Sentences to ponder, job market edition

Surrounded by labor history and anarchy books, thrift-store furniture and a male pet rabbit named Mrs. Crackers, Katchpole noticed an e-mail from an outfit called SumOfUs and read it aloud…

She has heavy student debt and does not know how to pay it back; in the meantime she has become an activist against Bank of America’s proposed debit card fee.  She doesn’t have a full-time steady job and her story is here.

She majored in art and architectural history and spent her summers interning at art museums.  Here is more:

She and her boyfriend — a law firm paralegal working against the proposed AT&T and T-Mobile merger — spend their days living frugally. They have no television or car. They rarely eat out. They just bought a tub of 48 random beers for $15 at a grocery store.

She has sent job applications to Planned Parenthood, the Center for American Progress and SEIU but has heard nothing. She is fretting that a grace period for her student loans ends in December.

I should stress that I am sympathetic with some of her choices (not the tub of beer), and you can read this as reflecting some strengths of American higher education.  Still, not all liberal arts students have her organizational and media talents, and this kind of story goes a long way toward explaining the current job market malaise for the young.  Even she is having a hard time finding remunerative work and getting on a career track.  Furthermore, she doesn’t seem to be striving for that.

As a capital theorist she is less than qualified.  Here is her take:

“I don’t know what I am going to do!” said Katchpole, a freelance account manager at a political consulting firm called Winning Over Washington. (Its main client is the progressive group “I am going to have to defer my loans. I have no idea. Why should I be expected to pay them off now? Why are colleges charging interest on that stuff? Give us a break. Really.”

Bohm-Bawerk forget to include her in his commentaries on sundry theories of interest.

I wonder if she has considered moving to Nebraska or North Dakota?  Probably not, I am sure she will get a job right here in Washington, D.C.


I disagree. I think the tub of 48 beers for $15 is one of the smarter decisions she has made up to this point.


It was the decision I was _most_ sympathetic with.

Depends on what beers she won.

I was just going to say, this is classic Tyler_Cowen: he "sympathizes" with those who go irrecoverably deep into debt to prop up the education bubble that heats his pool, but looks down on those who have the audacity to ... save money on beer!

(After all, they should have spent that $15 on a nice wine that only super-eilte wine lovers like Tyler_Cowen know how to truly appreciate. Moron.)

Are you saying that Tyler's signaling is sending the wrong signals?

I'm don't think Tyler drinks. I think that's what he meant. (I could be wrong about this, but I thought he's said so before.)

[If not, and maybe even if so, I think he was joking anyway.]

He's said that he drinks very very little, bordering on not at all.

I agree, the tub of beer was the only sensible thing I read.

Here here! I can't fathom why Tyler would look down on this.

I'm kind of curious where these $15/tubs are available. That's cheaper than grain for brewing.

I doubt it's a regular thing, must have been a clearance or something.


Yep, definitely a good call.

"Why should I be expected to pay this now?" What is this person going to do when she wants to buy a car or a house.


What a softball. She is going to turn to the government to transfer some resources into her pocket from the greedy capitalists, of course!

Strange - she doesn't have a car or house, and isn't demanding either.

What she is actually demanding is a return to the standard use of grants, as was common for funding university students a generation ago - whether through the variety of programs for veterans collected under the term GI Bill, or with something like the original Pell grants.

But slowly, the idea of students graduating with an education without debt has disappeared, except among a certain group that has never been concerned about its children attending an institution of higher learning - and a nice industry has grown, one powerful enough to even insure that bankruptcy itself is unable to discharge certain, seemingly endless, debts.

Anyone unable to see the pattern is being willfully blind - and this is spoken as someone without a credit card, has never had a loan, and who graduated from GMU without ever using any debt or government aid in any fashion. A large number of people were led into debt, and it was intentional policy over several decades. beginning before some them were even born - and our dear hosts continue to explicitly benefit from that process.

This tower of debt is going to collapse, soon and hard.

So who is holding the bag?

Creditors, of course. Can you imagine what Occupy Higher Education would look like?

Haven't we beat this topic to death? Anecdotes about OWS, student majors and career choices etc.?

For a change, can we poke fun at Krugman again?!

I'm down with that.

It's amazing that all these people (or 96% of them) were able to find jobs before the recession. They must have all made really bad human capital investment decisions right before the recession and financial crisis and now they're all structurally unemployed. What a coincidence!

I find it hard to believe (as an Economics major) that my Econ degree was inherently more valuable than an Art History degree. There is little that I know which would require more than a week's training on the job to understand, and instead I am filled with equally useless information concerning developmental economics and the Phillips Curve.

To say that you are worth more as the result of your major when your major is still in the field of liberal arts (and not sciences or engineering) is absurd.

you must have not gotten a job that required quantitative skills after college. an art history major would have been completely helpless in my job. four years of doing problem sets and, most importantly, doing them quickly, cannot be taught in one week.

That may be true for your job, but on average I would disagree. It is entirely plausible that an Art History major would go through four years of college without solving a single equation, thinking about the second or third order effects of a complex system, or even (to be blunt and probably unfair) thinking about the current and future real world. On the other hand, I think it would be rare for an Econ major to manage four years without at least one of those, and those are some pretty valuable general-purpose skills to set you up for just about any well-paying career.

How is solving equations useful for the job market? I have an entire degree in Math plus I know several programming languages and I was never ever ever able to find a job at all.

How is speaking English useful for the job market? I have spoken English my entire life and I was never ever ever able to find a job at all.

There's a distinction between sufficient and useful. I can't hire someone who can't solve equations. But being able to solve equations is not sufficient to be hired by me.

This is why I don't denigrate these people for choosing the "wrong" degree - getting a job is a complete crap shoot even with the "right" degree why spend years studying something you hate for only the chance at a chance to get a job?

I am quite certain my Medical Degree was necessary for my job search success.

Art History should help you think critically-but in this student's case it does not seem to have worked.

I have an economics degree and I use it every day (I'm a software engineer). The economic way of thinking is extraordinarily scarce and that is very unfortunate for all of us.

It's exactly as amazing as the reasons that all sorts of embezzlement and funny accounting gets discovered in recessions as well.

Recessions expose problems that can get overlooked when the economy is doing well. But those problems didn't necessarily cause the recession, either.

Or the producers in China and India are undermining the producers here and cutting into their ability to pay for luxuries like people who ponder art.

Newsflash to both of you: in a society of all engineers and economists, we wouldn't have Apple products. Nor would we have most news, for that matter. I don't know if reducing the relative weight of liberal arts degrees in the United States would result in a Pareto improvement, but I can assure you that this "optimally efficient society" you seem to strive for would certainly include those who ponder art, if only because to understand art is to understand humanity.

People in the sciences tend to underestimate the value assigned to artistic endeavors. I would argue that art contributes far more to society than particle physics does, and yet we have collectively decided to shun artists and reward particle physicists.

We haven't "collectively decided" any such thing.

"Newsflash to both of you: in a society of all engineers and economists, we wouldn’t have Apple products. Nor would we have most news, for that matter"
Is that supposed to be bad?

Simply bullshit regarding Apple. I suggest you actually read up on the history of Apple and the origin of their products. I will give you a hint, it began with Xerox.

People outside of the sciences tend to underestimate the artistic creativity of the STEM group.

Who said otherwise? All I said was that if we back down the economic Maslow hierarchy, that may affect different fields differently. For a hint, we may look a little more like China and India than we do today.

Value is subjective and when an employer considers hiring a new graduate it is the employer's valuation that counts the most. It may be your opinion that the arts are undervalued but the hiring employer is generally looking for specific capabilities and for a new graduate with little professional work history the best indicator is what degree is possessed. Unless the job calls for an arts degree -- very few do -- the new grad with an arts degree faces an uphill climb. Education has become so expensive that it is an investment choice and anyone contemplating taking on a large debt should have a clear plan for how to pay it back. That's just reality. A minimum wage job at a non-profit doing good works with $100,000 of debt is pure foolishness.

"People outside of the sciences tend to underestimate the artistic creativity of the STEM group."

Bwahahahaha. Thanks for the laugh!

in a society of all engineers and economists

And the straw flies everywhere! It's a knockout blow!


You were not involved...

@Dan in Euroland

You can trace Apple's roots back to the 1980s (congratulations on getting through the biography, by the way...I'm sure you feel super enlightened now!), but none of the products in the 2000s were influenced by Xerox. I would agree that people outside underestimate the artistic creativity of the STEM group, but I would also posit that people outside the arts underestimate the critical thinking and problem solving abilities of the arts group.

@Tall Dave

I will admit, I laughed. However, I don't find my point to be a straw man argument; people in this thread are clearly blaming students for not going into the STEM fields. Some of the comments below this one are particularly ruthless with regards to major choices.

the particle physics job market ain't that great unless you are trying to apply your degree to financial markets.

