The New Underclass: Poverty in an Era of Overqualification

My friends and me are part of a new underclass, I would like to explain to you why this is. To start with and get it out of the way, we’re white. That’s an advantage, not a disadvantage, you’ll say. In reality, it’s a bit of both. Compare being poor in Sweden, to being poor in Somalia. The poorest farmer in Somalia generally has a tight-knit family, a strong cultural context and an occupation to which he can devote his life. The poorest Swede will have a higher standard of living, without a doubt, but he doesn’t have a context within which to live. Being poor in the West as a man means not having children, as a woman it means never marrying. This sets a person up for loneliness and misery later in life.

Perhaps most importantly, being both white and poor leaves you stuck between a rock and a hard place. Society has specific programs aimed at emancipating women and ethnic minorities. White men from working class families on the other hand, are largely left to their own devices. White working class boys in Britain are least likely to attend university for this reason. There was an era when socialists sought to represent the interests of the working class. With the rise of the new left in the 1960’s, class struggle gradually became a non-issue for the modern left, thereby creating a new niche for the right-wing to exploit. So, to be white, without significant social and cultural capital, puts us at a disadvantage.

Another problem me and my friends run into, is that we’re reasonably intelligent and passionate. The education system in most Western societies, segregates teenagers according to their level of intelligence. Those with little cognitive capacity are trained from an early age to carry out manual labor jobs, spending a few days per week at an internship from around the age of 16. Those who are better capable of learning are sent off to college. There they are encouraged to study something they enjoy. This makes perfect sense, as you’ll have to spend four years studying. You won’t find yourself able to spend those four years studying something you don’t consider interesting, surrounded by people with very different personalities.

What this means is that those of us who are incapable of learning without strict assistance, enter the labor market around the age of 16. They begin to build up savings, until eventually they receive a contract at their employer that allows them to get a mortgage and buy a house. What about those who are studious? In the best case scenario, they’re strongly motivated to earn money. This means they’ll study something along the lines of economics or computer science. On the other hand, those who have an interest in other subjects, like music, literature, archaeology, (art) history, philosophy, anthropology, English, sociology or theology, will still need to eat.

You might argue that we have ourselves to blame. “If you wanted to earn a living wage, you should have focused on learning coding rather than learning Native American basket-weaving!” I think this is an unfair assessment of our situation however. Historically, we wanted people to have a well-rounded education. The reasons for this were the same as today. A woman of high social standing was taught foreign languages and how to entertain guests, for example by playing the piano. If I’m going to find myself a wife, I’d like her to appreciate Yeats or Lord Byron, rather than effective use of brackets or object-oriented PHP. Modern jobs are highly technical and appeal to cold, hard, rational and unemotional people. We can’t genuinely expect eighteen year olds to have the mental discipline to prepare themselves for such a sordid future. The European Union spends vast sums of money on marketing campaigns, to get girls to pursue technical jobs. The reality remains however, that a normal healthy girl would much rather read Jane Eyre than Javascript. It’s impolite to state this, mostly because it’s so self-evident to us.

Upon graduation, in the most optimal scenario around the age of 22, they enter the labor market, with no genuinely relevant skills. Employers have a limited range of jobs that need to be filled, for which they’ll ask very specific degrees, in subjects like computer science and accounting, subjects that very few people actually happen to study. What we tend to find, is that those of us who studied a subject that doesn’t specifically prepare them for a particular kind of job tract, will end up entering jobs that don’t require a college degree in the first place. We’re now at a significant disadvantage. Once we take such a job, it means we can abandon the hopes we had of finding any sort of job in whatever tract we were educated for. You’re a fresh political science graduate who hoped to find a job at an NGO? Once you accept a job unrelated to your degree, you can wave your hopes of landing such a job farewell. Why hire you, when someone can hire a fresh graduate instead?

