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Heritage Foundation Senior Policy Analyst James Sherk on the challenges for recent college graduates in finding work.
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Listen to this one into college grads with a bachelor's degree.
Who are under the age of 25 there without a job where there under employed.
This is student loan debt continues to -- to mount and tuition costs skyrocket year after year after year.
Senior policy analyst and labor economics for The Heritage Foundation.
-- welcome back to the show what do you make of these numbers.
I think that it's.
It's a bit much -- -- it's a very tough economy right now for new grads.
Business -- hasn't picked up it is a problem.
But it's not that that these the numbers they have anger or have a people have no one job.
Or or their -- that's like a big number to make 50%.
Well it it sounds like a big number 50%.
But then you take a look at this and number and look at it in 2000 the height of the tech bubble.
When imports were desperate -- -- mean if if you remember back then help wanted signs everywhere.
And that then there was 41% of the population was underemployed same group as is is it just.
Exactly did it doesn't -- very much useful -- state of labor market this.
Under blown -- the president has a solution to this problem.
He wants to back down interest rates on student loans that they're set -- -- higher on July 1 eight point 6% he wants to bring them back down to 3.2 percent.
Where they Ben in the past is that the right thing to do.
I think -- much better solution would be to focus on encouraging businesses to hire.
But you do have an issue right now we're -- dropped pretty sharply in the recession.
It has recovered all that much sense we're still vicious they're creating about a 17 fewer new jobs now than they were in 2007.
And how do encourage businesses to hire well list of loan debt really isn't GO factor affecting the the businesses and it doesn't create jobs.
A much better approach would be don't raise taxes remove regulations that are in -- -- regulations discouraging businesses from hiring.
Create a better business climate but instead always been proposing -- -- government.
Well you know if you if you consent if you tax something.
You create less of it if you instead they can create more of it.
If you start saying that you get cheaper student loan -- you probably get more student loan debt right now we have something like a trillion dollars of student loan debt outstanding.
People call this the next bubble that will burst do you believe that to be true.
I think there's a lot of truth and that I mean if you look at all leave the federal subsidies for student loans looks like the colleges and the university simply take that value by raising tuition.
So you government gives you 5000 dollar grant for tuition and tuition goes up -- thousand dollars you know pick -- up.
And it quickly well it out like like there's more spending to be -- here comes a higher tuition.
So you've got these these very bloated administrative structures -- a lot of universities.
Don't really help the students learn learn much and then you get the of the students piled up book but debt when they leave.
But it's you know it's not a good situation and that I think it is ripe for a competition a technology well.
-- -- you're gonna have to go through the quality of instruction you talk about the sushi bar.
I didn't talk about that over the top -- these kids have -- it you know it this summer we should be globally we should be putting our money but let me ask you this.
Yeah we we talk about job creation you know people think that's a function of the economy.
But isn't the future of these kids it's more than just the economy that's holding -- back right now it's it's the quality of the education is and in.
What depends what you're studying for I mean there's a lot of jobs say being a -- researcher or cost estimate or.
Or write anything in the healthcare field where -- you get education you've got up a wide open future for you.
But if you get a degree in say art history.
Well there's not many places other than museums looking to hire art history majors and so it's part of it is getting a degree that employers value and that gives you real skills in the real world.
Let me let me tell you about the details of -- study that was -- employers here's what they had to -- college students they've had only a quarter of college grads.
Have the writing and thinking skills writing thinking skills not highly technical skills.
That they need to do the work they were looking to hire them or think about that three quarters of college grads.
Can't do the job.
It's a bit -- stunning critic of our educational system.
Which is why I think they the possibilities for things like online learning we're seeing a lot of things like at MIT put in a lot of their courses on line.
These said this new -- gas -- -- up founded by former Stanford professor.
Offer a lot of potentially a very bright tough prospects for a reform of the future we'll see what happens.
But I I have -- are we -- we keep preaching for the same solution.
More money have a problem -- let's just let's just and it fix it with more money is that the right way to go.
Now and it certainly not when you think about -- some money come from.
It is where does Obama want to get the money to pay for all these goodies we'll always pretty open who wants to raise taxes on through the rich.
Who are those investors and successful entrepreneurs.
You're gonna raise taxes on the people who create jobs in an attempt to create jobs that -- but doesn't work.
You don't get more jobs -- -- the people who -- them.
Right -- -- thanks for coming on tonight appreciate your time great job as always.
Thank you.