@question the question: In my experience, quite a lot of mathematicians are musicians as well, it seems that these two capabilities go together in the brain. The other arts, not so much.

I can assure you that this “optimally efficient society” you seem to strive for would certainly include those who ponder art

Agree 100% with this. But as I am sure you realize, there's a big difference between saying that there's a misallocation of the percentages of degrees, and saying that society should be 100% STEM fields.

Thanks for attacking a straw man.

If I argued that too many houses were built in some cities during the housing bubble, would you accuse me of wanting everyone to be homeless?

(in some very obvious ways, quite literally)

I like Dave E's answer. Her choice of degree is not the issue, it is going into unrealistic debt to pay for it that is the problem.

...or to quote Buffet:

You only find out who is swimming naked when the tide goes out.

Or when you grab their assets.

I'm not sure to whom you're responding, but it's certainly not Tyler. Did you read his sentences: "Still, not all liberal arts students have her organizational and media talents, and this kind of story goes a long way toward explaining the current job market malaise for the young. Even she is having a hard time finding remunerative work and getting on a career track."


But I also agree that one of her best decisions was the $15 tub-o-beer.

Thank you for that bit of anti-Tyler snark, Liam. Let me just reinforce that point.

Shorter Tyler Cowen: unemployed graduates with huge undischargable debts have only themselves to blame because they all took Art History rather than Something Useful. If they'd taken Something Useful they'd all have jobs now.

It's worth boiling down the argument because the whole thing is veiled with Tyler's usual smokescreen of indirection, allowing for plausible deniability of his hackish intentions. Tyler, think about your reputation. The current hack hegemony can't last forever, and this stuff is on the (easily searchable) record. Get prepared to be a figure of fun in your old age.

Exactly, studying something "useful" doesn't guarantee anything. At the end of the day Tyler just wants to create this storyline whereby the unemployment is all due to insufficient education/skills and then if you point out new graduates aren't doing so great he comes up with this narrative about how everyone is studying puppetry blah blah blah

I'm not so sure that's a reasonable generalization. I don't think that majoring in a STEM field guarantees employment, but in a recession, it's probably a more reliable job provider than a liberal arts education. Just look at the unemployment rates in STEM fields versus liberal arts fields.

I think that's the narrative he's trying to establish. I understand and largely agree that probabilistically a STEM degree is better then a random liberal arts degree - but not as much better as many think, however I think Cowen is trying to establish a narrative of it's not the recession it's the student's fault for studying the wrong thing. I don't buy that narrative, not even STEM graduates are doing all that fantastically.

I don't think any economist worth is salt would say that anything is guaranteed. We all got snookered. I'll admit I'm one of the ones who graduated with a bunch of debt. I wasn't smart or proactive enough to take control of my finances or exit the haze of "ooh college SHINY! that so many high schoolers are doped with in time to graduate debt-free. But I'm darn happy I studied STEM rather than art history. Nothing is guaranteed, but borrowing tens of thousands of dollars to major in a fluffy subject during a recession is a recipe for failure, plain and simple. Nobody's pretending that a STEM degree is a magic talisman that makes you immune to a bad economy. It's all about raising your chances of succeeding given the state of the world around you.

But the thing that you miss is Tyler and Alex are trying to imply that the cause of graduate unemployed is not "the recession" it IS the fact that students studied the wrong subject. It's not that they should be maximizing their chances given that the economy is very weak but in fact that unemployment is largely a supply side problem - graduates who study the "right" fields WILL get jobs. This is the line these two are peddling with these posts - it's not as nuanced as you think.

Is the impact of a recession felt disproportionately by people with the "wrong" majors, especially those with little to no job experience? I think this is very likely true.

I remember at the peak of the tech bubble, it seemed anyone who showed up sober and could type their own name had a fair chance of landing an IT job, regardless of major. When the bubble burst, some of those people washed out of the field, others stuck on -- it didn't matter if you studied basket weaving as long as you could code.

By that measure 90% of people were able to find jobs today, in the recession. So, these are the 6% who now can't. In your words -- "What a coincidence!"

Why can people refinance their mortgages but not their (government-backed!) student loans? I know people who pay 8% per year. Tyler: in what world can these two facts coexist and still make sense?

Well for starters there's collateral involved in a mortgage.

Why can people refinance their mortgages but not their (government-backed!) student loans? I know people who pay 8% per year. Tyler: in what world can these two facts coexist and still make sense?

Because they're different contracts? Because the government makes arbitrary rules and regulations and thus shapes the markets?

One way in that student loans are different than mortgages is that mortgages have a collateral that has independently appraised value. Note that people who can refinance their homes are those whose homes have gained value; those whose homes have plummeted cannot. Would you like it if only people who had found good jobs could refinance their student loans, whereas people who hadn't could not?

There are some solutions based on the idea of the government buying shares in your future income. (I understand that Australia may do something similar.)

The US is odd enough that it has 30 year fixed mortgages with no prepayment penalty to allow easy refinancing. I'm not aware of another country in the world where such a thing is common.

A good post, of course. But I was referring more to the Australia plan (which I recommend you read up on; it makes it far easier to be young and indebted in Australia while continuing to ensure that individuals bear responsibility for their debts at some point in their lives). There is no reason, in my opinion, that you should be unable to refinance your student loans at this point. You are asking the most indebted and poorest constituency to pay interest well above a necessary rate.

Your point on refinancing relative to your job's payments could easily be inverted: you refinance to more affordable options if you do not have a fantastic job. So students who make $30,000 a year could refinance to 3.5% or 4% or something rather than continuing to pay a noxious sum at 8%. You could then stretch the duration of the payment out further, and gradually increase payment size (and shorten duration) as a person's income increases. So rather than permanently refinancing your student loans, as we do with mortgages, you should be able to do it in the short term. That way, recent grads can eat properly and have a better shot at "delayed gratification" as it relates to making money, rather than being trapped at a job with no horizontal or vertical growth just so you can pay their student loans.

How do you know the rules and regulations are arbitrary?

Of COURSE you can refinance student loans. Who is telling you that you can't? I did something similar myself, once upon a time: took equity out of our house when we refinanced, because I felt good about moving to a lower interest rate, even though I was swapping non-secured student debt for secured housing debt.

Oh, you meant "why doesn't the government reduce the interest rate on my existing loans without me giving up something in return?" Well, yeah, that's a tougher nut to crack.

Let's leave aside the fact that the government could (and possibly should) reduce the interest rate unilaterally on recent student debt just on principle (aka: you graduated in a recession and you do not have a job...your education clearly was not worth even the principle payment, let alone the interest).

Instead, focus on refinancing and extending duration without sacrificing the amount repaid. It makes--literally!--zero sense to force people who just graduated college to pay 8% on up to $200,000 of loans. Bear in mind that this debt already doesn't disappear in bankruptcy. What greater protection do you need? What is the purpose of this?

Maybe to get the taxpayers paid back?

I've never understood what it means for the "taxpayers to get paid back." I'm a taxpayer; where's my check from all the former students who are paying back their loans? Rather, all that paid-back money is just going to go into financing foreign wars and health care for old people. Let's be honest here; none of the taxpayers whose income was taken to loan uncreditworthy students gigantic sums of money are ever going to see a red cent of it ever again. It's not the taxpayers that get paid back, it's the government that gets paid back.

Nobody is suggesting loan forgiveness. Why can't you refinance at more attractive rates and increase duration? That is my central point.

Just like people who took out large "unaffordable" mortgages gambling/investing on expectation ofrising prices, many took out student loans expecting rewards that have not materialized for them. Many of those in non-STEM majors probably would have told you they expected non-financial rewards as part of their compensation....they are then disappointed when that did not occur. All student loan agreements should carry the disclaimer: PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE PERFORMANCE.

Mortgages are secured by the underlying property. You can only refinance a mortgage if you have equity in the house, otherwise no lender will touch you.

Student loans are secured by the government guarantee. You lose that guarantee when you change them to another type of unsecured loan. You can refinance your student loans into other unsecured debt, but they generally also have interest rates over 8%.

I consolidated my student loans in 2005. This allowed me to increase my repayment period from 10 to 20 years and decrease my interest to 2.75%. Is this no longer allowed, or am I just special because I avoided the folly of private loans?

They set the consolidation rate based on the rate of the underlying loans. Student loan rates started going up right about when you graduated. I consolidated when I finished in my MBA December 2008 and am paying around 7%.

(I'm also not complaining and am not asking for any money from the government - I knew what I was getting into and did the ROI before I started.)

Hillary, your words excite me.

Me too! But I'm not sure which of the sentences excites me more. i) "I finished my MBA" ; or, ii) "I am not asking for any money from the government".

What a toss-up.

