for a moment the diversity of these Dream Factories. Universities are to cities, regions, and countries what a degree is to the student: a promise of prosperity and opportunity. There are more than thirty thousand degree-granting universities operating around the world, not counting a growing and unknown number of private-sector, for-profit institutions. These universities range in size from tiny specialist religious universities in the United States, such as the City University in Kansas City, Missouri, which has twelve students, to massive online universities in the developing world. Indira Gandhi National Open University, based in Delhi, India, enrolls 3.5 million students. They vary just as widely in quality, with Harvard University, Oxford University, and the University of Tokyo emerging from the same academic tradition as the New England Institution of Art (rated as the worst college in the United States by Washington Monthly and ranked poorly in terms of student satisfaction). These thirty thousand institutions are all universities, in the legal and technical definition of the term, but they are as different from one another as soccer is from roller derby.
The transformation that has occurred in higher education during the last five or six decades has been almost universally viewed as a positive social change. Universities have evolved from what they once were—reclusive places of intellectual contemplation—into modern institutions. Yet some have also become degree mills that are destroying the reputation of university education around the world. Discovering that the transition is, in numerical terms, largely a function of the last sixty years and, in quality and impact, the last twenty years, should be reason to pause. In less than a century, universities have emerged from their impressive foundation in North America and Western Europe, beyond the toehold created in Asia and the European colonies, into global ubiquity.
Once elite, aloof, and unique, universities are now democratic, accessible, and commonplace. Every town and city of substantial size—and many unsubstantial places—expects to have a publicly funded university. Universities emerged, with little fanfare, as one of the central instruments of state educational, economic, and social planning and have become a major force for change around the globe.
Celebrated as a universal “good thing,” universities are reshaping pathways to careers and adulthood for hundreds of millions of young people. Their presence transforms communities and changes the way that employers recruit, train, and hire young people. More importantly, they have become repositories for the dreams of millions of young adults, their parents, their communities, and their nations. The world has embraced these institutions in a remarkable, uncritical, and highly enthusiastic way. Now the young, their families, and their countries are slowly discovering that these dreams are compromised, that the promise of personal and collective opportunity has been seriously exaggerated, and that the unchecked and ill-managed growth of the university system has developed without much reference to the job market or the global economy. But they sure are popular.
2
Awakening from the Dream
The Italian university graduate, visiting North America as a volunteer camp counsellor, laughed when asked if he had a job at home lined up for the fall. “I have an undergraduate degree,” he said. “No one in Italy gets a job with only an undergraduate degree.” Even with a degree in economics, one of the more marketable fields of study, he had been warned not to anticipate full-time work. So he applied for entry to graduate study in International Management at the Rotterdam School of Management, Erasmus University, and was waiting to learn if he had been accepted. “With a Master’s degree,” he said hopefully, “at least I have a shot at a decent career.” Given that more than half of Italian students drop out of university without a degree, you would think that the careers of those who persisted and earned an undergraduate degree would have a better outcome. Not so, it seems.
Not all Italians have such a dismal result after four years of academic study, of course. Some graduates get good jobs and solid careers, but this young man’s observations reflected the experience of many of his generation. Consider this surprising commentary, which shows that it’s actually more difficult for Italians to get a job with a university degree than without one:
Italy is the European country with the lowest number of “tertiary” graduates—meaning anyone with a university or university-like degree. Yet despite relatively low supply, one in three tertiary graduates between 20 and 24 (33.3%, up from 27.1% in 2011) remains out of work, according to Eurostat—even higher than their peers with just a high-school level degree, whose unemployment rate is 30.4%.
Italian companies actually seem to favor workers with lower levels of education: 37% of those employed in managerial positions hold only the minimum compulsory level of education, compared with 15% who hold a bachelor’s degree or above, according to AlmaLaurea, an Italian institution run by a consortium of universities and the Ministry of Education that gathers statistics on education.[1]
The problem, it seems, is that Italian undergraduates favour the Humanities and the law, areas that are disconnected from the contemporary European economy. But give some thought to the Italian realities. One-third of graduates were without work in 2013, only a small proportion move into management positions, and only slightly more than half of those who start out to get a degree actually complete their studies. If this is not an educational crisis, it’s hard to know what would be.
New Realities: Unemployment and Underemployment
The Italian situation is a good example of two new global realities: university graduate unemployment and the equally important pattern of sustained underemployment. Unemployment is easily understood. Students graduate and head into the job market, only to receive a cold reception. They cannot find work, struggle with living costs, and often move back home. The highly anticipated launch into adulthood has been postponed. Underemployment is equally devastating, but a little different. Many university graduates do find work, but not of the type and with the income that they had been led to expect. This produces underemployment, where university graduates find jobs but in positions that do not require the skills and expertise learned in their academic studies. A political science student driving a bus is employed, certainly, and perhaps even reasonably well paid, but in terms of the utilization of his or her skills is clearly underemployed. So it is with the hundreds of thousands of university graduates employed as retail clerks, taxi drivers, office support staff, hotel or airline representatives, or otherwise doing decent and useful work, but work that they could easily have done immediately after leaving high school.
According to The Economist, graduate unemployment and underemployment are significant around the world.[2] In country after country, graduate underemployment has become commonplace. In China, even before the financial slowdown hit in 2015, the chaotically expanding university systems—founded on a firm belief in the Learning = Earning mantra—had gotten well out of sync with the national labour force. New graduates struggled to find work. Graduates returning with foreign degrees found the market potency of the diploma greatly diminished. It turns out that China’s manufacturing-based economy did not demand an endless supply of university graduates, even in such previously high-demand fields as engineering.
The situation is not the same everywhere. In countries that limit university enrolment, as in Germany and Scandinavia, where the skilled trades enjoy considerable status and decent incomes, graduate unemployment rates are significantly lower. The American situation, however, is stunning. In 2013, according to Richard Vedder and his colleagues with the Center for College Affordability and Productivity, 48 percent of college graduates were underemployed, and 37 percent of college graduates held positions that did not require a high school degree to perform the job properly. Collectively, that added up to five million American college graduates holding jobs across the country that did not require even a high school diploma, let alone a college degree. As they reported, ominously, “Past and projected future growth in college enrolments and the number of graduates exceeds the actual or projected growth in high-skilled jobs, explaining the development of the underemployment problem and its probable worsening in future
