College as a path of least resistance: why degrees continue to thrive

I saw this tweet going viral. Elon Musk has a low opinion of higher ed, particularly elite colleges:

Unless he means it’s more valuable, the fact that parents are spending so much money on admissions counseling, is evidence an elite college education is more valuable, not less. The number of slots for incoming freshmen for top-20 colleges is unchanged, while the population and demand has only swelled, so therefore a much lower acceptance rate. Harvard’s acceptance rate is just 4%, the lowest ever, and this among applicants that are already at the top of their class. At the same time, the returns on elite education have also ballooned in terms of salaries and prestige over the past few decades, so it’s understandable there is considerable competition.

Everyone wants to beat up on the elite colleges, but in a world where everything is becoming oversaturated in a race to zero, whether it’s mass-produced Ai-generated content, the cesspool of scams and fake news on social media, or floods of unpaid ‘user contributed content’, elite colleges have bucked this trend in terms of maintaining value, prestige and scarcity in otherwise uncertain or precarious economic times. Unlike having to invent a new car company or a new space company, to be successful with an elite degree all you have to do is show up and society will beat a path to your door. It’s like a shortcut or going to the front of the line at almost everything in life.

Job insecurity is a major problem. Even if real wages are rising, so is the bar for employment. Jobs that paid the equivalent of a middle class salary half a century ago either don’t exist anymore or have been outsourced for pennies on the dollar. For example, it used to be that knowing how to use HTML was good enough to make a living as a developer, but now you need to know how to build an ‘interactive application’ which involves many programming languages and entails a much greater complexity.

But in spite of the capabilities of AI and creative disruption seen elsewhere in the economy, society seems to have an insatiable demand for these sort of ’email jobs’ even if no one really understands why they exist, as the comment below describes:

These vague sort of administrative jobs in which one is a cog between the input and the ‘end product’ have proliferated over the past thirty or so years, and especially post-2008 and post-Covid. As the pandemic has shown, such jobs can be done remotely and are generally impervious to adverse economic conditions, as other sectors and jobs get decimated. The low-paid ‘essential’ workers were among the first to be either fired or had to work in conditions that exposed them to the virus, compared to the comfort and good pay of work-from-home. Why are there so many jobs that require degrees but seem to create no value? Who knows; evidently, employers seem to derive enough value from them that they persist and thrive.

Nonetheless, these jobs are one of the paths of least resistance to making it in America. In spite of wokeness and student loan debt, the college-to-career pipeline is one of the few reliable ways of entering the upper-middle-class in America that does not require either extraordinary luck, talent, family wealth, or connections. You don’t need to know Peter Thiel or get in early on the next crypto/Ai/smart-car company to achieve this more downsized but accessible version of the American dream. Moreover, elite colleges have among the most generous of financial aid.

I say instead of of blaming elite colleges, whose graduates are only a tiny minority (although they do impart a lot of influence), why not direct that anger at companies that require degrees for jobs that do not necessitate them? Or blame incentives. The federal government is lending to young people who have no credit history tens of thousands of dollars or more at competitive rates that no private lender can match, for a credential that yields a lifetime of extra earnings power that far surpasses the interest payments. Of course, a lot of people are going to take up that offer. Overall, being successful in America is hard, and there is little evidence to suggest it’s getting easier. College, for all its flaws, is one of the easier ways of doing that.