I find it amusing that economists are so quick to mock the economic illiteracy of these kinds of idealists without recognizing their own opposite tendency to reduce all of life to value-free questions of economic mechanics. I thought economics was supposed to be a means to an end, not an end in itself. So, why always assume that economically disadvantageous choices are inherently bad ones and economically advantageous choices are inherently good ones. I think this mentality is at least as responsible for our current economic woes as the economically naive choices of large numbers of idealists. (Economics tells us that society clearly does not place a great deal of value on art history, for example. Does this mean society *ought* not to place value on this?)

So, why always assume that economically disadvantageous choices are inherently bad ones and economically advantageous choices are inherently good ones.

I don't, and Tyler doesn't either. But there's a big difference between someone choosing an economically disadvantageous choice and living with the consequences, and someone wanting to be bailed out. She borrowed the money, and now dislikes the terms of the deal and wants to be bailed out. With that is going to come criticism.

I (and others I know) went to great lengths to work and avoid going into debt and take out loans during our college education, precisely because we feared a recession. Apparently that makes us suckers?

I dislike bailouts of all kinds, to large corporations as well.

I don't *like* bailouts either, to individuals or corporations. It's personally unfair to those of us who made more responsible decisions. On the other hand, most economists supported bailing out the banks (TARP, etc.) because they understood that not doing so would be even worse than the bailouts for society as a whole. When it comes to individual actor's however, why does the the principle of individual responsibility suddenly becomes inviolable? Maybe there are also positive (or less negative) social outcomes from subsidizing individual choices that may not be optimal from a strictly economic perspective.

What frustrates me here is that Tyler (at least in this instance) acts as though economics determines social values. He dismisses the OWS and other leftist idealists as economic illiterates, as though there were no higher-order issues to debate. Economics might tell us how to best achieve the ends we desire, but it is definitionally incapable of telling what ends we should desire in the first place. Why do economists so rarely acknowledge this?

"I should stress that I am sympathetic with some of her choices (not the tub of beer), and you can read this as reflecting some strengths of American higher education."

I don't see him being that dismissive of her choices, nor insulting her. He is in fact complimenting her organizational skills at one point, and reflecting on how even those skills have not been enough to land her a job.

That said, when you enter into the realm of public debate, you'd better bring your A-game. If you make poorly conceived arguments, it's fair to be criticized for them, and you don't need to get a 2 paragraph disclaimer about how you're mostly making interesting points etc. Tyler often writes posts which point out flaws in other economists' thinking, but that doesn't mean he thinks they're economic illiterates, just that he's holding them (and many of the OWS people) to a high standard.

As to economics telling us the means to our desires, as opposed to the desires themselves, I agree with you, to a point. However, it is appropriate to call someone out when they express a set of desires that are contradictory, or otherwise impossible to attain simultaneously. To be fair, most people's desires are like that.

He is in fact complimenting her organizational skills at one point, and reflecting on how even those skills have not been enough to land her a job.

I wouldn't give that compliment much weight. That's classic Tyler. Even as he's going to kick someone in the balls he hands out a hug and a cuddle first.

It wouldn't bother me nearly as much if there were some sort of deal worked out, like one where she would work in some capacity and the government paid her. (What she might do is not clear; there are only so many jobs in infrastructure, for instance.) Or, like I said below, the government could help her in some way without entirely erasing her debt. For her and others like her, they'd still be forced to deal with their consequences, for the most part, but they'd have a chance to get ahead and the cost to the government would be minimal.

Maybe she should be forced to take a 2-year military hitch (unpaid) in exchange for all debts paid.

She should go gun down some libyans to help put Al Queda in power...maybe hand out muslim bortherhood recylcing bins or help set up the new BIS connected central bank.

"From College Major to Career - Choosing the right college major can make a big difference in students' career prospects, in terms of employment and pay. Here’s a look at how various college majors fare in the job market, based on 2010 Census data."

If only she had not majored in Art History (unemployment rate: 6.9%) and instead majored in Art Education (4.2%).

But, thank god she didn't major in Biochemical Sciences (7.1%) or Econ (6.3%).

She could have made worse choices than her Art History Degree (6.9%).

Here are some science unemployment rates from John's data that exceed an Art History unemployment rate:

Architecture 10.7%
Computer Engineering 7.0%
Engineering and Industrial Management 9.2%
Genetics 7.4%
Materials Engineering and Materials Science 7.7%
Miscellaneous Engineering 7.4%
Neuroscience 7.2%
Statistics and Decision Science 6.9%

Boy, she dodged the bullet.

Numbers bunch around 7. Have we maybe got a cyclical problem?

Don't tell Tyler.

The factor missing there is that the Art HIstory majors are paid a lot less than the Computer Science majors.

This thing has some odd numbers:

CLINICAL PSYCHOLOGY 19.5% $25,000 $40,000 $61,000 168
MISCELLANEOUS FINE ARTS 16.2% $26,000 $40,000 $49,000 164
UNITED STATES HISTORY 15.1% $30,000 $50,000 $96,000 139
LIBRARY SCIENCE 15.0% $23,000 $36,000 $49,000 159
ACTUARIAL SCIENCE 0.0% $52,000 $81,000 $116,000 150
PHARMACOLOGY 0.0% $48,000 $60,000 $101,000 169
SCHOOL STUDENT COUNSELING 0.0% $18,000 $20,000 $42,000 172
GEOLOGICAL AND GEOPHYSICAL ENGINEERING 0.0% $56,000 $73,000 $101,000 166
ASTRONOMY AND ASTROPHYSICS 0.0% $56,000 $62,000 $101,000 170

I would like to see the methodology used by Census and WSJ, especially the sample size.

Now you're changing the measure from unemployment to wages. Oy veh.

unemployment is just a special (n = 0) case of low wages. =)

Think comparatively more art history majors aren't in the labor force? That seems like an MRS degree to me.

ding ding ding. Maybe the lesson is don't major in art history unless you're cute

Petroleum engineers have a 4.4% unemployment rate?!! I can only assume that they are being really picky about their employer or location.

Seriously - why is there no correlation between salary and unemployment rate? Surely if supply and demand mean anything, higher salaries should go hand in hand with high employment rates. I suspect this data is very noisy on employment rates.

Because Supply and Demand are not all that factor into salary rates.

Unfortunately this information doesn't tell you supply, or demand. It just tells you what proportion of a given major's supply did not meet up with demand.

These people are the modern equivalent of priests or nuns/monks in days gone by, surviving by donations. There's a reason such people had to take a vow of poverty - there was little prospect for them to be anything but poor. But somehow they got the idea that you can both "fight to change the world" and have a pleasant, comfortable big-city life with all the cool stuff and experiences.

At least she's on George Soros' payroll as a subcontractor...

Why would she consider moving to Nebraska or North Dakota? The jobs out there are tough blue-collar work: truck drivers, oil riggers, and the like. Even if she lands an admin job, housing is very expensive in the boom towns. The vacancies in North Dakota are dead-end jobs, not careers. She could probably get a dead-end job working in her local McDonalds in D.C., but she's holding out for a career. Given the difference in long-term potential pay-off it makes sense to hold out.
Besides, her boyfriend has a reasonable job in the DC area. It's easy for one person to move, much harder for two.

Here is more on the boom in North Dakota:

Shockingly enough, no one considers 'moving costs' or 'qualifications' as relevant - take a job dammit! Are you lazy?

From the article you linked: "At fast-food chains, the going rate is about $15 an hour.... 'If someone doesn't have a job here, they don't want to work'"

I can understand why people like her want to hold out for a career job and not a dead-end job. But if the career job isn't materializing, one kind of philosophy says it's better to take the dead-end job. Another kind pretends the dead-end job doesn't exist, frets about having no idea what to do, and begs government for a solution.

Er, in fairness, the preceeding sentence in that article was, "Even the local strip club is booming, with dancers making up to $3,000 a night."

Um ... yeah, I wouldn't begrudge an OWSer for passing that up ;-)

Realizing this is off-topic, I don't believe the $3,000 a night number. That's a million a year. It's also $375 an hour, assuming eight hour shifts. Or $20 every five minutes, non-stop, and without any cut for the house.

In a profession where exaggerating your income to a gullible reporter might be a small way of saving face.

I was about to say the same thing. Escort and stripper salaries seem always inflated when reported. For those salaries strippers ought to be driving BMW's home.

The other irony is that strippers seem to be very geographically mobile; so any super-normal profits would be eroded pretty quickly by hordes trooping in.

I'm sure top dancers at high end clubs could make that much on peak nights. It says they make "up to" $3000. Not they make $3000 every night.

The upside is, most of it probably comes in cash tips and is untaxed.

I can believe that somewhere, probably NYC, there are strippers who sometimes makes $3,000 a night. The sentence as constructed was misleading.

But in North Dakota, I just don't believe it. As Rahul points out, the girls move around.

The truth is probably a lot closer to "Normally strippers make about $40k a year, but in ND they can make $70k! Which isn't bad for a job you can do drunk while the kids are asleep..."

