OnPoint: 3 News Exclusive Investigation Newsflash: Government Not Profitable
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BenWilson, in reply to
Final income, yes. But overall wealth? A degree is at least 3 years with no earnings, and probably some hefty unusual costs too. If you're comparing to a 15 year old leaving school, make that 5 years, at the very least, that the degree holder is catching up on. For a 882/651 - 100% = 35% better pay packet, that's some serious years taken to catch up, and I'm not even accounting for taxation, which is progressive on incomes, but zero on assets.
ETA: And of course it still doesn't really tackle the question of actual workload. Would be handy to know comparative hourly rates. That goes to quality of life too, not just income.
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NBH, in reply to
Would be handy to know comparative hourly rates
That's in the spreadsheet I linked too as well (although not by age). :-) In 2008 the school only/ sub-degree/ degree+ hourly rates were $16.00/ $19.95/ $25.46. Also, that 15-year-old would actually be in the 'no qualifications' group, where the median income for 15-24 year olds was $55/week...
The RoI question is an important one, and it does take a bit of time for students to catch up (and would take even longer if interest went back on loans), but remember that these days most students do work while studying, and are often doing the same sort of jobs as those that people with no qualifications are doing. Those who don't study will (probably) be doing more hours, and won't have the student loan, but in terms of relevant skills and work experience, establishing the beginnings of a career etc., I don't think the difference is quite as big as it used to be even just 20 years ago. Certainly by the time someone hits 30 I think that they'll be seeing a clear benefit, with further options for advancement, and they'll still have several working decades left to take advantage of it.
Of course, there is an educational pathway that involves working full-time, doesn't entail a student loan, links training directly to workplace-relevant skills, and still results in a qualification: our industry training system. However, the current (and likely future) government has been undermining that system over the past year or so.
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Rich of Observationz, in reply to
our industry training system
That only applies to some jobs though. AFAIK, you can't do a formal apprenticeship in retail, banking, sales, customer relations or many other areas. (and you certainly can't do one in IT).
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Sacha, in reply to
the future has greasy hands, apparently - thank goodness for those streamlined motorways
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NBH, in reply to
You can do one in all of those Rich :-) (well, other than IT - and I understand that one of the issues with that sector it is that the certification programmes run by the major companies are seen as much more relevant than a qualification). The Retail Institute looks after general retail and sales, and many other ITOs have developed specialist qualifications for their sector, the Finance sector comes under the coverage of ETITO etc. - the full list of ITOs and their coverage is here
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Sacha, in reply to
ETITO
always reminds me of Old MacDonald's Farm
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Lucy Stewart, in reply to
I'd go along with describing it as "just scraping by" if I hadn't personally experienced going from being a student to that and back again, every year. I know which one was "scraping by", and it sure wasn't the one with the regular paycheck. The holidays actually felt like holidays, despite the fact I was working full time.
Working minimum-wage as a student (which is my only direct experience, too, to be fair) is, as far as I can tell, a totally different ballgame to doing it full-time for a long time. As a student, you know it's not permanent; you're living cheaply, either with your parents or flatting; you often have extensive support networks; it's a break from study. I remember that feeling - it was great, to turn your brain off for a couple of months, just do the 40 hours a week and come home.
But when you're there full-time all year - often working public holidays - it's not a break and it's not secure or fun. You don't have parents to help you. You get to choose between flatting - which does lose its charm for most after a couple of years, god knows it did for me - or having a large chunk of your income taken up renting. A broken-down car or a visit to the after-hours is a significant financial hit. Things like a new computer, or a holiday somewhere interesting, or children - they're probably all out of reach. If you have kids, it's a struggle. I remember the bit where $25000 before tax seemed like more money than I could possibly want - and when you're used to living on a student income, sure, it is. But living on a student income sucks, frankly, you do it because you have to, not because it's fun. Talk to someone who's been in a supermarket or a retail store,without rising to management, for the better part of their careers. Most of them aren't going to be thrilled about it.
I absolutely do not advocate that going to uni means you'll walk into a really high-paying job and all will be well. But - even with student loans - you have a much, much higher chance of getting a better job.
That still doesn't mean going to uni is for everyone - I think too many people try it and end up with debt and no benefits now. But there is a body of people for whom it's a sensible financial decision. Not going is a sensible decision if you have an alternative path of training, but we need to make those paths more obvious. It really heartens me to hear there are apprenticeship opportunities not in the trades; more people should know about those.
(It also means that we need to raise the minimum wage, because it shouldn't be the case that minimum wage jobs are absolutely shit to live on long-term. But that's another argument altogether.)
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I agree about the minimum wage.
