Blog on the Run: Reloaded

“Dean Dad” is a blogger at Inside Higher Education, one of the two big trade journals for higher education (the other one is the Chronicle of Higher Education). His day job is an administrative position at an unidentified community college. He tells this interesting, and disturbing, story:

Traditionally, cc [community college] enrollments go up during recessions. (That’s because when the job market collapses, so too does the opportunity cost of college.) That happened with a vengeance last year, when we broke records with a double-digit percentage increase in a single year. The severity of the increase was unusual, but the direction was what we expected. Of course, recessions also bring cuts in state funding, making for a nasty financial pincer movement, but that, too, was predictable, even if the severity of it wasn’t.

This Fall, with just a few weeks to go before the start of classes, we’re seeing a weird bifurcation. Applications for enrollment, and applications for financial aid, are both up significantly even when compared to last year. But students who have actually registered are significantly down. Put differently, the number of students who started trying to attend and then vanished is dramatically higher than it has been in past years.

The folks in Admissions have done follow-up calls to the folks who’ve applied and taken their placement tests but not registered, to see what happened. I was hoping to hear that the most common reason was something like “you were my safety school, but my first choice school came through with a great offer.” Instead, the most common answer was “my unemployment ran out.”

I didn’t expect that.

This is where the “education as private good” idea has real social costs. If you have a significant population that just can’t find work because the economy is in the tank, and that population would like to go to college but doesn’t have the income for living expenses — financial aid is great for tuition and such, but doesn’t do much for living expenses — then what would you have that population do?

Let me repeat this, because for a lot of supposedly smart people, it simply isn’t sinking in.

This is not just a normal business-cycle recession. This is the deflation of an enormous bubble, driven by the Internet, tech stocks and then housing, that was more than two decades in the making and involved nontrivial (to be polite) amounts of fraud aggravated by regulatory capture/negligence. The longer it went on, the worse the aftermath was always going to be, and it went on for a long time.

Rule 5 of investigative journalism: Always do the math.

Currently, the unemployment rate is around 9.5%, which means there are somewhere around 23 million unemployed, working-age Americans — more than four for every existing job opening.

Moreover, tomorrow’s monthly government employment report is expected to show that nonfarm payroll fell in July by 87,000 jobs. The economy has to create — oh, let’s be conservative and say 100,000 jobs a month just to stay even with population growth. Over the past six months, the economy has created an average of 37,000 jobs a month. In Lotusland-on-the-Potomac, that’s considered a good sign — “Six consecutive months of job growth!” — although it means we’re actually falling farther behind.

How fast, and for how long, would the economy have to create jobs for employment to get back to where it was before everything went to hell?

First, what’s even practical? Well, FDR put 4 million people to work in one month during the Depression. That would rock; the war, as they used to say, would be over by Christmas. But that was the government, those jobs were manual labor, the hiring process was a lot more streamlined than it is today and even then that pace was not sustainable.

Let’s put it this way: The economy could create 200,000 jobs a month, and Barack Obama could be re-elected, and we still wouldn’t be “back to normal” when he leaves office. How likely is it that the economy will create 200,000 jobs a month for any extended period? Well, Bill Clinton was hailed as a hero upon leaving office for having created 8 million jobs in eight years. Which sounds great until you do the math and realize that that averages out to a shade over 83,000 jobs a month. Of course, the number of working-age people being added to the population each month was smaller, then, too. But as you see, for us to get “back to normal” anytime soon is going to require the kind of job growth that 1) hasn’t been seen in more than half a century and 2) when it was seen was seen because of government action, not private-sector growth.

Treasury Secretary Tim Geithner has called the current unemployment situation “intolerable.” But to judge from his actions, one can reasonably conclude that he’s tolerating it quite well, thank you, and so is the president for whom he works and the congress that is supposed to provide oversight for his department.

The actual unemployed people, on the other hand, are hurting. Badly. There is zero prospect of the kind of private-sector growth that will make a real dent in unemployment anytime soon. And there is zero appetite on the part of Washington politicians to do anything about that — they’re all terrified that someone will scream “Socialist!” at them, or else they really and truly do not give a rat’s ass about people who are broke, who are losing their homes, who may even be going hungry.