what labs in your area are 'funded' by UCLA (most if not all of UCLA own labs, I'm sure, get government or private funding) -- if you can give examples, I would appreciate it. Having seen my university's financial statements, I can tell you that net tuition accounts for slightly less than 50% of our operating budget. The rest comes from external funding sources -- public and private funds. My department is fully funded from external sources and we're responsible for finding them.

MaxGabriel 16y ago

This was a pretty casual article, and the author does think the issue is exploratory, but there wasn't much depth of analysis. The graphs show only correlation between higher education and success, and if anything fit into the thesis that Thiel et al supports: people have a 'belief' in higher education (which explains the correlation--kids are told they HAVE to go to college, so the smart kids make sure they jump through all the hoops and get their degree) yet it doesn't truly educate the students in question.

Goladus 16y ago
I agree that there wasn't much depth of analysis. But the problem with Theil's thesis is that it doesn't really have much to do with what a bubble really is. There can be overvalued things that people believe in without it being a bubble. One of the big problems with a bubble is that it can "pop." There will be a widespread, more-or-less simultaneous realization that the core investment is worthless and the whole thing comes tumbling down at once, sending shockwaves through the whole economy. Asset freezing causes other businesses to fail, stock values plummet everywhere devouring life savings. This causes lots of harm to people and is why bubbles are scary. None of the people yammering on about a higher education bubble seem to be discussing the issue in those terms. If automobiles are overvalued and people stop buying them, there might be some pain as the market adjusts and the existing industry dies but it's not a bubble pop. It doesn't mean it's not something to analyze or worry about, the industrial revolution never "popped" and we still have the rust belt, but it's likely that throwing the word "bubble" around is just to get attention.
- GiraffeNecktie 16y ago
  I would think a bubble requires something that can be bought and sold (gold bars, equity, tulip bulbs, condos in Shanghai). You buy it with the expectation that you can resell it for a higher price. Or, more to the point, you accumulate and hoard beyond what is sane or reasonable in the expectation of higher prices. For any given individual its difficult or impossible to say what the real value of an education is going to be in the future. Even if there are no prospects for someone with a degree in linguistics today, it doesn't mean that the degree doesn't open a door tomorrow, perhaps in a related field.