Suggesting that someone move to North Dakota or Nebraska isn't the solution for everyone, but if she's not tied down by anything in particular, like a house, and she can find some job, any job, to at least begin making payments on her debt, it's not the worst idea in the world for someone like this young woman. After a while, she might find something more to her skill set or liking out there. After all, the people working in non-office jobs need to or will want to shop, eat out, have their houses cleaned, or plan for their retirement. Eventually, if she gets sick the area, she can use a new and better position as a spring broad to something else.

Would you really advise your kid to move to north dakota to get a job? I sure wouldn't.

The population is increasing but "The state's weather makes it hard to lure new residents. The average January low temperature is four degrees below zero."

I still think college graduates would be better served by staying around a big city. Why make roots somewhere that is just going to suffer an oil bust in 5-10 years?

Why does every post on this website inevitably turn into a debate about moving to North Dakota? Let's pocket that debate and move on, please.

Perhaps Tyler is a member of the ND chamber of commerce?

Indeed. Looking at the last year's household survey data, we find that in Fargo, the largest city in the state, a small number of jobs were added. In Bismarck, the capital, jobs were lost. If you want to live in a man-camp in the western part of the state, or in support of same, lots of opportunities but only 10-20k new jobs in total. If 40k people -- out of how many millions of unemployed -- arrived, wages would plummet. At least two counties have banned creation of any more man-camps. The whole region is struggling with increases in illegal drugs, prostitution, and the violent crime that accompany them. Local infrastructure is being overwhelmed -- ERs have had to add security guards to protect the patients against violence, paved roads are being rapidly pounded into gravel by heavy equipment.

She makes $400 a week (per early paragraph in the article) and lives with somebody who has a full-time legal job. I struggle to see how their household income could be under $40k/year, and it is likely at least $50k. With no kids, car, or mortgage...what part of the math am I missing?

I don't think her BF is really supporting her. He might also have some brutal loan payments. Hopefully she is at least smart enough to get paid under the table with her nanny jobs.

To all the sanctimonious econ majors in the group-- your point about living with consequences is well taken. But lost in the smug, self-congratulatory back-patting is the fact that not everyone enjoys quantitative work as much as you do. In fact, some people hate it. Spending your life doing something you don’t like doing is a sure way to exhaust an unfulfilling career (and life).

As an anthropology major with a well paying job a year out of college, I’m learning that even in the business world, hard quant skills are your foot in the door. People distinguish themselves by knowing how to work well with people—not always a strong suit for the data crunchers.

Getting paid to do what you enjoy is a luxury not a fundamental right. Also, people skills are not necessarily mutually exclusive from number skills.

> Also, people skills are not necessarily mutually exclusive from number skills.

In fact, given that being smarter helps you with both, I'd expect there to be significant correlation.

Clean air is a luxury and not a fundamental right.
Getting paid is a luxury and not a fundamental right.
Not starving is a luxury and not a fundamental right.

See how vacuous that is?

I consider clean air and food are in a slightly different league than having "fun" at your job. But maybe my priorities are skewed.....

Clean air is a luxury and not a fundamental right. Getting paid is a luxury and not a fundamental right. Not starving is a luxury and not a fundamental right.

Uh, who says it is fundamental right? And who funds that right? Mother nature?

The idea that getting paid should be your first priority, enjoying your life the second, seems precisely backwards to me. But that may just reflect on my lack of a sufficiently quantitative education.

If you can enjoy life without getting paid, there's nobody as lucky as you.

It is perfectly legitimate for you to prioritize enjoying your life over getting paid. However, after you've made that choice, you cannot expect to be paid as much as those who have made income their top priority.

(Personally, I enjoy both.)

It doesn't sound like she's either enjoying her life or being paid right now. Probably makes sense to find some balance between the two, but it's not up to the rest of the world to pay for her art history studies just so she can enjoy her life a bit more.

And I don't enjoy tasks requiring small talk and building rapport with lots of strangers, cutting me out of a large fraction of the job market.

Boo hoo.

I never said work had to be fun, just fulfilling. I think that is a perfectly achievable goal, even for Art History majors. Obviously odds are low she's going to get a job there, but that doesn't mean there aren't other avenues for her talents. Regardless of how you feel about the specifics, she just mobilized a national movement--have any of us pulled that off?

No, because we rank getting a job as more important. She just got her priorities flipped -- the same effort could have gotten her a job by now.

The quantitative content in an economics degree is laughable - they get jobs though because getting an A average in Econ is WAY easier then if they took some hard sciences.

+1 on little to no quantitative skills in an undergrad econ program.

But give employers some credit - they look for skills they need, not a GPA on a piece of paper.

No in fact they ARE looking at GPA and that's about it, a huge number of new graduate jobs have minimum GPA requirements on them and it tends to be A averages only. This is why I say STEM grads are at a big disadvantage vis-a-vis Business/Econ grads and even many Liberal Arts graduates because STEM grads most likely have lower GPAs. I've been to interviews where all it's been is going through my transcript course by course and asking (for the courses with lower grades) to explain why I didn't get an A. This is the reality.

I'm curious, what kind of jobs are you interviewing for where they care about your classes or GPA? At all the places I've worked at (tech industry), all we really care about is your skills and attitude. We even hired a guy without a college degree! Heck, I don't even have my GPA on my resume.

I always assumed that a major in Econ was awarded under a BA, not a BS.

Why are people treating Econ as if it's on par with hard math, a science discipline, or engineering in one form or another?

It seems much more closely aligned with Sociology than any of those things. Or in this case closer to Art History than any of those things.

It's happened twice once was a tech firm and the other time was a bank. Another time I was 6 interviews in with one software company (not a very big firm either maybe 40 employees) and they had me send in my transcript and then they basically ended the process shortly after that (my marks weren't horrible but also not really great overall). On top of that some companies have formal New Graduate Training programs and admission into those are always heavily grades based.

@question the question

Because it's a bunch of Econ majors on this blog trying to pretend their superior by looking down on others. As far as I know most Econ programs only require a single math course and a stats course with maybe an additional course in Econometrics.

QQ You can get either a BA or a BS, only difference is the BA is heavier on math theory and the BS is heavier in math. At least 20 yrs ago.

Your job is not your life. Your job is roughly one-quarter of your adult waking life. Spending one-quarter of your life doing things you don't like, to acquire the resources necessary to spend the other three-quarters of your life doing things you do like, strikes me as a reasonable trade. In most cases, a necessary one. Not that anyone will try to stop you from finding a path that lets you spend 100% of your time doing things you like - pursuit of happiness, and all that. Just don't expect a whole lot of sympathy if you complain about topping out at 75%.

Inaccurate. My job enables me to obtain housing, food, etc. And to attract a woman/wife/mate with whom I will then breed and produce children, who will in turn require resources.

Therefore sacrificing one quarter of my life to have a great three quarters is eminently OK for me.

You make it sound so romantic...

> And to attract a woman/wife/mate with whom I will then breed and produce children, who will in turn require resources.

If that is what you expect your job to do, you are very likely in for a big surprise. Just saying.

I think we are missing how useful the financial bubble was a sucking up under qualified graduates from all disciplines.

Mr Cowen, why don't you take one of these great NE or SD jobs? It might be better than trying to be an ersatz career counselor. I've moved across the country with help from my employer and it was not easy. I realize you might not think these people have families or social networks where they are, but doesn't that cost along with the cost of moving factor into these calculations? This recommendation that people just 'up & move' might not be cost free. Mr. Cowen, as an erstwhile economist, I would think that would be something of note.

There are jobs all over the place, that doesn't mean that by magically moving into the sticks you'll get one.

This is laughable. You're arguing that it's a fundamental right to stay with friends and family?

No. But if you are going to say "just move" -- well, there is a lot more to the cost benefit calculation than just the salary differential.

Just move doesn't work in the real world. Children, spouses, mortgages all factor in to the equation. My daughter needs significant medical care, my wife has work that requires contacts/college with scholorship locally, and my mortgage is underwater. Moving is not an option.
Will, Mr. Sader says there are other factors, not he has a fundemental right.

It's the Serfdom/Slavery mentality amongst people here.

I've worked at jobs in a boomtown and getting a job is easy. It's finding a place to live that's difficult. When I say "place to live", I don't mean a nice place to live with a swimming pool and gym.
Apartment complexes? Full.
Hotels? Full.
Dumpy motels that are typically inhabited by people recently released from halfway houses after serving their jail terms? Full.
Campgrounds? Full.
Roommates? Already have a guy sleeping on the couch. Full.
Sleep in your car? In minus 5 degree winters? Are you kidding? Illegal. You'll be thrown in jail, but you'll have a warm place to sleep. That is, if the cop doesn't just beat the snot out of you and leave you for dead in the minus 5 degree winter. Not an option.

"This recommendation that people just ‘up & move’ might not be cost free."

Tyler's point exactly?

