Pages 35 and 36 of this past week’s St. Louis Business Journal caught my eye. Page 35 dealt with the pressing question of “What’s your favorite beer?” And page 36 was the continuation of an article dealing, in part, with the rising cost of college tuition. “Hmmm,” I thought…“Beer and school – the two greatest costs to young people.”
Sadly, one of them has no return on investment, and the other’s return would appear to be muted by the duration of an economy turned sour. Hopefully, you can discern which is which!
In an economy where wage growth is muted, headline inflation outpaces real wages, and tuition costs in public universities are increasing eight percent per academic year, you can quickly deduce that good ol’ mom and dad are actually losing ground in helping their precious offspring gain a higher education. There’s a good chance that the eight percent increase could move even further north given the cuts in state funding.
Thus, there is a good chance that Junior will graduate with debt out the wazoo (that’s the official term, by the way). Sadly, with much of his future wealth accumulation mortgaged against his recent past, Junior will set out to find a job that starts at virtually the same wage today as was paid four years ago when he was sitting in Freshman Orientation. OUCH! But even tougher is the fact that your baby is entering an environment where every open position has a little over four applicants. Competition demands that Junior perform at a very high level.
There’s a good chance that, unless Junior is a superstar, he will be lost in a stack of resumes a foot deep on some poor HR person’s desk. He’ll be looking for a chance to start somewhere on the lower end of the org chart in hopes of reaching for the middle rungs in as short a period of time as possible. College grads today have watched their tuition rise 24 percent from their freshman year through senior year. By the way, that’s a 24 percent increase on an already big ticket item. Think 24 percent over three years multiplied against the cost of a new car.
I only have a couple of questions: 1) If wages don’t keep pace with cost-of-living, and to make said wages demands that you fall into deep debt before you’re 22 years of age, what is the length of time before a “real” return on investment is realized? And 2) how much will my four-month-old grandson’s college education cost?
Now for the beer discussion. It kills brain cells, that kills grades, that kills chances to move up the resume stack. The lesson here is to stay away from your favorite brew and crack the books really, really hard. The immediate future is out of whack. Competition is brutal. Save your beer money for your student loan payments – it appears as though you will need it.