It seems everyone now has a college degree. It’s the price of admission for any professional or corporate job. This wasn’t always the case. At the beginning of the 20th century less than 10 percent of Americans had a high school diploma. A high school diploma was a major educational attainment. That was when education was primarily about learning.
Jobs rather than education
Ask students on college campuses today why they are getting a degree. 9 out of 10 will say they are getting a degree to get a job. Most people are getting degrees to get jobs, rather than to get well-educated. Students tend to prefer classes that are easy A’s than classes they may find interesting but could lead to a lower grade.
Credential creep is the phenomenon driving students to favor grades over education. By definition, credential creep is the process of inflation of the minimum job requirements. For example, a job as a construction supervisor. 70 years ago you could have this position with no high school diploma, 40 years ago you needed a high school diploma, now you need a 4 year bachelor’s degree.
This process of credential creep is primarily by two things:
The job market has become increasingly competitive. Job Markets, like all markets are feeling the effect of globalization. There is a global competition for positions at the top universities, and jobs at top companies. Because of the increase in the number of qualified candidates for each position, employers can be more selective.
An increase in the number of credentialing institutions.
There has been a growth in college enrollment in the last 50 years. Originally colleges provided Bachelor’s, Master’s, PhD’s, and professional degrees. Most colleges now provide certificates in certain fields of study. For example, a post-grad certificate in social media marketing. There also has been a growth in private certification companies.
The CFA and Wealth Management
The worst case of credential creep is in finance. The CFA Institute, the premier investments and wealth management association, has seen massive enrollment increases in their CFA exams. These exams are part of the requirement for achieving the Chartered Financial Analyst (CFA) designation. There are 3 exams and they each cost over $1000 and require 300 hours of study. In total, over $3000 and 900 hours of study (more if you fail exams, which is likely).
The private wealth management industry is in structural decline. There has been an increase in passive investments and robo-advisors. This means there are less jobs for CFA chartholders in investments management. Logically, if there are less jobs in a field you would expect less people to choose to enter it.
The complete opposite is happening.
The June 2018 CFA exam saw a 20% year over year increase in candidates. As the CFA institute called them “Candidates aiming to build a better world for investors.” People want to work in this industry that is in structural decline. Wealth management jobs used to require only a bachelor’s, now they require a bachelor’s and a CFA.
This is a prime example of academic inflation, which involves a simultaneous inflation of the minimum job requirement and the growing number of highly educated people. Getting a job, particularly an entry level job in a competitive industry is a challenging process for many people.
When a student looks at their peers attaining additional certifications, they need to get them as well. It’s a race to the top in credentials.
Students often return to school for a master’s degree after acquire their bachelor’s degree in a field with tough job prospects. They get their master’s degree and find it’s just as difficult to get a job as it was with their bachelor’s. This is the issue of people being told that education is the answer. If all you have is a hammer, everything looks like a nail. This is why we hear about people graduating with a master’s degree and having to take a job at Starbucks.
Education for the wrong reason
Many people will praise the high rates of educational attainment. They will say, education is never a bad thing, an educated population creates an informed democracy. These people miss the point entirely. The issue is that people are seeking out credentials and grades more-so than education. Students are pulling all-nighters on Adderall to study for final exams in hopes of acquiring high paying and prestigious jobs. I don’t think this is anyone’s idea of an ideal education system.
I believe we are close to hitting the inflection point of credentials. We are in a credential bubble. Credentials are massively overvalued in the job search process at present. I believe in the future, more emphasis will be placed on soft skills, and aptitude rather than past achievement and credentials achieved. My prediction is that this will happen after the next recession. With massive student loans and an excessive number of credentials student many students will still not be able to secure jobs.
Students will feel disenfranchised and lied to by “the system”.
This will lead to a structural change in the education system. We will see less people enrolled in university and more people focused on acquiring the specific skills needed for certain jobs. This will be done through self-study and more online specialized certificates. The internet will lay a much greater part in education. This will be a welcome change.