I serve my art history majors by being Professor-Bucket-of-Cold-Water-On-Your-Dreams. I tell them that graduate school is a vow of poverty and that to pretend otherwise is delusional. I insist that there are no jobs and will be no jobs. I remind them that though that "no" is metaphorical, the difference between 200 applicants per job and no jobs is pretty slight (and 200 applicants per job isn't all that uncommon here at these Colleges -- we had 92 completed applications for a job in GREEK two years ago!). I explain in considerable detail how I owe my position to (1) meeting the basic requirements and then (2) blind luck. I'm sure that a third of the people who applied my year met (1). I didn't get the job the first year, but (2) struck when the person who did get the job left after one academic year. Somehow this doesn't always work -- one of our recent alumnae is now in the (excellent) grad program at U of Indiana. *sigh*

Ms. Katchpole doesn't understand (based on “I am going to have to defer my loans. I have no idea. Why should I be expected to pay them off now? Why are colleges charging interest on that stuff? Give us a break. Really.”) debt. I suppose her parents might be responsible there, but I sympathize with them. There's little to no way to get an 18-21 year old to internalize what they don't want to hear.

Interestingly, I know someone with a graduate degree in art history that makes big bucks advising private banking clients on art investments.

I don't want to get into her past choices. Instead, I'll focus on her current situation.

It doesn't say whether her loans are private or public. If they are public and she can secure a fixed payment, I'm far less sympathetic to her. $200 or so is certainly doable; even $400-500 isn't that outrageous, as long as she isn't being killed by a high interest rate. It's not easy if you simply can't get any work at all (more on that in a second), but if you can manage to start making payments, even if you have to make difficult decisions like asking to live with your parents for some time or scouring the streets to find people who need their houses cleaned, it's possible.

The thing is, there simply aren't enough jobs out there. More of them would obviously be the first and best step towards helping people pay down debt. But would some sort of refinancing with the government be the worst thing in the world? I doubt that the government would lose much, if any, money with such a plan, but even if it did, is that really that bad? I'd be far more uneasy about such a plan if there was a broad erasing of such debt, but what about a situation where it was refinanced to a more reasonable level and then kept there as long as payments were being made in good faith--taking, say, someone who was paying eight percent and knocking it down to four or five percent, or even lower if the payment period of the loans could be extended? At least that way, the person who took out the loan would be forced to deal with the problem, and the government's bottom line wouldn't be greatly affected.

It looks like the new kid on the block is 'I can't get ahead because I have student loans'. Doesn't that sounds like the housing bubble issue?

I had ZERO debt after I graduated college. Wanna know why? Because I worked 8h a day while I was taking college at night! Apparently that education was good enough because I have a pretty good job now a days.

So what is going on here? Kids are going to incredibly expensive colleges (where they spend all their time studying right? Of course) and now we are supposed to feel bad for them because they cannot find jobs? I don't know what pisses me off more: the fact that they chose to go this way and now are complaining or the fact that they still want my taxes to pay for their debts.

I agree with the people above who said that this is why we need recessions. Yes, I feel bad for people who made bad choices and I don't want them to starve. But they still have to pay for their choices. People keep bringing back the banks bailout but we did that because *all society benefited*. We definitely should do our best to avoid doing that again but we cannot use these stupid moral comparissons between things that are not related.

If you don't mind me asking, what year did you graduate; what was your degree in; did you receive any sort of assistance, public or private, at all; what sort of job did you do now; and when did you get this job? I don't expect specific answers, of course, just enough to get an idea of how you compare to others.

Also, I doubt anyone is making suggestions from some specific proposal, but merely speaking in general terms, so I will do the same. That said, I don't recall anyone saying we merely write off all of the student loan debt or anything that extreme. Instead, it seems like people are trying to think of a way to make people pay for their decisions without confining them to a life of limited choices because of, in part, poor luck. There's nothing inherently wrong with arguing against that in ideological grounds, but let's remember that significantly limiting a large group of people economically won't do society as a whole any favors. Instead of merely saying that they need to live with their choices and deal with it as if nothing can be done, let's figure out a way to not let them get off scott free but rather put them down a path on which they will eventually get to a better place, even if it takes longer, a lot longer, than they'd like.

i graduated in 95 from a 'mid-of-the-pack' university in Brazil. My major was in Computer Science. Later I graduated from Virginia Tech (MBA) in 2005. I was also working full time during my MBA. I work for a very, very large IT company for the last several years. But I have had good jobs for at least the last 10 years. I was working at IBM in Brazil during the time I went to college (they call it internship but it is basically a full time job where you get paid a lot less - got to love the ways companies find to work around stupid labor laws). I did not receive any public assistance. I did receive a partial scholarship. I was also living with my parents at that time (even though they hardly saw me).

Now, I am not saying loans are bad. I actually think that my life would have been much, much easier had I had the chance to get a loan and pay for my college instead of going through 4 years of 14 hour work days. The real problem here is all the crying about unfairness and requests for 'a break'. The 'path to a better place' must have existed before these people got into these loans. No one is entitled to go to University X just because they were accepted. The cost of something is a huge component and these people should pay for what they got.

So your experience was in no way comparable to most people graduating in the last 10 years.

First, you were working at IBM in Brazil full time while you were in college. Meanwhile, in the United States IBM has slashed headcount to such an extent that it no longer separately itemizes the the number of workers it has remaining in the United States for fear of the bad PR it would generate.

Second, you started college in Brazil nearly 20 years ago. My guess would be that your costs were much lower than those of most students graduating from public colleges in the United States today.

Third, you entered a job market that was much stronger than the one we have had in the last 10 years. Over the past decade, the United States has lost -- yes, lost -- private sector jobs. Much of this loss has not been through layoffs, but rather through reduced hiring of new entrants. You can see this in the very high unemployment rate for young workers. The jobless rate for college graduates between 20 and 24 was over 12% in June. Those are depression-like numbers. You experienced nothing of the sort as a young worker.

Fourth, many college graduates cannot find a job period, let alone one that accommodates a full course load while they are still in school. For the most part, this is has not been a major problem, as most students have not previously sought work. But, even were they to, I would guess that most would be unable to secure work, especially career-enhancing work.

You are undeniably right that many people have made mistakes and could have better positioned themselves for an economic downturn. But make no mistake, had everyone tried to do what you did, few would have been as successful. The opportunities simply are not there for everyone.


Oh boy. You really don't know what you are talking about! If you only knew how the job market in the mid 90s was in Brazil. Check this out for some reference ( Not mentioning the kind of money colleges in Brazil charge for tuition... or my family situation at that time.

The idea that we have no opportunity in the US is ludicrous. The company I work for has currently hundreds of openings. Many, many other sectors are hiring. Oh well, not every one can work with computers right? Is that really true? Is that really how we measure things now? I have worked for several years here in the US and I have seen an incredible number of people fail because they 'don't want to take orders' or 'they want to look for something they love'. hey, go ahead. This is a free country. But please don't tell me there are no opportunities because we have 9% unemployment! Nancy pelosi was already singing that song when we had 6.5% unemployment years ago!

Now would every one suceed if they followed my steps exactly? Of course not, but that is not the point. The point is that there is plenty of opportunity out there and people are not taking it. People are not only studying the wrong things because they are easier, they have the wrong goals. I don't 'love' computers. I am not inspired by my profession. It is something that I saw as a good opportunity and I went after it.

I see the current situation as a needed evil. I said that at the beginning and I will say it again: if there is one right thing that Obama said so far is that Americans got soft. Stop crying and rub some dirt on it.

I have a kid who is a junior in college: good state school, and she worked 3 jobs last summer (65+hours each week) so she could study abroad this year.

She has been saving money for college since she was 8 and works summers and during the school year. She applied for every scholarship she could and was awarded a few. She is on track to graduate with no debt, neither student loans nor cc.

Her options after college are pretty wide open, and include traveling for a while, taking a lousy job so she can live where she wants, etc. She is also majoring and minoring in subjects that interest her. And I have every confidence that she will be able to make her way in the world, but it will probably not be as a big company employee. Last summer she was trying to sell some old stuff that belonged to her grandmother and after 20 minutes the store owner offered her a job.

There is a lot of opportunity in this world, but it is not being handed out with a college degree.

The real problem seems to be that too many kids (and their parents) focus on "school" and "college" as the only respectable way to make your way in the world. And that is just not the case.


I think the real problem is that people in general have simply forgot the basic restrictions of life. Things like, you can only buy what you can afford. Or that you only get loans that you are willing to pay back.

My daughter is also going to college now. Even though she did work for quite a while when she was in HS, she decided that now she wanted to focus on college. So she did take a loan. We are helping her but we are not paying her way through college. She needs to understand the cost of things. Before we had the conversation about money she was thinking about going for a major that I think would not be very market friendly. After seeing all the expenses and having the responsability of a loan on her, she is leaning towards a much more practical major.

