Stamatakis: Don’t judge majors by their unemployment rate

By Nick Stamatakis

Although China has seemingly little in common with the United States, one problem unites… Although China has seemingly little in common with the United States, one problem unites students in both countries: unemployment among college graduates. In both places, graduates are not enjoying the benefits a degree once imparted.

America’s conversation has been pretty muted in terms of specific solutions to this problem, and much more muted in terms of actual action. Any debate that does occur typically concerns itself with increasing or decreasing federal loan programs. China, however, with its typical swiftness and efficiency, recently announced its solution: Every major will be evaluated in terms of its unemployed students two years after graduation. If a major’s graduate-employment rate is less than 60 percent for both years, it’s department either gets cut or severely downsized.

Many people in America would probably love to implement this policy. Those on the left might see it as a perfect example of a government action speeding up market forces to make the country better. Clearly, the market is failing in China, with too many students going into majors with no prospects. China is simply doing what the market would eventually do.

I can also see this plan gaining traction on the right. As in China, the government here either directly or indirectly subsidizes much of our education. The Chinese solution ensures we won’t get free rides on the subsidization — if you want to spend four years pursing a B.S. in puppetry with potentially limited returns, you won’t get a cent of taxpayer money.

Luckily for students in the least employable fields — which, according to census data, are clinical psychology, fine arts and United States history — there is little chance such a plan would ever be implemented in the U.S. American federal education officials simply don’t have the centralized power to implement broad changes. However, a more plausible avenue does exist: Simply cut federal loans to programs with a certain level of unemployment.

Although no presidential candidate is currently proposing this, it would not be a surprising development. Given the appeal to both sides and an increasingly tight federal budget, it wouldn’t be out of character for either Newt Gingrich or Barack Obama to develop a plan that increases the effectiveness of federal dollars in such a fashion.

But appealing as it might sound — especially to students and voters with more-employable majors — the logic behind this plan ignores the intrinsic complexity of civilization. Most good things are obviously beneficial in retrospect, but their development couldn’t have been predicted. Even with a seemingly modest degree of picking winners and losers, many positive outcomes that result from both chance and interpersonal interaction could be lost.

For example, one of the least-employable fields in China right now is biology. As such, biology departments will be cut if things don’t change. The possible repercussions of such a decision are endless, as China could miss out on the biotechnology boom — that is, if it ever happens — or even some important health advancements. Of course, there’s also the possibility that the market will eventually create an environment where biologists aren’t needed anyway. But why should this be rushed if the outcome isn’t a guarantee?

In the U.S., too, we might lose out by just cutting one field. Take psychology. Although its mean unemployment rate might be high now, it’s possible that psychology’s positive contributions can outweigh this. Cutting psychology in the years following WWII would have prevented advancements in human factors, engineering and education — all of which were unforeseen.

The danger in these top-down decrees is that unintended consequences, both positive and negative, are typically what govern progress. Seemingly shrewd politicians created mortgage tax credits in the 1990s and 2000s because it seemed like a sound strategy. They had no idea it would create a housing bubble. Other technocrats — with the admirable intention of helping the environment — created corn subsidies that contributed to unrest in Mexico and other countries when prices elsewhere shot through the roof.

So before anybody starts cutting certain majors at a national level, we should remember that there are unexpected consequences to everything. Even doing something as simple and seemingly logical as de-incentivizing or eliminating “bad” majors is more likely to stifle innovation than solve any budget or productivity issues.

Contact Nick at [email protected]