Bill Gross of PIMCO, a $220B investment management firm in California, recently wrote about the need to prioritize government investment in education and jobs. Higher education has taken young people and distracted them from skill-building and saddled them with debt (over $1T, about 7% of total US debt). Fewer people in this country are able to risk starting their own business, and fewer are ready to work for the global economy. He cites an early Facebook investor, Peter Thiel, who is offering $100k to 20 teenagers who demonstrate how they will be visionary leaders and innovators, if they don’t go to college. Gross also notes how the private sector just can’t create jobs fast enough to avert the slowing of the economy and that the government, in the words of Hyman Minsky, must be the “employer of last resort.” FDR had his CCC and Barack Obama should come up with something similar.
Higher education costs have grown 6% faster than the CPI, thus a four-year degree is comparatively four times more expensive than it was in 1985. There is a lot of other things people could do with that money. How do you feel about the rising costs versus the decreasing benefits of having a college degree? Massachusetts and the Boston area in particular have long benefited from a healthy tertiary education sector. Our high-tech and biotech industries literally stem from the major institutions in Boston and Cambridge. Will the rising costs of higher education result in a response from the market? Or is our region, because of the marquee institutions we host, insulated from a higher-ed cost rebellion? Let us know what you think!