We in the US are simply too rich. So much so that we sometimes forget that the laws of economics still hold. Maybe the current downturn will being this perspective back to people (after they finish crying in their OWS protests).

how about all those downtown revitalization programs that focus on developing art & culture "industries"? i read/hear about them happening all over the country. are these programs just kicking a can further down the road? are they valuable to society? do they create a false sense of expectation for former and current college students that their BFA will lead to economic opportunity?

She played by the rules and she clearly has ability and talent that an employer would want. The economy unfortunately didn't live up to its end of the bargain. The sad part is she isn't the only one and every year there will be more in her situation. It may be time to rewrite the American social contract.

"The economy unfortunately didn't live up to its end of the bargain."

The economy is not a person. It did not sign a contract with her. It did not victimize her.

She is a person who made a long series of choices that were either contrary to or ignorant of the reality of supporting one's self as a grown up person.

I beg to differ - the economy - the organization of production, consumption and distribution is supposed to serve society at large and hasn't. The social contract was that if you followed the rules and get a solid education you could move up, if you're going to have a society with no real legitimate paths to prosperity then you should expect protesting and you should in fact expect violent rioting.

Oh, change is bad?

It is rather hard to like creative destruction and all that....

I do not see a society with 'no real legitimate paths to prosperity' reflected in her story. I see someone who chose a career based on enjoyment now complaining that enjoyment doesn't pay the bills.

But I majored in subjects that were supposed to have good career options and learned things that were supposed to give me good prospects and got nowhere at all she could have chosen some STEM subject, not enjoyed it but powered through just to end up in the exact same spot.
What I'm saying is this idea that there are jobs out there for graduates with the right education is BS as well.

Nobody will argue against progress. There are lots of inefficiencies and if you can find a free lunch for society, by all means let us know. But nobody "deserves" a job they like, at some arbitrary standard of living they choose.

If you're as good as you say, you're either extremely unlucky or have terrible people skills because there is still a demand for skilled laborers.

But Skilled is a funny word because sure if skilled means minimum 5 years experience and graduating top of your class, sure there's demand. But for the majority of recent graduates in STEM with more limited experience no there's no real demand at all.

That just sounds like whining. I graduated in 2009 with a semi-worthless CS degree from a liberal arts school; when I interviewed, I had to defend my degree from skeptics who questioned my decision to attend a hippy dippy school. I was hired anyway. Keep trying, you'll get something. But you appear to have a really bad attitude. That can't possibly be helping either your motivation or your attractiveness to potential employers.

How is it just whining? I rarely see a job that doesn't demand years of experience in some very specific area or technology. On top of that the hiring process is just ridiculous - I have to wade my way through independent recruiters to get to HR reps - neither of which know much about the actual job to even get a chance of talking to someone who knows anything.
This attitude is a product of history, it didn't come from nowhere.

Do you really think that if you walk into a job interview and knock their socks off, they're going to turn around and say, "oh, well this guy is awesome, and we think he'll be a great fit, but he doesn't have five years experience, so… NEXT!" I don't think so. A lot of companies put stuff like that on there to discourage people with low self-esteem. I interview candidates at my job pretty regularly; the most important thing we want to know is if you'll be a valuable member of our team who will contribute to making us more awesome. If we think you will, great, nothing else matters. If we think you won't, then you could have 20 years experience and a PhD but we'd turn you away. If you can convince an employer that you can add value to their business, you will get a job, even if you are did not graduate in the top two percent of your class. It's a matter of having the right attitude, aligning your skills to the requirements of the position, being emotionally prepared, and demonstrating your competence. If you can do that, you can get a job.

Not only do I think so I've seen it happen first hand. Also you're assuming you'd even get an interview without the requisite years experience which is a pretty big assumption, most jobs I see go through independent recruiting firms staffed by people with little to no technical background who have absolutely no ability to judge whether someone is skilled or not and must rely 100% on the job description to decide whether they'll forward your resume or not.

Okay, you're right, it's hopeless. Employment is an impossibility.

Now what?

'The social contract'

What a bunch of crap. You fight for a job, you don't get anything for free. Go flip some burgers and get another degree if needed. The 'path to prosperity' should begin with the end of these stupid ideals based on fairy tales.

Ok, maybe I do need my afternoon break :-)

Why would you want that? Man this serf mentality of some people.

Who am I serving dear CBBB? if anything, what I am saying is: do not depend on others to help you.

I didn't hear a sufficient amount of complaining when the big banks got bailed out coming from these quarters. This "total self-reliance" belief system seems to only extend as far as people who majored in fine arts.


Here is a quick and easy rule to you: we should only bail out things that would cause the end of the world. Right after that we look into avoiding that situation but preventing melt downs comes first.

Puppets do not qualify.

I see so it's just a matter of getting yourself into a position where you can blackmail society and then all the bailouts in the world are A-OK.

+1. Even more specifically, I didn't hear anyone on the right demanding to condition the bailout on capping banker bonus/salaries. It's one thing to bailout the banks on the theory that otherwise the system as a whole will fail, but why can't the bankers learn to live on a lower salary or take a burger flipping job? I can't believe they'll all quit and no one competent will materialize to run the system.

For the most part, the existing bankers already proven their incompetence. And there are lines of people behind them who will gladly take their jobs if they go. Their jobs are surely more in demand that the burger flipping jobs or construction work in North Dakota.

It's a double standard that's as bright as day.

Hey don't blame me, I was livid at the bank bailouts just as much as it seems you were! But seriously, give up this "social contract" thing. The world starts to make a lot more sense once you think of it in in terms of how you can help other people achieve their own goals. Do that well enough and you'll never want for anything.

That is correct. Maybe that is a plan for you: start doing something important so if you fail we will bail you out.

Salaries have very little to do with what happened to banks. It was all a matter of cash reserves and government policy than anything else. And try to think this through with me: if you had to choose between a complicated job in a bank or to flip burgers for the same salary, which would you choose?

We arrested the people who broke the law. We need to reform the system. People will pay more for bank fees (turns out this seems to be the only part that gets media attention). Stop with all the fantasies about moral judgement here, there is none to be made.

Alright so you're just a Royalist, that's fine but be honest about it. And let's be honest about this you say reform the system but once reforms start getting proposed Tyler will just start throwing up posts about how foolish it is to try to reform anything and you and the rest of the commentators here will just do a 180 on that. The position on bailouts/reform just changes in the wind.

Last one for this thread CBBB,

Yes, we should try to reform the bank system. Is that easy? Of course not! Just look at the outcry because BofA wanted to add a $5 fee to support the increased regulations!

Oh, cut their profits you say. Again, banking is not an easy profession. They will always make a lot of money - go into financing, it is a good field even now. I have no naive expectations that we can legislate our way out of financial crisis. We'e had them since the beggining and we will keep having them. It is part of the game. Stop basing your life on that and look for your own opportunities and goals.

BTW, I did mention that the banks already paid back the baiol out money right?

Paying back the bailout money is a pretty meaningless statement - they got a way below market interest rate loan, was the taxpayer compensated for taking on this risk or for the opportunity cost of those loans? And the bailouts extend beyond simply TARP.

I didn’t hear anyone on the right demanding to condition the bailout on capping banker bonus/salaries.

Such price controls often have nasty unintended consequences. The capping notion was rejected by Treasury technocrats, because they felt it would have meant a mass exodus of talent equivalent to the bank failing anyway. Finance is brutally competitive that way.

Now, what they should have done is made bailout condiitional on breakup -- too big to fail is too big to suffer. Markets must have winners and losers.

The GM bailout was even worse -- they handed to company to a primary reason it was failing, and screwed the bondholders who should have been ahead of UAW.

My give-a-damn still works but I've been more selective about using it lately. She sent out some job applications to some leftist organizations but hasn't heard from them? Cry me a river. I'm underemployed and send out resumes and applications daily to help wanted ads I find as well as to businesses that aren't advertising for help. In the meantime I work a full time job that I hate but am grateful to have.

She's got student loan debt? Did someone force it upon her? Otherwise she's just one of millions who fell for the biggest con in American history - the college degree. There is a world full of opportunity out there that doesn't require a degree. It's not my fault if she is not creative enough to find a place for herself in the world.


So in the first paragraph you state you're underemployed and hate your current job and in the second paragraph you chastise people who get college degrees because there's a "world of opportunity" for people without degrees. Real coherent.

What do you want the government to do about the fact that you don't have a job you like paying you a wage you like?

who said anything about the government? What are you an idiot? I just think Tyler and Alex should stop with these posts trying to pretend that the youth unemployment is all because they studied the wrong subjects.

I think you are generalizing your unhappiness and lack of success onto everyone. Unemployment sucks, but keep in mind that the flip side of a 9% unemployment rate is that 91% of people who want a job have a job. Ask yourself what you can do to be a part of that group rather than being bitter that the lie you and I and many others were sold on (borrow zillions of dollars to go to college and you'll be guaranteed your dream job!) turned out to be a bunch of bull. It is a bunch of bull, that's true, but that won't help you or anyone else get a job and move on with their lives. Positivity is a wonderful thing. Truly rid yourself of the anger and I guarantee your problems will begin to fade away.

