REVISIT THE APPRENTICE

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Notes of Concern…

                      …Jackson Blair

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Revisit the Apprentice

Take a look at the budget for your local public school system.

Find the antacids!

And if your child is in private boarding school you are probably paying tuition, of after tax dollars, between $35,000 and $60,000.

Find the antacids!

You will spend much of your adult life saving money to pay the high cost of tuition at the college and university of choice for your children. And many of those children will leave school with staggering debt. “According to the Federal Reserve Bank, two-thirds of college graduates leave with some debt, and 37 million Americans are repaying a student loan right now (Walsh in ‘We Must Hate Our Children.’”

We are like lemmings. We do this just because we are supposed to do it. We do it because parents hope their children will be better off in a future world. And they think this is the only way. There are lots of paths to success in the world. And while it is true that most involve learning, they do not all require “formal/classroom” learning.

I suggest that you suspend the belief that more and more classroom learning is the only key to success and look at the facts.

You will go into retirement with far less than you need because of all the taxes, costs of raising children, and huge cost of home owning.  A significant portion of this outlay of monies relates to education.

The payoff is supposed to be that your children will go out into the world and enjoy a good life.

You read the newspapers. You watch the television news. Do you really think the payoff is there?

What I see are over- educated young men and women who cannot find work in their chosen field.

For those who do find careers the high cost of paying off their education debt is overwhelming.

I see young people regularly purchasing homes that cost hundreds of thousands of dollars more than I paid for our first home when I was in my twenties. And I see banks encouraging them to do it.

So between paying off debts, the costs of living day-to-day, and the uncertainty of the job market we have young couples loaded up with stress.

Here is a revolutionary suggestion: the system will not provide a better life for our children.

In my young life I was a banker with a very large Midwest bank that made many mortgage loans. We were taught never to lend mortgage money to anyone who did not have a 20% down payment ( unless they qualified for a federally insured loan (FHA) that permitted a 10% down payment.) We had another rule: the cost of the house purchased could not exceed a 250 percent of the borrower’s income.

These two simple provisions guaranteed young people were buying something they could afford. Further, they were buying something that could decrease in value without putting them “underwater.”

What happened between then and now? When did we throw out the good rules and begin playing with no rules?

I trace the problem to the indiscriminate issuing of credit cards and the lessening of banking regulation.

Not too long ago banks would loan you 110% of the value of the house you were buying so you could upgrade the things you wanted to change. Money was available everywhere.

No credit?

No problem!

What if the housing markets tanks?

Won’t happen!

Well, the lack of having basic credit rules came back to bite us.

The housing market did tank.

We need to get back to basics. It is time for us to take control of the costs of preparing children for a future and to be certain it is a realistic future. And it is a time for returning to the basic principles that should be in place for lending money.

In the early days of our slide to irresponsibility I served on a committee of one of the most prestigious business schools in the United States.

The Dean called me to ask me to serve on a committee that would be making fast track MBA degrees available to very bright students who had pursued a terminal degree, a PhD, in a subject field only to find there were no jobs available in that field. Now these brilliant young people needed to actually study something that would land them a job. So they wanted to come back for a business degree but they did not want to put in the two years the other students had to commit to their studies.

The committee was named Alternative Careers for PhDs.

I attended the first meeting. I came away with the following observations:

Really bright students earned a PhD after years and years of study without once looking to see if there was any demand for their newly acquired knowledge in the marketplace. This did not seem to me to qualify as a definition of “bright.”

Students who knew from the beginning that a business degree was marketable and were willing to study for two additional years to earn an MBA were to be faced with a bunch of PhD holders who would get the coveted MBA in half the time. And the reason for this was that they were so smart they qualified for a PhD.

I resigned from the committee.

I left with the realization that parents had not taught their children about the marketplace. And teachers, counselors and mentors had failed those young people, too.

There was a day, long ago, where you were apprenticed to someone who already knew what you wanted to learn and who practiced the trade.

You worked while you learned.

Your classroom was the everyday experience of actually working and learning.

These apprenticeships were available not only with plumbers, electricians, carpenters but with bankers, teachers and newspapers. It was highly desirable in European countries to seek an apprenticeship.

These young men and women did not enter the world of work with thousands of dollars of debt. They received wages commensurate with their knowledge, wages that were raised as they became more competent. The teacher, the actual worker, got help at a reduced cost in return for sharing his wisdom.

Maybe we ought to take a long look at what was good in the past.

There were some pretty good ideas out there during the time of apprenticeships. There were some wonderfully trained young people coming out of that experience. And more than a few of them were collecting salaries eventually that well exceeded what the new college degree holders could command.

If you are in the position to consider taking on an apprentice, but never gave it any thought, perhaps you could revisit the idea. Find a hard working and talented young person, hire them, train them and prepare them for a realistic future…one with a much greater guarantee of success.

If you are a parent facing the huge burden of the cost of education, maybe you should talk to your child about being an apprentice.

And if you are taking out loans to realize your dreams, no one is stopping you from applying the two measures I suggested earlier when commenting about reasonable borrowing, measures that would go a long way to providing financial stability in your life.

The writer welcomes your comments, ideas and suggestions.

Please take a moment to share your views on the topic by emailing

 jacksonblair@gmail.com or leaving a comment on his blog at

www.blair-notes.blogspot.com