SPEX 55

Issue 55 19 November 2014

SMU Political-Economic Exchange

AN SMU ECONOMICS INTELLIGENCE CLUB PUBLICATION

This Issue in Brief:

Demagogues and Populists in Europe

The European political scene has seen an influx of demagogues and

populists in recent times. Who exactly are these demagogues and

populists, and what do they stand for? Teo Yi Heng gives a lowdown

on the phenomenon, and analyses their implications on the various

European political systems.

E-Commerce in India: A “Logistical” Study

The e-commerce sector is gaining popularity around the globe, and

India is no exception. Ishita Parbat discusses the characteristics of

the e-retail industry in India, and how it is poised for further growth

in the future.

Have US College Degrees Lost Their Value?

More and more youths in the United States are entering the

workforce armed with a college degree: boon or bane? Join Brenda

Hong in her discussion where she highlights statistics regarding

higher education in the US, and how they may not bode well for

those in pursuit of a degree to better their future prospects.

In collaboration with

Proudly supported by

2

Issue 55 November 2014

Dema-who?

A demagogue, according to the Merriam-Webster dictionary, is ‘a leader who uses popular prejudices and

false claims and promises in order to gain power’1. The word itself is an amalgam of the Greek words

‘demos’ and ‘ago’ (‘demos’ meaning people and ‘ago’ meaning to manipulate, hence ‘people

manipulator’) and is a word that should have particular resonance in Europe, especially in places still

scarred by the flames of the Second World War when rampant anti-Semitism, nationalism and

expansionism, fanned and led by demagogues and populists, culminated in one of history’s most

infamous acts of ethnic cleansing.

The word ‘demagogue’ should be a warning to voters. It should cause them to scrutinise the claims and

promises made and it should tell them that this particular politician is treading on dangerous ground.

The key word here is should.

The Popular Populists

A populist on the other hand, again according to the Merriam-Webster Dictionary, simply refers to ‘a

member of a political party claiming to represent the common people’2. Many would agree that this is

indeed admirable.

However, in modern parlance, the word has become almost derogatory in its use. It is often used to refer

to a politician who panders to the general electorate through emotional rhetoric or economically

unfeasible policies (or more commonly both) and is thus almost interchangeable in use with the term

‘demagogue’.

The Rise of the Demagogues

If one were to look at the current state of European politics, it would not be amiss to describe the wave of

support for populists and demagogues as ‘disconcerting’. Indeed, the electoral fortunes of parties such as

the Front National (FN) in France and the United Kingdom Independence Party (UKIP) in the United

Kingdom in the recent 2014 European Parliament elections show that rampant populism with a hint of

anti- immigration demagogy seems to be the electoral strategy of choice. Indeed, UKIP has been so

successful in exerting electoral pressure on the mainstream parties in the UK that the current

government has hardened its stance considerably on many issues, especially with regard to immigration3

and European Union integration to the point of promising a national referendum on EU membership4,5.

Demagogues and Populists in Europe

by Teo Yi Heng

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Even in (Supposedly) Liberal Northern Europe

During the Dutch national elections in 2010, Geert Wilders, a man (in)famous for antics such as comparing

the Koran to Hitler’s Mein Kampf, romped into the position of political kingmaker after his party, the Party

for Freedom, garnered 15% of the vote and came in third in the elections (he later lost the position after

electoral losses in the 2012 elections). And his party, which like its founder takes on a virulent anti-

immigration and anti-Islam stance, was not the only one of its kind making headway in supposedly liberal

Northern Europe. Up north in Sweden and Finland, the Sweden Democrats and Finns Party both increased

their standings on the back of a populist anti-immigration platform.

And it’s Even Worse Down South

But even Geert Wilders pales in comparison to the thuggishness of the demagogues in Southern Europe.

The Golden Dawn party, a Neo-Nazi outfit that spouts virulent anti- immigrant rhetoric, has been

connected to numerous hate crimes, anti-Semitism and even the murder of the rapper Pavlos Fyssas. It

resulted in the arrests of many of the party’s top leaders.

In Hungary, Jobbik holds the dubious honour of being one of the highest polling parties in national

elections among far-right populist parties in Europe. More worryingly, it is also a party of rampant anti-

Semitism, homophobia and racism. That such a party can rise to its current position as one of the

strongest performing single parties in the Hungarian Parliament says much about how extremist politics

have become increasingly mainstream in Hungarian politics in recent years.

4


European Parliament Election Results

National Parliament Election Results

5


Differences among the Dissidents

The graphs above show the electoral results of a collection of populist and far-right parties ranging from the

thoroughly unpalatable Jobbik and Golden Dawn, to the comparatively moderate UKIP. These parties have

many similarities, but also a few key differences.

