Call me mad but shouldn't a certain degree of market thinking be exercised when young people and graduates are deciding what career path to follow? And before anyone goes off on one and starts calling me some sort of neoliberal market fundamentalist crack head, I must make it clear that I'm absolutely not of that political shade. I'm just somebody who can appreciate the merit of using market intelligence in order to calibrate future career movements.
To me it's pretty simple and can be illustrated by using the specific example of law school. If the legal labour market is saturated and overflowing why, unless you had an unflinching desire to practice law, would you go to law school? You wouldn't just have a crack at it on some vague notion that you could make a good living out of law or that it may a respectable career - because foresight would tell you that if you did, speaking from experience, you'd probably end up being gobbled up and spat out by the job market.
So my recommendation is pretty simple: young people, students and graduates who are sitting down to make the biggest decision of their lives need to think and act like a shrewd financial investor. They need to adopt market thinking and adopt an effective strategy. These young people are after all about to invest a huge amount of personal time, effort, emotion and money into their career project. And like any other investment, in order to get the best returns on a personal investment, young people should be encouraged to understand the movement of the job market.
They should be encouraged to understand where the demand is and where in the market there is over-supply. This is pretty basic strategic thinking that can help anyone to spot a gap in the market. So if law stocks are on an endless slump, why would you pile your personal equity into law school? But if the IT and creative industry is buoyant it makes sense to put your money and time there - doesn't it?
The Law School Bubble in the US has been illustrated by the infographic and has caught countless students and graduates off guard. A story that has been replicated in the UK.
But to allow this to happen we need to encourage the education system and the labour market to become informationally efficient. If there is a free flow of information between the place of learning and the labour market students would be able to make informed and intelligence-driven career choices as opposed to going on old cliches and received wisdom. The labour market, like any market, is dynamic and what is in demand one year is in over-supply the next.
The signalling of what is in demand and what is not would help to create a prescient education system that allows staff and students to adapt themselves in the best way to the future. An education system that tracks the shifting sands and demands of the labour market as opposed to one that lags behind the movements of the market would do infinite good. A tracking education system would help to create a more flexible, dynamic and resilient workforce and not one that is bloated and schlerotic as it is currently.
This lack of interplay and communication is just another classic of economics: Joseph Stiglitz's famous theory of information asymmetry. In the immediate case we're looking at the lack of informational symmetry between schools and the labour market. And because of this lack of symmetry between the two systems the education system is almost perenially informationally deficient. This deficiency then has many pernicious effects including the driving of perverse incentives such as the the perpetuation of old truths.
Yes the labour market used to have a demand for law students but this has since changed, so the proper signals should be made. Unfortunately the signals are not sent. This lack of signalling is what causes the information deficiency. This then causes young people, like it did with me, to go down dead end career paths. I was one of nearly one thousand law students who graduated on the island of Ireland in the summer of 2010 who entered a legal labour market that was haemorrhaging jobs as opposed to creating them. This effectively rendered my degree worthless. The legal labour market had collapsed and like it always is the little people got hit hardest.
Had the education system and labour market enjoyed information symmetry then it's likely that I would have chosen to follow a career in a growth industry instead of relying on old half truths and choosing to study law. One example at hand: there's only one fully qualified sports nutritionist in Northern Ireland which is where I'm from. Why hadn't the market communicated to the education system that there is a need and a demand for jobs in this area?
This is a textbook example of market failure; when the market fails to signal to market actors what is in demand and what isn't. Had there been an information symmetry the market would not have failed and it is likely that I would have chosen to study sports nutrition. Rugby and sport is after all my undying passion. Not law, that was just seen as a respectable choice that would pay well - how false that turned out to be!
One last point: another age old principle of sound investment is the need to have a diverse portfolio. This gives the investor more room, scope and maneuverability to respond to any unforeseen changes in the market. And so this applies just as readily to the young person. Not only should they be strategic in their main investment but they should have a diversity of interests and pursuits which will strengthen and embolden their total investment package. Translation: take up hobbies and extracurricular activities.
The moral of my story is ultimately the need for schools and young people to exercise strategic market thinking. This ultimately requires more interplay and communication between the education system and the labour market. I have discussed this before where I said that schools tend to think in caves, work in caves (Education: A Silo, Entire of Itself).
If schools and policymakers were to encourage more market thinking and cross-communication we could begin to erect a more fluent society. A more top down society that facilitates an effective and more harmonious, uninterrupted flow between the education system and the labour market. And even though the market is very much not in vogue at the moment I think we can all agree that would only be a thing good for everyone.