What I'm essentially trying to get to the bottom of here, is a What-If on the economics of a person faced with the choice between further study, or seeking work. It's a difficult question because comparing what does actually happen between people who do make these choices can't eliminate the bias that comes with the high probability that study is the option for the smartest and most motivated kids, coming from the wealthier families.
So we're talking about a what-if on kids with identical resources to each other taking alternative paths. This means your assumption that they must live away from home if they work is false. Indeed it is patently false in nearly every case I can think of, only people who are actually estranged from their parents are forced from home (and these are the kids who actually CAN get accommodation allowances if they want to study). Mostly, working kids are simply expected to pay some board, and do some of the household chores, which is a much, much better deal than renting, except in the escape from parental control.
Talk to someone who's been in a supermarket or a retail store,without rising to management, for the better part of their careers.
I've talked to several such someones, but can't say I've done an exhaustive study. The ones I did speak to were frank about being basically not very bright, and pretty stoked to have a job at all. I'm sure there are people who have stuck with secure low paying income for lengthy periods who were bright, but circumstances made it impossible for them to keep looking around for better options. This probably happens to people who are one pay check from destitution for years on end. They're in a perpetual state of fear.
I doubt these people have the resources at all to study. Hell, I don't have those resources right now. I couldn't conceive of starting a new career with a three year stint at university - how would I pay the mortgage and feed my family? It would have to have some seriously high chances of a massive payout starting bang on graduation to even consider it.
Part of what I'm driving at here is that I think tertiary study should be not only free, but should have generous allowances. Otherwise it doesn't stack up economically, and becomes an economically irrational choice for anyone except the already wealthy. I think this is exactly what happened right when I began studying and it was incredibly regressive for our society. But it's bloody hard work convincing people older than me of this, because they simply don't have the whole picture of the economics, and look only to the final incomes, and can't understand student debt and what impact it has had on this country. They actually think it's a really sweet deal to be given a big loan with no security so that you can study. I'm trying to get to the bottom of whether it's a sweet deal, or whether it is, in the economic balance, actually a big risk taken by people who have no real information to make such a huge decision with.
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Lucy Stewart, in reply to
I doubt these people have the resources at all to study. Hell, I don't have those resources right now. I couldn't conceive of starting a new career with a three year stint at university - how would I pay the mortgage and feed my family? It would have to have some seriously high chances of a massive payout starting bang on graduation to even consider it.
I guess I'm thinking more about people leaving high school, rather than later re-training (which *is* currently a massive financial risk and impractical for most people.) There's a bit of a hole in terms of finances with uni currently, where someone who's poor enough to get the full allowance can do better financially than someone with middle-class parents who can't afford to help them very much; part time work + the student allowance makes university just about doable without massive stress. Adding in living costs (which are significantly lower than the allowance - double penalty!) increases your loan a lot and makes your life harder as you go.
Part of what I'm driving at here is that I think tertiary study should be not only free, but should have generous allowances. Otherwise it doesn't stack up economically, and becomes an economically irrational choice for anyone except the already wealthy.
I don't think it becomes economically irrational for everyone except the wealthy (and I think that's basically our difference of opinion right there) but I certainly agree it increases the number of people for whom this is so. You can be poor, go to uni, and do very well, but a lot of things have to go right.
I have a perception bias in that I know a number of people for whom this has been the case, but - and I think this is a big factor - all of them met, at uni, middle or upper-middle class partners or social groups who encouraged and/or expected them to continue with study. I think there's a big factor there: if you come from a background where uni study isn't a thing, whether you have the motivation to continue does often seem to depend on whether you form connections with people who take it for granted, sort of a meme in action. And that's a totally random thing, of course, you can't tell people "go to uni and make the right contacts". But I think the social factor does play a role in patterns of success against the statistical norm.
a big risk taken by people who have no real information to make such a huge decision with.
Unquestionably, people deciding where to go after high school aren't operating with enough information - "none" isn't quite fair, but it's really hard to know what decisions are going to lead to what outcomes, even in within the reasonable bounds of probability. And it's hard, eighteen-year-old brains aren't designed for picking long-term outcomes. You do what all your mates are doing, or what your family wants you to do, or what makes you happy right now. None of those are necessarily bad things but they're not necessarily good, either.
In some ways I can kind of see the point of countries with (non-military) national service: gives people some job experience and a chance to think about what they want to do, and grow up a little. The two years or so are a wash compared to the length of your working life.
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Steve Barnes, in reply to
They actually think it’s a really sweet deal to be given a big loan with no security so that you can study.
Well it would be if the loan went to the student but it doesn’t. The bulk of the loan goes straight to the institution, to pay fees, who is encouraged to charge at “market rates” to reap as much profit from foreign students as possible (citizens and permanent residents are “subsidised”). The rest of the loan makes up student allowance which is in lieu of a benefit, as you are neither sick nor available for full time work.
