Young people are much more sympathetic to socialism than are earlier generations; their support for self-declared socialists Bernie Sanders and AOC is one metric of this sympathy. But when pushed for details, few of them think of socialism as the classic 20th century version of a government controlled economy. Instead, they are enthusiastic about universal health care and free college for all.
If one looks at the costs of various goods, most goods have become steadily cheaper over recent decades (see chart, 1997 to 2017, original from AEI). The two major exceptions are health care and education (both of which are heavily regulated by governments).
At the same time, the rewards for obtaining a college degree have steadily declined. Recent research by the St. Louis Fed shows that both the income premium and wealth premium of college have declined in recent decades. The wealth premium for college is now close to zero for most demographics. Half of all colleges report that more than 50% of their graduates earn less than a high school graduate six years after enrolling. 65% of college graduates regret their college degrees, including 75% of humanities majors. 48% of college graduates are in jobs that require less than a college degree.
It is not surprising that, as a consequence, increasing numbers of young people are increasingly focused on learning real skills, often through the innovative "boot camp" model of education. “New collar” bootcamp enrollment is up 11x in recent years (coding, UX/UI, digital marketing, cybersecurity, etc.), whereas college enrollment is down 10%. Meanwhile, 93% of freelancers say skills are more important than degrees. Many top employers no longer require degrees (e.g. Apple, Google, IBM, Bank of America, Penguin Random House, Home Depot, Costco, Whole Foods, Starbucks, Hilton, and Tesla). Only 43% of recent high school grads regard college as “very important” as opposed to 70% just five years ago.
Meanwhile, there is evidence that as Millennials enter the workforce and begin to earn higher incomes, their support for higher taxes and redistribution decreases.
It is true that many students graduate from college with crushing student debt and weak job prospects. It is not surprising that they feel as if the "American dream" has left them behind - and that the "American dream" itself is fraudulent.
But an alternative interpretation of this situation is that it was a mistake for society to claim that college for all was a good investment. If many young people are apt to be more successful, at significantly lower cost, through technical training, vocational training, or "New collar" bootcamps, then those young people would have been on a path to earning a decent livelihood earlier on in their careers. Many bootcamps are only six to twelve weeks to learn a valuable skill. Many require no tuition up front and only receive a portion of earnings after a young person has obtained a job (income share agreements), thus ensuring that the bootcamp's financial incentives are aligned with those of the aspiring job seeker.
Meanwhile, college requires not only significant student loans that result in a debt burden, but also four years of one's life that could have been used earning an income. Of course it is often a lively period of social life, dating, and partying. But perhaps we should reconsider encouraging young people to go into debt for four years of fun only to find that many of them are no more employable after four years than they were before hand.
Of course, we could simply provide free college for all as advocated by Bernie Sanders and others. But doing so is an extremely regressive practice - those who do graduate from college are, on average, considerably higher earners than those who do not. Given that roughly 36% of Americans obtain a B.A., if that experience only provides a positive ROI for half of them but not for the other half, then free college for all is subsidizing the 18% of Americans who go on to become the elites - a household with two college degrees or one masters degree is typically in the top 10% of the income distribution during their peak earning years. Why should the average taxpayer be subsidizing an education for the top 10% of income earners? It would be better to find better paths for lucrative careers for those who would have been better off not going to college to begin with.
Mike Rowe has been promoting a revival of vocational and technical education for sometime. Meanwhile the "New collar" bootcamp industry has taken off at an amazing speed - 11x growth is phenomenal. Almost none of these bootcamps are eligible for federal student loans.
In the short term it is a politically appealing strategy to forgive student debt and provide college for all. On the other hand, both policies are unlikely to improve social mobility. Instead they represent regressive policy measures that disproportionately benefit elites.
An approach more fully aligned with social mobility, and therefore social justice, is to support the many increasingly lucrative and fast alternatives to college. Students should be informed of the probability that they will not receive a positive ROI from particular colleges and particular majors (PayScale.com provides excellent data on this).
And then we can devote the funds currently going to subsidize the least valuable college degrees for a more progressive cause, such as increasing the Earned Income Tax Credit, thereby benefitting low income households directly.