If we take the best case scenario, you’re entering a job related to your study subject, around the age of 22. You’ll probably have a debt due to the four years you spent at college, whereas your less cognitively skilled peers spent those four years paying off a mortgage, advancing in their career and/or building up savings. Chances are however, that you don’t manage to graduate within four years. You might change your major, you might fail some classes, you might find yourself simply feeling too miserable to study. Perhaps you’ll graduate within five years, or you wake up around the age of 26 to find yourself pondering whether to continue to try to graduate, or to simply enter the job market instead.

Whatever you do by then, you’re screwed. If you’re going to apply for a job, you’ll have to convince employers they should hire someone who fails to complete a four year degree in four or five years. You might have learned 80% of the knowledge learned by someone who finished his history degree, but an employer won’t see your experience in college as valuable. You begin to discover that the five years you spent at college didn’t just cost you money, they turned into a liability for you. An employer doesn’t care whether you know when the Great Schism took place or who the native inhabitants of Puerto Rico were. An employer cares about your degree, not due to the knowledge you gained, but because of the signal it sends that you can dutifully carry out a task without complaining. Signaling that you have the knowledge and cognitive capacity required but nonetheless failed to jump through the last few hoops, signals that you’re potentially going to cause trouble in the workplace and probably can’t be trusted with responsibilities that have significant consequences and require discipline.

You might argue that as a college graduate, your lifetime earnings will be much higher than they’ll be as someone who attends some sort of vocational school. This however, is a lie of omission. To start with, there is a vast difference in income between college graduates. A college graduate like Jamie Dimon has a 30 million dollar annual salary. Among college graduates there is greater variance between salaries, much greater than among non-graduates, so it’s always necessary to look at the median income of graduates, as a successful minority of graduates distorts the picture. Perhaps most important is to realize two other facts, which is that pre-tax salaries aren’t very interesting to look at. We want to know what someone is earning after adjustment for taxes and various subsidies they receive. In European welfare states, earning too much salary means you’ll end up losing various subsidies that pay for your children’s daycare, your health insurance, your rent and various other expenses.

In addition, we have to be blatant here and point out that it doesn’t really matter to me whether I’m statistically speaking going to earn a bunch of money by the time I’m 45. At age 45 I’m supposed to have left the relationship market, settled down, bought a house, started a family and spend five days a week waiting for the clock to pass 5 PM. A woman in her late twenties who’s considering starting a family doesn’t care she’ll theoretically earn a lot of money by the time she’s 45. She needs a decent wage straight away. If you wonder why girls’ education magically reduces their fertility despite the college professor teaching nothing about contraception, this is the cynical explanation: A woman stuck with college debt earning a meager wage is going to choose to abstain from reproduction. Finally, the promise that college graduates earn more at older ages, is based on patterns from the past, when far fewer people had a college degree than today.

The bigger problem we face however, is that as young people, we no longer have the flexibility people used to have, due to degree inflation and credentialism. Personally, I’m lucky enough to have found a job in IT I could roll into due to skills I taught myself. Most of my friends and family, are not as lucky. In the past, not having the necessary specific knowledge would allow you to gain on the job training. Employers might give you an intelligence test beforehand or have you perform an unskilled job, to see if there’s any point to teaching you. Today, they have little reason to bother. Why should you hire someone and spend money to train them, if you can hire someone who has  a degree in accounting?

Perhaps worst of all, even someone lucky enough to learn the knowledge through his job, effectively finds himself stuck at his job. If you learned to do HR at your present job or manage a salary administration, you’ll find that applying for such a position at other companies leaves you facing requirements for relevant four year degrees you don’t have. You were trained in cultural anthropology, not in HR. In my own case, this means that I don’t have genuine flexibility. If I found a partner in another country for example, I couldn’t relocate, as credentialism prevents me from finding a job qualitatively similar to the duties I carry out at my current employer. For me, it would likely mean starting at the bottom of the career ladder again.