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Sacha, in reply to
people who take it for granted
Social capital is tremendously important, particularly when it comes to education, work and success (however that's defined).
One example - John Key's mother came from a family of wealthy traders in Europe. So despite being on the bones of her arse for many years in Christchurch, expectations about enterprise are bound to have been part of his childhood compared with many of his peers.
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Rich of Observationz, in reply to
I'd be interested (not enough to spend time researching, obviously) in what the take-up is outside the "traditional" apprenticeship areas where the "ticket" is legally required in order to work at a certain level.
I've some exposure to retail, and generally most people seem to learn on the job and only do required qualifications (like food safety, or driving a forklift). If you have half a brain and work in a supermarket for a year or so, chances are they'll make you some sort of manager.
The ease of firing people in NZ means that most businesses don't care about training anyway - they hire someone with the narrow skills to do a particular job and fire them if the job goes away.
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Lucy Stewart, in reply to
One example – John Key’s mother came from a family of wealthy traders in Europe. So despite being on the bones of her arse for many years in Christchurch, expectations about enterprise are bound to have been part of his childhood compared with many of his peers.
Yeah, I have kind of strong feelings about how much John Key plays up his poverty-stricken childhood when by so many metrics he was very middle-class. Maybe not in terms of strict economics, but there are so many other things that go into the socio-economic ladder that no-one talks about. It's one of the other things I've seen trip people up when they move up it: there are rituals and expectations they're just not aware of. Like business dress; when you've never had to wear it or seen people wearing it regularly, the whys and wherefores and no-nos are really, really confusing.
Humans are just so damn good at finding ways to establish ingroups and outgroups, basically.
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Sacha, in reply to
there are rituals and expectations they're just not aware of
I've been fascinated watching people use particular architects and furniture designers as social signifiers, for example.
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Sacha, in reply to
how much John Key plays up his poverty-stricken childhood
that he gets away with it speaks volumes about the quality of alternative discourses on offer
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BenWilson, in reply to
I don't think it becomes economically irrational for everyone except the wealthy (and I think that's basically our difference of opinion right there) but I certainly agree it increases the number of people for whom this is so.
We'd probably need to be specific about what is meant by wealthy for me to know if that is our disagreement. I think you've got it exactly backwards, that the greatest benefit in absolute terms from tertiary study always goes to the wealthiest people, they get both kinds of benefits - economic and .. everything else, and for the poor, it's a big risk, they must consider the payoff, compromising general education in the process. For those in the middle, it's in the middle. Economics is a factor, but they have some leisure to avail themselves of the broad experience that comes from general education.
I have a perception bias in that I know a number of people for whom this has been the case, but - and I think this is a big factor - all of them met, at uni, middle or upper-middle class partners or social groups who encouraged and/or expected them to continue with study.
I'll admit the same, in the opposite direction. I know a lot people who have done well for themselves without tertiary training, and would have to look very hard for the long term minimum wager. Like I said, those ones that I do know were that way because they actually couldn't do complex work. They went to pieces if conditions changed in the slightest, even in quite circumscribed roles, like checkout clerks, or washing cars.
The exception would seem to be people who have dependents. They can tolerate no loss of income, and can take no risks in the workplace (which often pay off - like speaking your mind about something, for instance), and have no spare time after hours. For them, without substantial benefits, tertiary training is impossible. I'm only partially in this situation, and it's impossible for me. I think this is a HUGE part of the reason my entire generation had kids much later than my parents. Getting married as a teenager and having 3 kids by the time you're 25, as my mother did, is an extremely hard road these days.
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NBH, in reply to
Yeah, Rich - that's most definitely an issue, and there's a very large difference in participation rates between industries with a strong tradition of training (including areas like baking or printing that don't have legal requirements per se.) and those without such a tradition. The current government's also stopped funding ITOs to support a lot of the baisc courses that you refer to - the health & safety and compliance courses that many firms used to participate in, and short courses that provide key skills but don't meet the necessary number of credits for a full qualification.
I do think you're being a bit harsh about businesses in NZ not caring about training, and there are some firms - even really small ones - that are very strongly committed to supporting skill development. I'd agree, though, that there's a tendency for businesses to complain about other parts of the 'skills ecosystem' (see perennial complaints about secondary school and tertiary graduates) without reflecting on their own role in cultivating and maintaining a skilled workforce.
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merc,
The PM works 19 hours a day 7 days a week, works he says, thinks, who knows? Training is good, learning to think is better.
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Lucy Stewart, in reply to
We’d probably need to be specific about what is meant by wealthy for me to know if that is our disagreement.
