NHEG-January-February2022

January - February 2022
NHEG EDGUIDE January - February 2022
Since bachelor’s degrees carry a significant signaling function, there have been substantial increases in the number of
job seekers possessing a 4-year degree. Retention rates for 4-year institutions reached an all-time high of 81 percent in
2017. In 1940, 4.2 million Americans were 4-year college graduates. Today, 99.5 million Americans have earned a bachelor’s
degree or higher. These numbers demonstrate the sharp increase in the number of Americans earning college
degrees.
Today, nearly 40 percent of all Americans hold a 4-year degree. Considering the vast increase in college attendance and
completion, it’s fair to question if a college degree has retained its “purchasing power” on the job market. Much of the
evidence seems to suggest that it has not.
What is Credential Inflation?
The signaling function of college degrees may have been distorted by the phenomenon known as credential inflation.
Credential inflation is nothing more than “… an increase in the education credentials required for a job.”
Many jobs that previously required no more than a high school diploma are now only accepting applicants with bachelor’s
degrees. This shift in credential preferences among employers has now made the 4-year degree the unofficial
minimum standard for educational requirements. This fact is embodied in the high rates of underemployment among
college graduates. Approximately 41 percent of all recent graduates are working jobs that do not require a college
degree. It is shocking when you consider that 17 percent of hotel clerks and 23.5 percent of amusement park attendants
hold 4-year degrees. None of these jobs have traditionally required a college degree. But due to a competitive job
market where most applicants have degrees, many recent graduates have no means of distinguishing themselves from
other potential employees. Thus, many recent graduates have no other option but to accept low-paying jobs.
The value of a college degree has gone down due to the vast increase in the number of workers who possess degrees.
This form of debasement mimics the effect of printing more money. Following the Law of Supply and Demand, the
greater the quantity of a commodity, the lower the value. The hordes of guidance counselors and parents urging kids
to attend college have certainly contributed to the problem. However, public policy has served to amplify this issue.
Various kinds of loan programs, government scholarships, and other programs have incentivized more students to
pursue college degrees. Policies that make college more accessible—proposals for “free college,” for example—also
devalue degrees. More people attending college makes degrees even more common and further depreciated.
Of course, this not to say brilliant students with aspirations of a career in STEM fields should avoid college. But for the
average student, a college degree may very well be a malinvestment and hinder their future.
Incurring large amounts of debt to work for minimum wage is not a wise decision. When faced with policies and social
pressure that have made college the norm, students should recognize that a college degree isn’t everything. If students
focused more on obtaining marketable skills than on credentials, they might find a way to stand out in a job market
flooded with degrees.
Source: National Review
https://www.nationalreview.com
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