Inflation & Deflation
If you follow the news, you know all about the inflation that’s been wracking our economy for the last couple of years. Even if you don’t follow the news, you feel it every day with just about everything you buy costing more. Inflation is what happens when too much money chases too few goods and services. Our current economic mess stems in large measure from global supply disruptions largely caused by the Covid pandemic and made worse by the war in Ukraine (too few goods) – coupled with enormous government spending (too much money).
One particular expense that has been inflating for a long time, even before Covid and war sent global economies spiraling out of control. That is the cost of a college education. Colleges and universities have been raising tuition, fees, and other costs with little restraint. The main reason is an almost unlimited supply of money available via student loans, including so-called Parent Plus loans that sock it to parents.
This wouldn’t be so bad if product quality were similarly inflating. In fact, the opposite holds true. The value of a college education is deflating for most graduates. For instance, grade inflation has run rampant for many years, to the point where studies show around 40% of all grades passed out in college courses are A’s. The same phenomenon exists in many high schools, which is why many colleges and universities have relied on entrance exams like the ACT and SAT to determine who to admit. Nowadays, many schools are getting rid of those requirements because of disparities among racial and ethnic groups. So, they are admitting too many students who aren’t capable of handling the coursework. The response in many cases is to dumb down the curriculum. Education is deflating at a rapid pace.
The trades are also experiencing inflation, in a positive way. Wages are going up for trade workers who are in short supply almost everywhere. Even if you have to pay for a trade education, the cost is much less. The Simple Dollar, a website that analyzes financial data, pegged the average cost of a trade education at $33,000, compared with $127,000 for a typical bachelor’s degree.
In many cases, a trade education costs nothing. Most apprenticeship or employer training programs will pay you a modest income while you learn on the job, then jack up the pay dramatically when you achieve the desired certification.
Think about that. A free education leading to a well-paying career. Not many colleges can offer that kind of deal.