College Dropout Bill Gates: Please Stay In School

Bill Gates is worried that not enough people are graduating from college. Georgetown University's Center on Education and the Workforce predicts that the U.S. will be short 11 million skilled (college educated) workers over the next 10 years to fill positions that require a college degree. And even though Gates didn't graduate from college himself, he's concerned about the job prospects for non-college grads. By 2025, two-thirds of jobs will require a college degree. And as Gates says, 

College graduates are more likely to find a rewarding job, earn higher income, and even, evidence shows, live healthier lives than if they didn’t have degrees. They also bring training and skills into America’s workforce, helping our economy grow and stay competitive. That benefits everyone.

And he's not wrong. In addition to the personal benefits of a degree, the country does better as a whole when more citizens have experienced the mind opening, horizon widening, education that comes along with a college degree. ATTN: recently covered the economics of it here. Personally, I would love it if everyone who voted had taken at least a couple of economics courses and maybe an empathy-building dance or poetry class.

So why aren't more people graduating college? 

A weak job market and flat wages. Many college graduates aren't seeing an immediate financial return on their investment like in prior eras, which is daunting. 

Gates is correct when he says that we need more people to graduate college to narrow the "skills gap" and benefit the overall economy. But unfortunately, the economy isn't set up to support those workers once they graduate. Most of the fastest growing jobs are low paying, even if they do "require" a college degree. Sure employers can require someone to have a college degree to be an office clerk, barista, or retail worker all they want. But that doesn't mean that you need degrees to do those jobs, or that workers will be able to afford to pay off their student loans with the low salaries employers are offering for those jobs. Recent college grads make an average hourly wage of $19.64 for men, and $16.56 for women. The ridiculousness of that gender gap aside, neither amount is enough money to make average student loans payments on.

In 2014, 44 percent of recent college grads were underemployed (employed part-time because they can't find full-time work, or over educated/qualified for their position), that number has been on the rise since 2001.

The lack of immediate return on investment on college degrees disproportionately impacts people of color, who due to systemic discrimination receive an even lower return on degrees than whites. For every dollar Black grads accrue as a result of having a degree, white grads accrue $11.49. For every dollar accrued by Latino families as a result of a degree, white grads accrue $13.33. Regardless of race, the opportunity costs of college (tuition, student loans plus interest, and lost wages while attending), means that, despite earning higher wages, all graduates' spending power often isn't that much more than non-grads at first, and can even be less (especially for advanced degrees). 

What can we do to make more people graduate college?

As Gates points out, many college students are dropping out before they can even graduate because of financial issues. Bill Gates suggests that we focus, not only on why people don't go to college, but on correcting the issues that make people drop out without graduating.

It’s always moving to sit down with students and hear the stories of why they decided to drop out. Many of them are poor and often the first person in their families to go to college. They arrive on campus with big aspirations to get a degree and start a career that would earn a good salary. Then their dreams unravel.
Many quit when they realize that their high schools didn’t prepare them academically for college. Some don’t make it because they can’t afford tuition. Others leave after getting overwhelmed trying to navigate the college system without enough personal guidance from their college. All leave school with a lot of debt and, even worse, a diminished sense of themselves. Their entire sense of what they can achieve in life is damaged.
The fact that a high percentage of people who don’t finish college are from low-income backgrounds should be a concern for all of us. Without degrees, they are more likely to stay trapped in poverty. At the same time, the scarcity of skilled workers in the labor market drives up wages for those with a college education, worsening income inequality in America.

The issues he's pointing out are all structural: public secondary education, the ever rising astronomical costs of tuition (that leads to the rising demand for student loans), and a lack of college guidance. Employers also contend that even when students do graduate, they do so without the skills needed to succeed in the marketplace (referred to as the skills gap). While people disagree whether or not the skills gap actually exists, there is at least a perception among employers that it is difficult to find enough employees with the skills they need to hire them. Unfortunately, a lot of the skills that businesses are looking for aren't covered in college, either because the market is changing too rapidly for colleges to keep up, or because it is specialized training that used to be (and arguably, should be) offered by the businesses themselves, and sometimes because the skills (like basic math or reading) should have been acquired before college. 

People who are choosing not to attend, or finish college, are actually making a fairly rational short-term economic decision in today's market. Yes, college is still worth it. The benefits of a degree are more than just financial, and college grads still have a financial advantage over non-grads. But in today's economy, student loans, stagnant wages, and slow job growth in well paying industries, means that the individual financial incentive to get a degree is now smaller than in previous decades. If, as Bill Gates suggests, we need more people to get degrees for the overall good of the economy we need to support them with better education before college, lower college costs, spend more money on job training, and pay better wages.