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The only thing more expensive than going to college is working through college
When Calvin Ratana graduated from high school, he didn't want to go to college.
He wanted to join the military, but his guidance counselors and teachers kept telling him he had to go to school, so he went to California State University - Northridge.
They were well-meaning. After all, conventional wisdom and Public Policy Institute of California research suggest that the more educated a young worker is, the better his or her job prospects are, resulting in higher wages.
“College graduates over the course of lifetime make more than those who don’t graduate from college even after you take into account the costs of actually going to college,” said Dr. Hans Johnson, co-author of the California Public Policy Institute study “Student Debt and the Value of the College Degree.”
But even Johnson admitted, this isn’t true for students who start off low-income but don’t get scholarships: the type of student that has to take on a high burden of debt, like Ratana.
As senior economist and director of health policy research at the Economic Policy Institute in Washington D.C. Elise Gould wrote in a recent report, “Due to young college graduates’ limited job opportunities, stagnating wages, and the rising cost of higher education, college is becoming an increasingly difficult investment.”
In fact, for these low-income students, the price of college is rising faster than the wages earned after graduation.
But how is that possible? Aren’t college graduates supposed to fair better in the job market?
There are two factors at play. First: more and more students are getting a college education. It doesn’t set graduates apart like it once did.
The second reason is more specific to people like Ratana. As UCLA Labor Center researcher Reyna Orellana explained, it’s especially difficult when low-income students are responsible for their academic and personal expenses, in addition to their schoolwork.
Ratana worked three jobs -- including two in the restaurant industry -- while attending CSUN. At the time, he was earning $30 per shift, and a typical shift ran up to 6 hours, without a break. This means he was paid $5 an hour -- well below minimum wage. To make up for the low wages, he worked both the lunch and dinner shifts: 12 hours of non-stop restaurant labor for about $60 total. He was not paid any overtime.
He says the experience “nearly killed him.”
“They are working hard,” UCLA Labor Center project director Janna Shadduck-Hernández said. “They are not only just going to school but they’re also working.”
In Ratana's case, he was sending money back to his mom, who was sick.
“They’re trying to pay for rent, school, and other obligations like family obligations,” Orellana explained. “It becomes difficult to manage if they have low wages, if they have unstable schedules.”
Because he had to work so much, Ratana did not do his best in his classes, but he did graduate last year with a degree in journalism and Asian American studies. Along with the degree, he also got nearly $24,000 of debt. If he just makes the minimum payments, he won’t be done paying it back until 2025.
Especially for young people coming from low income families -- people like Ratana -- the priority becomes paying that debt off as soon as possible.
“They graduate with all this debt so they have to get a job where they can pay it off,” researcher Jeylee Quiroz said. “And sometimes, that’s a lower wage job.”
For Ratana, it meant the exact same job at a marginally hire rate -- $9 an hour. For now, he is postponing his dream to work in community organizing.
“It’s stable,” he said. “It doesn’t take me out of the comfort zone, but I know how to do this job. It’s been years.”
Why can't college grads get higher wages?
Elise Gould (EPI): "College grads are also not able to bargain for higher wages with their employers. So because there are other workers waiting in the wings, the official unemployment rate, or even a measure of labor market weakness generally -- a reduced labor force participation rate -- all of those things mean that workers know that they don't know very much bargaining power vis-a-vis their employers until their employers have to raise their wages."
Who might not benefit from college?
Dr. Hans Johnson (PPIC): "For students who do not complete college and for students who go to colleges that have a poor track record with respect to how their graduates are placed in the labor market, college might not be the best choice, and really what I should be saying is that college might not be the best choice."