When I look at my father, he earned a driving license in the military that allowed him to drive practically any vehicle, despite having no experience with any of those vehicles. He has extended those licenses ever since, so when he lost his job he could drive a truck, without needing specific training. If I wished to drive a truck myself, I’d have to seek out a specific license at great cost. Optometrists in the Netherlands too have a profession you could once learn through the job itself, but today requirements are being introduced for four year degrees, as the companies market themselves by arguing that all their personnel is qualified, despite the machine doing all the actual work.

The future of credentialism

The problem we’re faced with is that everyone in a particular profession benefits from raising the barriers to entry. As a lawyer who attended law school and passed the bar, you don’t want people who didn’t attend law school to join the pool of lawyers looking for clients. People themselves however, don’t benefit from this. When I look at my parents generation, I see people who studied art history and found prominent jobs in banking and other places. Today no such thing happens. If you earn a degree in a particular field, you’re lucky if you find a job within your field and you’re unlikely ever to change fields in your life. The flexibility in employment people had in the past, is lost today. The university took away your freedom to switch careers, unless you’re willing to hand over another four years of your youth to Moloch.

We see instead a significant crisis of youth unemployment. We might imagine this to be due to technological change, but this thesis is still controversial. For most of human history, technological advances led to increased wealth, increased consumption and new professions that created labor. Today this trend might have been broken, or something else could simply be causing our crisis. In most Western nations, we’ve seen a significant rise in burn-out symptoms. Why does this happen? A simple explanation would be that although the total number of jobs is decreasing, the pressure placed on people due to their workload is increasing for those with full time jobs. If you need a specialized four year college degree to perform generic office labor, it’s no surprise the pool of those available to perform the office labor is in decline, while those who do perform the work find themselves under growing pressure and suffer from increasing workloads.

I believe this is a problem that directly contributed to the Great Recession and the economic stagnation that followed it. A significant demographic of young people has been excluded from the labor market, by virtue of the fact that they can’t carry out the kind of jobs they would be considered perfectly qualified for forty years ago, when a college degree wasn’t yet seen as essential for the job. Those young people don’t spend money, they attend college and attempt to live frugally with the money they borrow. The productivity of companies is hurt as a consequence, while the jobs themselves become stressful enough to leave people physically ill.

The suspicion I have is that credentialism isn’t going away. There is no clear negative feedback loop I can identify, that would lead people to abandon their insistence on formal qualifications for all sorts of jobs. Those who have specific jobs, have a direct incentive to secure their own position by barring candidates without relevant credentials. Nobody plans on devaluing his own occupation. Instead, credentialism becomes entrenched and ends up damaging societies. We can look for an analogy of the current situation, by looking at the medieval guild system. All sorts of occupations were off limits to people, if they couldn’t join the particular guild that enforces a monopoly on the particular profession. Universities themselves, are an historical outgrowth of the medieval guild system.

Historians tend to be of the opinion that the guild system harmed the medieval European economy, while benefiting the members of the guilds. Innovation was stifled by these guilds and progressive political activists like Rousseau are well known for their criticism of the guild system that rendered occupations off limits to those who hadn’t devoted significant time and resources to joining a guild. Once the guilds were abandoned, enormous innovation and economic growth generally followed, as the economic sectors over which they reigned dominant were modernized.  The reality remains however, that the credentialism of medieval Europe could come to an end because of a combination of radical technological and political changes. It remains to be seen if the modern day guilds will fall victim to disruption of a similar scope.

2 Comments

  1. Great essay that I am sure will ring true for so many of us.

    ‘It remains to be seen if the modern day guilds will fall victim to disruption of a similar scope.’

    Seems like this topic would link in perfectly to the subject of an increasingly automated workforce in the future, how this may make universal basic income essential for the continued functioning of society, the economy, and capitalism as a whole. Even though it seems likely to ultimately lead to an end to capitalism, increasing socialism and eventually perhaps even currency becoming entirely redundant. The way I see if corporations fight against UBI (funded by taxing businesses using automation instead of human workers) for the sake of short term profits they ultimately doom themselves in the mid-term but long term they are done for anyway.

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