Thursday, April 18, 2013

Nonprofits Should Lower Education Requirements For Some Jobs From "College Degree" to "High School Diploma"?

Guess which line represents student loan debt
America is in the midst of a debt super-cycle.  Whether  we muddle though to a period of expanded economic growth or descend into a disastrous run of debt-deflation coupled with hyper-inflation remains to be seen.   Possibly, as some economists suggest, we're in for two or more decades of anemic economic growth all the while burdened with expanding promises we've made to the retiring Baby Boomers.

But what we know right now is that many nonprofits (as well as certain local government agencies and small businesses) are having an increasing difficult time retaining entry level staff for certain entry level positions.  While some point to low salaries, the primary driver is the enormous debt burdens of young people entering the workforce.

Student Loan debt continues to skyrocket.  In just seven short years from 2005-2012, the average student debt load ballooned 58 percent -- from $17,233 to $27,253.   This is the only category of consumer debt which did not shrink/slow as a result of the financial meltdown of 2008.  The net result is that young adults are starting their careers with a $400 monthly payment or $4800/yr. In rural regions of Pennsylvania, starting salaries can be as low as $24,000, which after taxes means up to 1/4th of take home pay can be consumed by student loan payments.  It won't take a bright young mind long to figure out the need for a different career or even grad school. 

They won't pay off their balance on the salary you can afford
One way for nonprofits to deal with the problem is to reconsider the educational requirements for certain positions.  We know right now about 1/3rd of college grads are working in jobs which do not require a college degree.   What we need to be thinking about is if a lot of the jobs we have even need to require a college degree.   Think of it.  A high school grad with zero debt will be a lot more satisfied with a $24,000/yr salary than a college grad weighted down with massive debt coupled with an inflated sense of their value to your organization.

1 comment:

Anonymous said...

That's a pretty gutsy assertion there Mr. Brand. But you're right, we have let our job descriptions inflate to the point where we're requiring college degrees for work which anyone with good reading/writing skills can accomplish.

Since I have to train these new employees anyway, it makes little difference if they come from Penns Valley High School or Penn State.