Thursday, September 11, 2014

Study Hard, For What?

That is the title of this video that I found on CNA.

 

As a disclosure, I must let it be known that I do have a university degree which I obtained from one of the 3 local universities.

Many of my friends ended up in local universities. If they did not enter the local universities, they went to overseas universities. It might not be perfect logic, but more often than not, having a university degree puts you in a better position to have a better job.

However, I feel that pushing students to attend universities in massive numbers is not a good policy. This follows the same *stupid* economic "theory" that if you print money, people will spend it. I wonder how that policy is working out for countries like Japan? Not good I imagine. Rather than create a derivative of a fundamental truth, why not just use the fundamental truth instead? People will spend money when they want to buy stuff. Similarly, companies will hire workers when they need workers.

The universities play a functional role in training students for jobs in the labour market. If they take too few students, there is a strong demand for their jobs. If they produce too many students, many students will be unemployed and existing jobholders are constantly getting cannibalized by their unemployed peers. That is it. It is simple. Building more houses doesn't mean that people will fill them up. Ask any property agent now. Similarly, increasing the number of students with degrees does not increase the number of degree jobs.

Really people, I don't think this is rocket science at all.

And you know what? I think people do realize this, but they don't care because they don't think that it applies to them. They are the exception. They will go to an overseas university and come back and get a great job. I don't blame them. It is human nature to want the best for yourself or your children. That is why, regardless of the intake in local universities, there will always be more supply of degree holders since both students and their parents still demand university education anyway.

This is not necessarily a bad thing. Many times the universities will not be able to gauge the hiring demand for companies well. Studying in a private or overseas university allows you to capitalize on this and seize the opportunity to work in that industry. They help fill the gaps when hiring demand is higher than the labour supply available. Market forces help to tilt the balance of supply and demand. It is never perfect, but it is somewhat self-correcting over time.

While they may go to private or overseas universities to get their degrees, at the end of the day IF they come back to Singapore looking for jobs, they are still going to compete with the exact same peers that ousted for the same university course. If the hiring demand is less than labour supply, more often than not, they get ousted again by the same people when it comes to job hunting.

This is of course a very bad example. Some people are late bloomers, same people thrive in other learning environments. But I know a friend that studied law in a good university in the UK. He came back to Singapore, searched for a job for months, and in the end had to go back to the UK to find a job instead. The job market for freshly graduated lawyers in Singapore is tight, really tight. That is why it is reported in the newspapers so much these days.

It might not be the best example because it is one niche career, but I think it is a pretty good example of looking at what an oversupply of degrees can do if we just analyze it like that.

When it comes to jobs, if there is someone more qualified than you, he will get the job. Your only hope is that the labour demand for your industry is big enough that it can absorb you. If that doesn't happen, only two choices are left: Migrate or change career. Do we really want our fellow citizens to migrate? Or to be forced to take a different career after spending thousands and thousands of dollars for an education which is useless in Singapore. It isn't a useless education, definitely not. You can probably apply some knowledge to other jobs locally, and you can definitely get a job in that career if you worked overseas, but just not in Singapore if the labour market is tight. You can get a local job in that career if you wait long enough for a vacancy.

I advocate the reduced emphasis of a university degree and the increased emphasis to have respect for people in all jobs. Discrimination based on jobs is unwarranted and runs too deep in our society. I met a very nice couple where the wife was a BANKER and the husband was a BAKER. Yes, he baked bread. But, so what? He has a job and he enjoys it. That is still better than being pissed off about being unemployed.

I am not anti-education. I am not anti-university education. I am against the thinking that EVERYONE should have a university degree AND complaining they can't get a university degree holder job in Singapore is fine. That just doesn't make sense.

If people can see how ridiculous it is for EVERYONE to be a doctor or lawyer, don't they realize that this is pretty much the same thing, but of a lower expectation to think that EVERYONE should have a university degree and a nice cushy job that comes with it?

This is clearly double standards based on exceptionalism and entitlement.

EDIT: A bit OT, but I stumbled upon this article today that is somewhat related. A very interesting read from someone with a different perspective.

4 comments:

  1. What if every retail investors are experts in their investment and get above average or super return. Who will lose money?

    Then how to huat? LOL!

    ReplyDelete
    Replies
    1. Hi Uncle CW8888,

      You are very good at giving an example related to investing. You are absolutely right of course. It is impossible for everyone to get above average returns, some people must get below average returns.

      What we can hope for is that the average returns goes up for everybody in absolute terms. The better investors will make even more, while the below average investors will still make less than average, but it is still good on an absolute basis!

      In job terms, the ideal situation is for companies to move up the value chain. This means that they would employ higher value people, and these industries can absorb the higher demand for better jobs. The best example in history is how we have moved from primary to secondary and now to service industries!.

      Delete
  2. Hi MH,

    To summarise, there is no escape from the bell-curve? =)

    ReplyDelete
    Replies
    1. I never thought about it that way until you mentioned it, but yes I think so. Let me try and visualize my thoughts about that outloud...

      Singapore does have a high standard deviation (income inequality) in our bell-curve, but we also do have a high mean (average wage) as well.

      If compared relatively within our society, bottom income earners will never be satisfied with the disparity between the top income earners. Narrowing the standard deviation (reducing income inequality) will help with social unrest because less people have less things to compare about.

      However, all things equal, I think that if the mean of the bell curve can shift to the right, everyone would benefit in absolute terms.

      Delete

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