29-year-old Zack Morrison received his Master’s Degree in Film Arts from Columbia University in 2018. In an interview with The Wall Street Journal, he revealed that his loan balance, including accrued interest, was close to $300,000. However, his annual income as an assistant and part-time worker in Hollywood only ranges from $30,000 to $50,000.
Have you noticed that just like the purchasing power of the money you work hard for, the value of the degree you work hard for is also depreciating?
From Columbia University Master’s Degree graduates unable to pay off their student loans to recent reports of “spending $1.4 million to study in the US, but only earning a salary of $4,500 after returning to China,” there have been increasing discussions on the depreciation of degrees.
According to surveys, graduates from Columbia University’s film program apply for a median of $181,000 in federal student loans. However, two years after obtaining their master’s degrees, half of the recipients earn less than $30,000 annually.
In addition, The Wall Street Journal’s analysis of data from the US Education Department reveals that in recent years, top-tier schools with programs similar to Columbia have awarded thousands of master’s degrees, but the early career income of these graduates is not enough to begin repaying their federal student loans.
Even Dr. Bryan Caplan, an economics professor at George Mason University, published a book titled “The Case Against Education,” using calculations to point out that the education system wastes a lot of time and money.
The depreciation of degrees, also known as degree inflation, is a global phenomenon.
Worldwide Education “Inflation”
In Europe and America, jobs that used to only require a high school diploma, such as construction site supervisor, loan officer, insurance agent, or office assistant, now require a bachelor’s degree.
Jobs that used to only require a bachelor’s degree, such as government department head, university counselor, or tourist guide, now require a master’s degree.
Jobs that used to only require a master’s degree, such as laboratory assistant or community college lecturer, now require a doctoral degree.
And jobs that used to require a doctoral degree, such as university professor, now require postdoctoral research qualifications.
The situation in China is similar. The deputy director of the Nanshan District Street Office in Shenzhen has a PhD from Harvard, while top students from China’s best universities have become standard elementary school teachers in first-tier cities. It is said that out of 7 million food delivery drivers in China, only 1% are master’s degree students, about 70,000 people.
Thirty years ago, vocational school students were considered government officials and could become leaders in their units. Now, graduate students can only be considered beginners and must have a PhD from a prestigious university to be considered impressive.
Cui Xiangqun, a member of the Chinese Academy of Sciences, said that graduate students today are no different from vocational school or junior college students in the past.
This education inflation is most evident in American presidents.
Over ten of America’s early presidents had no higher education experience. George Washington did not have a university degree, and Lincoln only received one year of formal education.
In the past century, American presidents not only had to graduate from college but also needed a graduate degree. Wilson had a PhD; Kennedy, George W. Bush, and Trump had MBA degrees; Roosevelt, Nixon, Ford, Clinton, Obama, and current President Biden all have law degrees. Even Biden’s wife has a PhD in education.
Without a graduate degree, it is difficult to imagine running for the American presidency.
The requirement for leaders’ educational qualifications is the same in ancient Eastern countries. We won’t elaborate on it, but just imagine the educational backgrounds of several generations of leaders, and you’ll know that it’s no different from America.
Why does the phenomenon of “degree inflation” occur in China?
According to data from the Ministry of Education, the number of candidates taking China’s National College Entrance Examination, or “Gaokao”, exceeded 10 million in 2019, compared with only 1 million in the 1980s. Meanwhile, the number of graduates from Chinese universities reached a staggering 8.3 million in 2019, up from just 570,000 in 1986.
This increase in the proportion of the population receiving higher education is a result of the overall improvement in the country’s education level. However, the rapid increase in degree supply has inevitably led to a devaluation of educational credentials. This is a positive outcome, as it reflects the popularization of education and the specialization of society. The development of a society is marked by the level of professionalization in its workforce.
Decades ago, many doctors in Chinese hospitals were untrained, but today many are highly educated graduates from top universities. The same trend can be seen in the education level of secondary school teachers, who now have undergraduate or postgraduate degrees instead of just vocational school qualifications. This improvement in education level has brought greater confidence to society.