One key difference would be their attitude towards Zionism and Israel in general. As mentioned, Jobbik is

extremely anti-Semitic and the Front National also has historical anti-Semitic roots. However, Geert

Wilder’s Party for Freedom is strongly pro-Israel and has frequently voiced support for the nation. This

particular difference between the Front National and the Party for Freedom contributed greatly to the

difficulties in their alliance and may have also contributed to the drop in electoral support in the

Netherlands for the Party for Freedom. Most of the other parties have no determined anti-Semitic

tendencies and as such, fears of a Europe-wide surge of anti-Semitic parties are largely unfounded,

although a large increase in domestic anti- Semitism in certain countries is indeed a problem.

Another difference would be their historical origins. For example, the Front National in France and the

Freedom Party in Austria have long historical roots that far predate their peers. Most of the populist

parties formed in the 1990s and a few, such as the Party for Freedom in the Netherlands and Jobbik

in Hungary formed in the 2000s.Thus, it would not be accurate to term this populist wave as an

isolated phenomena stemming from the 2008 economic crisis. Most of the parties predate the crisis and

indeed, the Freedom Party in Austria enjoyed great electoral success in the 1990s.

The Fourth Reich?

However, a unifying thread that ties these parties together would be the streak of populism and

demagogy that they employ in their electoral strategies. These parties often prescribe simplistic and

economically illogical salves to deep-seated and multi- faceted problems and often (wrongly) attribute

blame for national hardship on a small sub-set of the population. For the case of immigration, it is

conveniently a sub-set that has little to no electoral presence.

When phrased this way, the current wave of demagogy inevitably raises the specter of the Third Reich,

specifically in the way Adolf Hitler and the Nazi Party blamed the Jews for Germany’s misfortunes after the

First World War. However, there are, once again, key differences.

The first obvious difference is that there is no coherent bloc or alliance among these parties (although

attempts have been made, such as the above example between the Front National and the Party for

Freedom). Although the strategies they employ to gain electoral support may be similar, the targets for

their rhetoric are often different and indeed sometimes conflicting. Some target Islam, some target Jews

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and while most target immigrants, there is no standard ‘set’ of immigrants that they target. ‘Immigrant’ is

not a real social group. It is a mishmash of various nationalities and cultures and is simply defined as being

‘non-native’ which would be different for each country (African asylum seekers for the Nordic countries

and Eastern Europeans for the UK and France). Besides, most of the more moderate populist parties

would hesitate before allying with the likes of the Golden Dawn and Jobbik.

Another difference would be that the parties do not have any expansionist tendencies. Indeed, most of the

parties advocate a much more insular path for their respective countries and have no desire to repeat the

follies of the Second World War. Much of their political rhetoric is directed at domestic targets and not at

those outside the country, and most of the issues raised are also domestic in nature.

Indeed, even the ‘tsunami of demagogy’ is sometimes an exaggeration of the situation. If one were to look

back at the graphs above, one would notice that most of the parties in question poll considerably lower in

national elections as compared to the European Parliament elections. As the Washington Post noted, the

European Parliament election results “were magnified by the low turnout for a low-stakes campaign”. This

made it far more beneficial for extremist parties who are able to instil more fervour in their followers.

As such, fears of a return to the Third Reich are misplaced at best. The fact remains that there are

numerous key differences and mitigating factors that almost ensure that there will be no coherent

coalition of demagogues in the near future.

So Everything is Peachy?

No. The rise of demagogues and populists in the political fringe is still able to exert electoral pressure on

the incumbents as evidenced by the hardening of policy by the current government of the UK, as well as

Geert Wilder’s brief role as kingmaker in the Netherlands. This effect is multiplied by the fragile coalition

politics practiced by most European countries which makes it easier for minority partners in governing

coalitions to dictate terms even if they received a small fraction of the national vote.

The rise of demagogues and populists in European politics has also corresponded to an increase in the

incidence of anti-Semitism, Islamophobia, racism and hate crime in general and it does not take much to

see that it is part of a vicious cycle that will only get worse if the cycle is not broken. Fiery rhetoric against

minority groups by populist demagogues cast the blame for a country’s misfortune on a minority group.

That in turn leads to hate crimes and the isolation of the group in question which in turn increases

misunderstanding and thus the possibility of further flare ups. The fact that many minority groups in

European cities already live in racial ghettos only serves to increase isolation and thus compound the

problem.

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The Return of the Moderates

While it is true that the current rise of populists and demagogues will not coalesce into some unitary force

any time soon (if ever), moderates should still refrain from simply treating this as just some transient

phase of the electoral cycle. There remains a deep pool of dissatisfaction within the electorate which will

not dissipate any time soon, especially with much of Europe stuck in a socio-economic rut. Just because

said dissatisfaction is channeled in an illegitimate way does not make the dissatisfaction illegitimate in

itself.