Good question. I would peg wealthy as people who can afford to support or mostly support children through a bachelor's degree. (Which is actually a pretty high margin). Then there's the too-rich-for-student-allowance-too-poor-to-help gap in the middle, a bit of an uptick for people who qualify for the full student allowance but whose parents can spare a few extra dollars (my partner was actually financially better off than me for a few years of uni, due to this paradox), and the very poor, who have no hope unless a lot of things go right (e.g. you can pay for a hall of residence with student allowance + work, or could five years ago, but try finding the several thousand dollar deposit you need to kick off the year...)
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BenWilson, in reply to
Yeah, I have kind of strong feelings about how much John Key plays up his poverty-stricken childhood when by so many metrics he was very middle-class.
Similar to my millionaire ex-partner (who loves Key). He was also raised by a solo mum. He talks up the hardship of impoverished life on Great Barrier. But the odd thing is that I never saw him want for anything. Nothing that mattered, anyway. As a teenager, she gave him the toys that formed the basis of his current fortune, the computers he cut his teeth programming on as a kid. She sent him to the same school as me (that's where we met), in the wealthiest part of town (in those days). She allowed him every freedom, including having his girlfriend sleeping over when he was still a schoolboy. Every holiday they went and stayed on the Barrier which is a fucking beautiful getaway, I know because I went with him twice and we spent every day fishing, snorkeling, mountain climbing, camping, surfing, hunting, and cruising around on her boyfriend's launch. He went skiing every winter with school mates, saving up money from his night job (something we both did), but the really expensive parts were often gifts, like new ski boots and clothes.
Yes, I lived in a bigger house. That's quite literally where the difference ended, until it came time to study, which my parents assisted with. His mother offered to assist, hoping always that he would study. But he had turned his mind against it, being one of those rare people that knows what they want from a young age, and is blessed with the talent (and good luck) to pull it off.
I think "good on him", but I have no time for his right wing politics, which fails totally to acknowledge the many socialist sources of his fortune*.
*ETA Amongst other privileges. I've just remembered that he told me that he also had a millionaire grandfather, his father's mother. That's a totally different circumstance to the life of the child of a solo mum from a long line of working class people. Just even having the example of that in your family gives you tremendous confidence. It has for me.
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BenWilson, in reply to
I would peg wealthy as people who can afford to support or mostly support children through a bachelor's degree.
Funny. That's what my parents and many of their generation did. And they considered themselves poor. On some measures they were right.
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Lucy Stewart, in reply to
I think “good on him”, but I have no time for his right wing politics, which fails totally to acknowledge the many socialist sources of his fortune
And that’s how you get ACT voters, basically; people who are so unable to see how the playing field was slanted their way by luck or birth that they assume that everyone else must have just not tried hard enough.
It’s a totally understandable bias, because no-one wants to think that they didn’t earn what they have – our society puts a premium on being seen to have earned your wealth and/or position. And mostly you do have to work hard to succeed, luck and starting position only get you so far. So it’s easy to focus on that and ignore the rest of it. It’s why Key plays it up – “worked my way up” is just so much more attractive than “was pretty likely to succeed anyway and got particularly lucky with my career choice”. But it betrays a terribly blinkered view of how the world works.
Funny. That’s what my parents and many of their generation did. And they considered themselves poor. On some measures they were right.
I imagine it cost my parents a lot more to mostly support me through uni than it did yours, though. I was thinking by today's standards. A generation ago - I'm honestly not sure what I'd call wealthy then, I don't have a good enough handle on the income spread.
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BenWilson, in reply to
I imagine it cost my parents a lot more to mostly support me through uni than it did yours, though.
I'm not sure if you mistake me. I mean my parents went through University with kids. I didn't, no way. I paid fees, got a loan and no allowance. My entire weekend spent working earned me $60. My folks covered 3 years of the fees, and let me stay with them. There wasn't any way I could have had kids, even if I'd wanted to. But yes, you're in your 20s, right? I expect you're right that it cost your folks more than it cost mine. I seem to remember that the subsidized percentage was higher in the first year(s?) of the scheme.
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BenWilson, in reply to
And that’s how you get ACT voters, basically; people who are so unable to see how the playing field was slanted their way by luck or birth that they assume that everyone else must have just not tried hard enough.
That's how you get the old ones. The young ones, as I was once, are more of a mystery.
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Kumara Republic, in reply to
And that’s how you get ACT voters, basically; people who are so unable to see how the playing field was slanted their way by luck or birth that they assume that everyone else must have just not tried hard enough.
In other words, nouveau riche ladder-kickers. They’re among the most hypocritical people I’ve ever heard of, even worse than ‘silver spooners’. Paula Bennett and Christine Rankin are just two of the more notable figureheads of this socialism-for-the-rich dogma.
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