Who should pay for job training? David J. Staley Ph.D.

I was leafing through a Forbes magazine in 2019 while on a flight and came upon an extraordinary advertisement.  Featured prominently was a young woman in a college-style sweatshirt, which in block letters bore not the name of her university but rather the figure $67,928.  “Why did she borrow $67,928 for tuition?” the advertisement asks.  The answer? “She did it to work for you.”

The advertisement still riles a year and a half later.  I would call it tone deaf if there were anyone actually listening to the tune.

Gradifi – a Job Benefit that Helps Your Employees Pay Off Their Student  Loans - HRProfessionalsMagazine

The ad demonstrates an unexamined truth: that when it comes to the problem of students taking on higher and higher levels of debt, corporations and those who hire graduates have no skin in the game.  Students are, in effect, being asked to pay for their own job training, the benefits of which are enjoyed by the companies who hire them.

We see surveys every so often where CEOs and HR managers are asked to assess “job readiness” by graduates, with business leaders often lamenting the preparation of students.  These companies are content making demands upon higher education but are rarely willing to pay or otherwise contribute materially to bringing about the educational outcomes they demand. 

Jamie Merisotis, in his book America Needs Talent, reports that “Only 14% [of employers] believe colleges and universities are preparing students adequately for work.” 

“There is a disconnect between what comes out of the education system and what we need as employers,” notes Fred Keller, the CEO of the Grand Rapids-based manufacturer Cascade Engineering.  He points to credentialing, for example, echoing a national concern. “We need to know what people really know and employers need to describe what they need.” 

Merisotis champions the work of the Columbus Community Education Coalition in Columbus, Indiana, a partnership that includes local business leaders, elected officials, philanthropists and educators.  “The CCEC’s bimonthly meetings allow local companies to express what talents and credentials they are looking for in potential and future employees, and educators can then adjust their curriculums going as far back as kindergarten to produce a workforce designed to meet those needs.” (emphasis mine) Nowhere in this discussion is there a sense that employers are willing to pay for their needs and their concerns and their demands and their expressions.  

The problem might be graphically depicted to show that the increased use of the terms “workforce development,” “educated workforce” and “knowledge worker” is occurring at the same time as the rise in the amount of money students are taking out in loans.    

In the current educational system, companies are more than content to outsource their job training to universities.  “In broad terms,” The Economist noted in 2018, “provision of on-the-job training has been shrinking–in both America and Britain it has fallen by roughly half in the past two decades. Companies are often loath to provide it. A 2009 study from the OECD, a club of mostly rich countries, worried that ‘industry, left to its own devices, may not have incentives to provide sufficient training.’”  Moreover, companies expect new employees to hit the ground running, having already been sufficiently “trained” in college to work for the company.  In effect, businesses are saying “we demand employees with such-and-such a set of skills…and, oh yes, we want the employee to pay for their own training.”  It is one of the more pernicious aspects of the contemporary knowledge economy.  

Let’s leave aside for the moment the causes of increasing tuition—and especially the continued decline in state support for higher education.  The problem I am identifying is that fact that students/employees are the ones who are paying/investing in their own training.  Companies (think they) call the shots about how students should be trained but are unwilling to foot the bill.  It’s like being asked to bring a dowry to a marriage.  A dowry is property or money brought by a bride to her husband on their marriage, and is a similar sort of asymmetrical power relationship.  

The ad in question is for Gradifi (get it?), a company that provides financial services to companies that allows their employees to refinance their student loans in order to pay them down more quickly. But note: neither Gradifi nor the company eliminate or take over these loans.  The employee is still responsible.  

In my ideal world, a company would pay or otherwise write off these loans as a condition of hiring such a graduate/employee.  Although in that ideal world higher education would not be so simplistically connected to workforce development.  

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