Optimism: We will see widespread adoption of local solar power in Los Angeles and Phoenix ~2015.

Solar will become cost- competitive with on-the-grid _peak_ prices somewhere in the middle part of this decade in the sunny parts of the American southwest. That is, it will be be cheaper for a homeowner to install solar cells on the roof to run than to rely on the power company the air conditioner for the hottest days .

This transition will require no additional infrastructure, no government subsidies, no new power transmission lines, and NO ENERGY STORAGE because the peak power is already matched up with the peak demand at the point of consumption.

Since approximately 5 million homes will be candidates, this solar panel market will explode at this point, further driving down the cost of installation.

When the prices get close enough it will only take one "rolling brownout" of residential air conditioning to drive adoption of the residential solar power technology.

oops. posted to wrong blog post. this is supposed to be in the solar power discussion.

I think it's time for Tyler to get real here and stop criticizing people's majors. I did the whole STEM thing and it got me NOWHERE, many of my former classmates are either in similar positions or in what amounts to dead end jobs. In the end it doesn't really matter what you do.

In the end it doesn’t really matter what you do.

Then STFU.

Someone has to stand up against Tyler Cowen and his mythmaking.

Well an incompetent person is incompetent, no matter what they majored in. Tyler, Alex, and company argued that there are too many liberal arts graduates and not enough skilled laborers in the STEM fields. The evidence is pretty rock solid.

The evidence is not rock solid at all, it's just a bunch of assertions from Tyler and Alex. Like I said on the other post - there's only demand for the top 5-10% of STEM graduates, if you're not going to be in that upper echelon then there's really no point in getting a STEM degree at all, it's not going to help you out. And so therefore getting an Art History degree isn't as foolish as some people around here assert - she could have gotten a Physics degree but if she finished with a B then she'd be in the exact same position.

Now these guys on the blog with Econ degrees love to talk about how valuable their quantitative skills are but let's face it most of them are people who couldn't hack it in STEM and went down a rung, they got jobs because most companies just hire the guy with the highest mark and it's next to impossible to NOT get an A in an econ course.

I "hear" your frustration. I'm a professor in biomedical science (no, I don't want to mention the exact field). I am at a second tier research university. Believe me, you would be considered an EXTREMELY attractive candidate in any of the biomed programs with your (apparent) quantitative skills. There is an extreme shortage of good graduate students.
You *must* develop some sort of interest in some area of biomedical science and some knowledge. I am assuming you live in or near an area with major universities (hopefully several). I'd start with the bioinformatics people, but maybe you want to do some other sort of modeling. Find out who they are, then read their papers. Unless you are talking about the top universities, believe me, you will be able to get in. Even with a two-year Master's, you could get a job in industry if you choose your field well (hint: next-generation sequencing is only going to grow). Remember, at most places, Master's students in biomed are paid a stipend (at my school, 100% are paid).
To be blunt, though, I am somewhat concerned that you have not realized this, given that you comment on this blog - which tends to have pretty with-it people as commentators.
I don't know anything about comp sci grad school, but I'd imagine you would be a good candidate there too.
Probably commenting on this blog is helping you as much as it is helping me add references to the paper I'm writing (hint: not at all).


Actually I live near only one university and it's not really top-notch (I went out of town for school but I can't afford that again). I had considered taking a masters in either Operations Research or Computer Science there but on both counts I was told that they essentially only accepted students with undergraduate degrees in specifically in those fields - occasionally they make an exception for students with very strong academic recommendations but given that I wasn't a star undergrad I doubt that would happen. I have even less background in bio-medicine so I couldn't imagine that going anywhere. Despite not being top-tier I don't think even this school is hurting for graduate applications.

If you know R, Excel, SAS, etc. and are competent in modeling\statistics I find it hard to believe that you can't find a job, business is just desperate for people with those skills (provided you are a citizen \ have a green card). I graduated from a state school with a mediocre GPA in math\econ (2009) and had many job offers. If you're hard up for options in STEM check out marketing research companies, they particularly struggle to find quantitative manpower.

Any job I've seen in statistical modelling has wanted a minimum of 2-3 years experience and most wanted at least a masters degree. While I have used R and Excel VBA, most jobs I've seen like this want SAS (2-3 years experience using it) which is an expensive software package I can't really learn on my own. I've applied to a number of jobs of this type and have never heard back so I doubt they're all that desperate.

this is Mark from the earlier post again. Like I said earlier, I know nothing about comp sci grad school. I urge you to examine the possibilities of taking some courses to demonstrate your abilities (and maybe the GRE in comp sci, if it exists). There are almost always a few friendly professors or admission staff (for the department) that will give you blunt advice on getting in, given your situation. People really do change fields.
As for the biomed science, well, of course you know nothing right now. Schools are not hurting for applicants, generally - but they are hurting for applicants that excite them. Believe me, it's true. I know of a guy who started a Masters in Neuroscience at age 45 with an undergrad degree in Music (yes, music!).
If you read and understand the papers from a professor, he/she will generally be happy to talk to you (unless you choose Professor FamousWithBigLaboratory). Write an email saying "I read the following papers of yours and I have a few thoughts including X, Y, Z. I was hoping to meet you briefly to discuss." This is generally considered very impressive. You could suggest starting on a pure volunteer level after you meet with the professor. Tell them you are a physicist/whatever you are and are interested in changing fields.
The biggest thing, though, is you have to start looking how to solve the problem, as opposed to deciding it is unsolveable, if you forgive my bluntness.

The most interesting observation from Tyler is the sarcastic poke about jobs in DC vs. Nebraska/ N. Dakota. I agree that this woman doesn't seem unskilled and certainly has plenty of gumption. But maybe her problem is that she isn't looking for a job, she's looking for a dream/lifestyle choice of working as an activist in DC. And if she were happy to take something a bit duller (insurance agent?), she could be employable in Nebraska/ N. Dakota. Labour markets are sticky at least on the supply side.....

She has a good chance to get the kind of job she wants.

See these newspapers should contact ME if they want to talk to a young graduate who can't find any jobs I'm no Art History or Puppetry Major I'll shove the real story right down Tyler Cowen's throat.

Don't ever say something like that in an interview.

If his goal is to get his story published, it's a good plan.

Might not like the side effects, though.

You know what though my story would disprove Cowen's little theory that the joblessness of new graduates is all the fault of their educational decisions so Cowen would never dare to even comment about it on this blog.

So you just want an apology? Do you not believe it's the individual's responsibility to put himself in the situation he wants to be in? Do you think more progressive policy changes are in order? The Fed's had interest rates at 0 for a while and is still trying to find ways to make it profitable for a firm to hire you. How about if i tell you it's not your fault that you can't find a job you like?

I am not disagreeing with any specific point that you have made. I will also agree that Mr. Cowen's arrogance on the subject is annoying, given that it is his profession is contributing to the rise in tuition. I've sent him links showing how professors make up the significant portion of highest paid state employees, and he conveniently chooses not to address his profession’s culpability. No one here wants to point to the similarities between bankers and professors.
That said, I disagree with how you’re directing your energy. First, winning an internet thread war is pointless. Second, both of us lost out on following what we were told (by Tyler's generation) on what responsible adults do, namely, go to college and work hard.
I compounded the stupidity by listening again to what collective wisdom said and bought a house. I listened to the people who told me that as long as my mortgage was a quarter of my income, I had one years salary in the bank, and I stayed in my house for five years I would be fine, no matter what the market did. Five years later I have lost my job, spent my savings, lost a third of the value of the home, and am vastly underemployed.
I get it. You are pissed, but do you think your rantings will penetrate?
I am not interested in OWS. They have a reason for their failure. If that helps them sleep at night, fine. I want a path to success. I don't want to hear that I am failing because the job market sucks. That just tells me that I can't hack it when the bar gets raised. I don't care that things have gotten tougher; I want to know how to win anyway. This is how I think people in our situation should expend their energy.
Yeah, I agree that something should be done. I figure we’ve already paid off the people who are too big to fail. There is no justification for telling bankers that they don’t have to suffer for their stupidity and here is a trillion, while simultaneously letting others get screwed because “nobody made you sign that loan”.
I don’t ask that my loans get repaid. I do expect the recession profiteers be called out. I object to the people pontificating how the younger generation is all screwed up, because we want a life worth living. I resent that we are collateral damage to other’s greed.
I don’t share the belief that public rantings will change anything. I’d rather direct my energy to winning.

The Fed's policies don't do me a whole lot of direct good as I'm not American. I simply believe luck has a huge role to play so what the individual does or does not do is only a relatively small part of the outcome, I suppose people should try to maximize the tiny part they control but that doesn't necessarily lead to anything.
Let's be clear Tyler and Alex have a very specific agenda they're peddling with posts like this - it's not innocent commentary.