Moderates and centrists, especially those already in government, need to band together to solve the core

problems causing voter dissatisfaction such as unemployment, wages and social mobility. Economic

hardship, while not the only reason for the rise in support for populism, remains an important core driver

for their support. As such, by alleviating, or at least mitigating the economic hardship faced by the

electorate, moderates can diminish a portion of the support for demagogues that pander to the

economic uncertainty of the electorate with populist, short term policies that may seem good on the

surface but may actually compound the problem in the long term. Therefore, policies to boost long term

employment (especially youth unemployment for countries which have overly rigid labour markets),

productivity-led wage growth and holistic social mobility are crucial in combating the spread of

demagogy.

Moderates should also speak out strongly against populism and demagogy, especially when they target

the minority and other vulnerable groups, and refrain from ‘jumping onto the bandwagon’ so to speak.

While some have spoken out about the rise in populism and demagogy, many have remained silent, or

instead elected to actually lean towards the populists in an attempt to reclaim the votes lost. This

indirectly legitimises the actions of the demagogues and should be avoided.

And lastly, moderates should directly debunk the short-term populist policies advocated by most

demagogues and expose the long term implications of their plans. By directly attacking the policies of

the demagogues, moderates will be able to expose the false claims and promises of the demagogues and

thus help to neutralise the effect of their rhetoric.

The rise of demagogues and populists in the European electoral scene is a symptom, and moderates

need to recognise this threat, as well as the underlying causes of political malaise and socio-economic

drudgery.

They ignore it at their own peril.

8


References 1. Demagogue. (n.d.). Retrieved October 18, 2014, from http://www.merriam-webster.com/dictionary/ demagogue

2. Populist. (n.d.). Retrieved October 18, 2014, from http://www.merriam-webster.com/dictionary/populist

3. Hennessy, Mark. “Cameron’s Tough Talk on Immigration Sparked by Ukip Electoral Threat ; PM’s Remarks May Be Seen as ‘Nasty’,

European Commission Warns.” The Irish Times. The Irish Times. 2013. Retrieved October 19, 2014 from HighBeam Research:

http://www.highbeam.com/doc/1P2-35418174.html

4. Cameron Pledges EU Referendum. (2013, January 23). Kuwait News Agency. Retrieved October 19, 2014, from

http://www.highbeam.com/doc/1G1-316153421.html?

5. Settle, Michael. “Boost for UKIP as PM Struggles with EU Referendum.” The Herald. Herald & Times Group. 2012. Retrieved October 19,

2014 from HighBeam Research: http://www.highbeam.com/doc/ 1P2-34019680.html

6. “A ONE MAN WAR ON ISLAM ; - Freedom of Expression? Geert Wilders.” Daily Mail (London). McClatchy- Tribune Information Services.

2008. Retrieved October 19, 2014 from HighBeam Research: http:// www.highbeam.com/doc/1G1-177344277.html

7. “A false prophet; Charlemagne.(Living with the far right)(Geert Wilders).” The Economist (US). Economist Newspaper Ltd. 2010. Retrieved

October 19, 2014 from HighBeam Research: http://www.highbeam.com/ doc/1G1-238880375.html

8. “Dutch Surprise; Elections in the Netherlands.” The Economist (US). Economist Newspaper Ltd. 2012. Retrieved October 19, 2014 from

HighBeam Research: http://www.highbeam.com/doc/1G1-302273952.html

9. Damian Mac Con Uladh. “Killing of Rap Artist Sparks Street Protests ; Hip-Hop Musician Pavlos Fyssas Stabbed to Death by Member of

Golden Dawn Party.” The Irish Times. The Irish Times. 2013. Retrieved October 19, 2014 from HighBeam Research:


10. SAM SOKOL ; Reuters contributed to this report. “Jobbik’s third-place finish worries Hungary’s Jews. Becoming a major political player

raises level of hate in society.” Jerusalem Post. The Jerusalem Post. 2014. Retrieved October 19, 2014 from HighBeam Research:


11. “Rep. Crowley Leads 50 House Members in Call for the Rejection of Shocking Anti-Semitism and Homophobia Advocated by Right Wing

Hungarian Political Party.” US Fed News Service, Including US State News. The Associated Newspapers of Ceylon Ltd. 2012. Retrieved

October 19, 2014 from HighBeam Research: http://www.highbeam.com/doc/1P3-2694536431.html

12. “United against Jobbik; Anti-Semitism in Hungary.” The Economist (US). Economist Newspaper Ltd. 2012. Retrieved October 19, 2014 from

HighBeam Research: http://www.highbeam.com/doc/1G1-311144518.html

13. Valls-Russell, Janice. “From skinheads to the national front: facets of French anti-semitism.” The New Leader. American Labor Conference

on International Affairs. 1990. Retrieved October 19, 2014 from HighBeam Research: http://www.highbeam.com/doc/1G1-8732442.html

