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February 5, 2015

The fatal shortcoming of Obama's proposal for free community college for all

A February 4 op-ed in the Wall Street Journal notes that Obama's "free community college" proposal ignores a fundamental, immutable economic principle:
The spirit behind President Obama’s recent proposal to make community college free is understandable, but he has fallen victim to the fallacy of composition. He has made the mistake of believing that if one person benefits from an action, then everyone else who takes the same action will also benefit. Economics teaches us otherwise.
Although getting an associate degree or some college education at a community college may benefit any one person, in the aggregate a policy that increases the supply of people with associate degrees can backfire unless it has been designed to fill an existing excess demand. Otherwise such a policy will merely exacerbate an existing excess supply of labor with that level of educational attainment.
Unless our economy magically creates positions for this excess supply of labor, what we'll end up with is overtrained restaurant workers.

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