The reason that you have failed to find a job is becoming more and more apparent. Maybe if you spent half the time looking for work that you do whining on these boards something might turn up. A thought? No, no--the problem's with everything else right, not you at all. Nope, not at all.

I gave up on looking ages ago, I mean at this point it's been years since I graduated there's absolutely no chance now. I did all that searching, applying, interview stuff for a while and it didn't go anywhere.

"I gave up on looking ages ago"

Hypothesis confirmed. Whining priveleges revoked.

Seriously dude. You're winding yourself up with all this bitterness. You need to detach from the internet and find someway to approach life without broadcasting that bitterness to everyone. Coming into this forum and tying everything to your personal situation is 1. not good reasoning (anecdotes don't prove much, yada yada) 2. kinda pathetic, frankly. Not trying to be harsh, but it has grown tiresome.

Go talk to a shrink, you sound depressed. Companies dont like to hire depressed people and for good reason.

I am being a 100% serious here.

Don't you understand, this isn't about me - I'm just like many other people my age including many of my former classmates with the same or similar degrees. This is about Tyler Cowen's constant smearing of a generation trying to put the blame for their poor economic prospects not where it sound be economists such as himself for pushing misguided policies and the banking sector for spending years misinvesting huge sums of money but instead trying to contrive this story about how it's all about the choice of majors that's hurting these people.
He needs to be called out for this massive lie.

I assume I am barely (if at all) any older than you are. I graduated right into the financial crisis and very soon will graduate from a top tier MBA program right into the next (I do have a job to return to, so that is not that critical to me).

While my view is more Euro and Asia than US centric, let me tell you the situation still is nowhere as dire as 2009 when I look at this years' preliminary stats - even for US schools. As part of my job, I talk to recruiters quite often and let me tell you that there is and always has been and likely will always be a global shortage of qualified applicants and no, that is not defined by not having 10 years of experience in a technology that has been around for 4 years.

But again, whining won't get you a job, never has, in fact. So I think my point stands.

We often point out journalistic biases that are contrary to our point of view, so, in the interest of equal time, I have to say, any reporter who puts the phrase "and a pet rabbit named Mrs Krackers" into a description of an adult very likely does not have a high opinion of that adult..

Or, a very high opinion of the pet.

Or, has a very high opinion of the pet.

Breaking News Headline:

Student slammed in MR for a career choice of a major in which 93.1% of graduates in that major are employed after graduation: Who Will Feed Pet Rabbit?

"Not me. That student should have picked a major in which 97% of graduates are employed so as not to endager the Pet Rabbit, Mrs. Krackers.", a spokesperson for MR said.

In related news, Newt Gingrich is supporting efforts to have Mrs. Krackers placed in an orphanage as this student clearly made a bad career choice.

Here is the link for data on unemployment by majors posted earlier by John Chilton:

Why is There a Right Wing Media Bias Against Young Expressives?

It seems that with yesterday's post on the New York puppeteer, and today's post on the art historian who brought the banking industry to its knees, that econ/finance folks have it in for those who did better in art class than they did.

And, its not that the art types didn't offer to share the brushes with them. It's just that the econ/finance guys weren't very good with finger paint and mixed media: It didn't have the form and structure that they needed.

I think there may be another reason.

Expressives are attracted to demonstrations. Particularly if you can make art and puppets and be seen in the media.

Ask yourself: who are you more likely to see at one of these demonstrations of persons who share the same views: an unemployed finance/econ student OR an unemployed or underemployed artist.

Who would be more likely to put on his/her Facebook page a picture of themselves in a OWS demonstration: an unemployed econ/finance student OR an unemployed or underemployed artist?

So, maybe the bias is from two sources: a failure to understand the expressive, and, from those who even agree with them in the finance/econ group, a failure to connect with the method of expression.

Or not.

It's not a bias against Expressives per-se it's that they want to craft a narrative where unemployment is a supply side problem because all the graduates are studying puppetry and art history and no one is studying science but if only the acquired the skills that are in demand then the jobs would come easily. Or NOT.

Their employment prospects are not that much different from Econ majors, so your narrative story doesn't hold. In fact unemployment rates for an Econ major are higher than for an art teacher and close to an art history major.

Not my narrative, Tyler's. And I'm well aware it doesn't hold.

Perhaps Tyler is saying the average econ literate person does better for himself, in both a decision making sense and quantitative/analytical skill set. It's too bad the average econ undergrad student knows very little about economics.

You're right they're not big fans of demonstrations, public protests, or free speech in general - unless it's people using speech to confirm their biases then its all good. Otherwise find some excuse to lock the protestors up and severely punish them.

Professor Cowen,

Could do a few posts, if time permits, on your opinion on or studies on the effect of college major on employment.

Thank you.

I don't know what Tyler will tell you, kid, but if he tells you to pursue an econ major (unemployment rate of 6.3% for graduating seniors) you'd better protect yourself by double majoring in art education (unemployment rate of 4.2%).

Think twice if he offers you a loan but not if he offers you an easy A.

Enough with the unemployment rates by major. Wages matter, and math\econ\comp sci pay much better than art history. Surely that is important to determining whether you can pay back student loans?

How can something pay less then zero?


Is that true?

Let me ask this question: when you take out a student loan, and you know what you will earn with that degree, do you think it wise for someone else or a third party to intervene with the market decision of an individual to accept a lower wage, holding unemployment rates constant for alternative degrees?

You guys really are control freeks.

Next you will want the education secretariat to allocate loans only to those who make the most, not those who are willing to accept less.

Of course the choice of major should impact loan allocation, as it impacts the probability of repayment (via the change in future income stream from choice of major).


The market takes care of that. We don't need anybody to allocate.

Say you know that an art degree generates x dollars and you need y dollars to get a degree and begin paying an interest rate of z% over the life of the loan after you graduate. You subtract loan payments from expected income (adjusted for unemployment risk) to decide if this is a worhwhile investment relative to other alternatives..

I am sure even a guidance counselor could do it.

Even The Economist isn't buying into Cowen's line

No one is picking up on the North Dakota theme. I'm guessing she stays in DC partly because she thinks she'll find a rewarding job there and partly for the lifestyle. I would call that consumption. She could probably find a job in North Dakota using those excellent organizational skills, but she chooses not to.

Reposting my reply at the bottom of the thread:

I’ve worked at jobs in a boomtown and getting a job is easy. It’s finding a place to live that’s difficult. When I say “place to live”, I don’t mean a nice place to live with a swimming pool and gym. Apartment complexes? Full. Hotels? Full. Dumpy motels that are typically inhabited by people recently released from halfway houses after serving their jail terms? Full. Campgrounds? Full. Roommates? Already have a guy sleeping on the couch. Full. Sleep in your car? In minus 5 degree winters? Are you kidding? Illegal. You’ll be thrown in jail, but you’ll have a warm place to sleep. That is, if the cop doesn’t just beat the snot out of you and leave you for dead in the minus 5 degree winter. Not an option.

Ugh - I'm not sure that folks in the comments are accurately reading Tyler. He indicates sympathy for some of her choices and notes that it's significant that even someone with her organizational and media talents is struggling for work. He also notes that she doesn't really seem to be striving for work in the first place.

This all seems accurate. Molly seems employable, and in fact the major reason for her current underemployment is probably that she is 'holding out' for a dream job as a left-wing activist in Washington.

The note about ND is in this vein - of course Molly wouldn't move to ND for a job. It's not a "job" that she wants. If that's all she wanted, she'd have one already. It's a very particular kind of job that she wants, and Tyler suggests that she just might get it... eventually.

The note about her lack of qualification in capital theory is completely justified. As a person who worked through college in order to avoid loans, I'm not too sympathetic to her loan situation.

In the end, I'm not to sympathetic at all. I'm a BofA customer, but I don't have/use a debit card. Even if I did, a $5 fee would be the least of my problems in the world. While I don't object to her debit card crusade, her inability to understand concepts like interest, opportunity cost and moral hazard lead me to fear that her "activism" will mostly be in the direction of making life worse for me (and "us"), not better.

Two additional notes:

1) To the commentators complaining that Molly should have some fundamental right to employment that she loves rather than just a "job..." Well, that's a consideration that I'd meet with sympathy had she not committed to repaying a loan to someone else. Honor your obligations - THEN chase your dream.

2) To CBBB, Tyler isn't your problem, though thinking that Tyler is your problem may be a good part of your problem. The economy isn't even your problem, at this point. The economy is *a* problem. It makes things harder, not impossible. Remember saying: "grant me the serenity to accept what I cannot change, the courage to change what I can, and the wisdom to know the difference?" You can't change the economy. You can change your behavior. A question for you: do you think that there exists in this country a group of people who a) graduated in your year, b) with your major, c) with a GPA at or lower than yours and d) have jobs? If so, what do you think are some differences between you and them and what might you do to close that gap? If not, why is unemployment not WAY higher?

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