On the other hand, according to the principles of economics, degree inflation, like currency inflation, is caused by the imbalance between supply and demand. In other words, there are too many candidates competing for too few job vacancies. Therefore, employers use educational qualifications as a screening criterion. As a result, the higher the degree requirements, the more people are eliminated from the competition, leading to a phenomenon known as “degree inflation.”
This trend indicates that the job market in China is becoming increasingly difficult, and upward social mobility is becoming more narrow. When input increases, output decreases. As more resources are invested, efficiency decreases, and although the total output increases, social development shows signs of stagnation. This phenomenon is called “growth without development.”
Clearly, many positions do not require high educational qualifications. The increasing demand for higher educational qualifications by employers only demonstrates intensifying competition, and there is no better excuse to eliminate so many job applicants.
Chinese and Western universities are both following the trend of the devaluation of degrees. Universities are pushing this trend by producing an excessive number of highly educated “talents” that society does not actually need. The demands of universities do not always align with the demands of society.
Universities must constantly expand to receive more resources from the government and society, strengthen themselves, cultivate more students, and increase their influence. Continuously increasing enrollment and establishing new colleges, promoting department heads to deans, and allowing universities to expand are all in the interests of universities. The expansion of higher education is an intrinsic need of universities.
Whether students can find jobs after graduation is not the core interest of universities. In other words, universities are more like companies, providing educational services. Students are customers, the purchasers of services. After completing the purchase, sellers do not need to consider the marginal benefits and cost-effectiveness.
As long as there is an opportunity, universities will strive to expand their capacity. After all, if you do not expand, other universities will. If you do not take advantage of the opportunity, other universities will. A few universities’ decisions to streamline their organizations and reduce enrollment cannot change the trend of degree inflation.
On the other hand, ince degrees indicate social status, graduates generally do not destroy their own reputation, even if they have learned nothing at school. After all, damaging the reputation of the university is also damaging their own personal brand. Once the educational service transaction is complete, the interests of the buyer and the seller magically become linked.
Unlike general business, even if diploma inflation is severe, universities do not have to worry too much about customers leaving negative reviews. After all, as long as the school is not too bad, graduates usually look back at their alma mater fondly, like a child looks back at their mother.
For students and parents, being forced to purchase degrees with diminishing cost-effectiveness is a necessity. In a society of fierce competition, increasing investment can only bring marginal growth. However, if investment is abandoned, the consequences may be disastrous.
Because the way out of society is becoming narrower and narrower. Having a degree does not guarantee success, while not having one may lead to a dead end.
This is why both Chinese and Western universities are cultivating too many masters and PhDs that society does not need. As a result, many PhDs in humanities and basic natural sciences cannot find jobs after graduation.
University degree holders in China are facing a trend of declining value in their educational qualifications, with increasing numbers of PhD graduates struggling to find employment and earning lower salaries due to an oversupply of qualified job seekers. The situation has led many to believe that pursuing a PhD is a waste of time.
Another factor contributing to the devaluation of degrees is the changing public opinion towards education. Decades ago, degrees were not viewed as a source of honor, and those who spent their time in ivory towers were seen as out of touch with the real world. However, today’s society places a high value on education and qualifications, leading to a positive feedback loop where more people are pursuing higher degrees.
To stand out in a crowded job market, some individuals are pursuing DBA degrees at prestigious US universities, but these programs have been criticized for their high costs and watered-down curricula. As a result, earning a PhD from a top university is no longer enough to secure an elite position; it is now considered a baseline requirement.
To address this issue, individuals should consider obtaining a solid undergraduate education as a minimum requirement for most professions. Pursuing a PhD is not suitable for everyone and should be considered only after careful research into the discipline and employment prospects. Additionally, individuals should evaluate the opportunity cost of pursuing a PhD, as it may come at the expense of other career options.
Short-term master’s degree programs may also be a viable option, especially if they offer practical training that will improve job prospects. In the end, while education is important, true achievements and success come from real-world experience and accumulation, regardless of how competitive the society may be.