14. Marquand, Robert. “Quran-banning advocate Geert Wilders heads to ground zero.(World).” The Christian Science Monitor. The Christian

Science Publishing Society. 2010. Retrieved October 19, 2014 from HighBeam Research: http://www.highbeam.com/doc/1G1-

236857088.html

15. Cluskey, Peter. “Wilders Isolated as Dutch Shrink from le Pen’s ‘Toxic Baggage’ ; Freedom Party Leader’s Ties with Front National Have Hurt

Him Politically.” The Irish Times. The Irish Times. 2014. Retrieved October 20, 2014 from HighBeam Research:


16. CONSTANT BRAND, Associated Press Writer. “EU report: anti-Semitism sees noticeable increase across Europe.” AP Worldstream. Press

Association, Inc. 2004. Retrieved October 20, 2014 from HighBeam Research: http://www.highbeam.com/doc/1P1-92964543.html

17. Editorial, B. (5). Rise of the demagogues. Washington Post, The.

18. CONSTANT BRAND, Associated Press Writer. "EU report: anti-Semitism sees noticeable increase across Europe." AP Worldstream. Press

Association, Inc. 2004. Retrieved October 20, 2014 from HighBeam Research: http://www.highbeam.com/doc/1P1-92964543.html

19. Hockenos, P. (2011). Europe's Rising Islamophobia. Nation, 292(19), 22-26

20. PAUL AMES, Associated Press Writer. "For Europe, a warning on rising racism." AP Worldstream. Press Association, Inc. 2004. Retrieved

October 20, 2014 from HighBeam Research: http://www.highbeam.com/ doc/1P1-98960631.html

21. "Le Ghetto; Paris's Suburbs Are Ablaze.but France's Ruling Elite Still Don't Comprehend the Racial Tinderbox They've Created." Daily Mail

(London). McClatchy-Tribune Information Services. 2005. Retrieved October 20, 2014 from HighBeam Research:

http://www.highbeam.com/doc/1G1-138372834.html

22. "Scotland's Cities Could Soon Be Migrant Ghettos Say Police Chiefs; INFLUX: Eastern European Gipsies Have Flooded into Scotland

Recently." The Mail on Sunday (London, England). Solo Syndication Limited. 2008. Retrieved October 20, 2014 from HighBeam

Research: http://www.highbeam.com/doc/1G1-176966494.html



http://www.highbeam.com/

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http://www.highbeam.com/doc/

9


E-Commerce in India: A “Logistical” Study by Ishita Parbat

India is at the cusp of a digital revolution. With the Internet becoming an increasingly crucial part of urban

India, the drop in broadband subscription prices and the availability of 3G are further aiding this trend. All

this coupled with the convenience of online shopping have made E-commerce the next big thing.

Although it has been around for 15 years, Indian e-commerce has witnessed about 50% of its growth only in

the past 5 years. This marvelous growth can be attributed to factors such as an appreciable increase in the

number of Internet users, an increase in acceptability of online payments, as well as the tremendous

increase in Internet enabled devices.

Online travel dominates the e-commerce industry with an estimated 70% of the overall market share.

However, e-retail in both its forms; online retail and market place, has become the fastest-growing

segment, increasing its share from 10% in 2009 to an estimated 18% in 2013. Cash-on-delivery has been one

of the key growth drivers and is lauded to have accounted for 50% to 80% of online retail sales. If this robust

growth continues over the next few years, the size of the e-retail industry is set to be 10 to 20 billion USD by

2017-2020.

The growth in e-commerce is a huge burden on the supporting logistical functions. Retailers have been

offering infinite choices spread over a massive geographical area because the domain of competition is not

based on simple volume anymore and has moved to fulfilling ever-shortening delivery timelines with

uniformity in consistency and predictability.

Characteristics of the Indian E-Commerce Market: • ‘Cash-on-Delivery’: The consumer purchasing behavior in India comprises of a thorough inspection

of the product and subsequent payment. Moreover, Indian consumers impart little trust to the product

delivery system. Hence, ‘cash-on -delivery’ becomes the natural choice of consumers.

• Return Policies: Indian consumers demand the return process to be smooth and hassle free. This has

compelled retailers to take full responsibility of returns so as to develop trust and confidence among

consumers, which leads to subsequent purchases and positive word-of-mouth publicity.

• Free and Quick Home Delivery: is offered by retailers within a pledged timeline. This model might be

unsustainable in the long haul, but it definitely has to be made available by retailers currently to be able to

compete in the market.

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Major players in Indian E-Commerce

Flipkart (inventory-led model)

Starting off as a sheer price comparison portal, Flipkart has converted into an e-retailing giant that recently hit 1 billion USD in gross merchandise volume.

It has four established warehouses in Delhi, Bangalore, Mumbai and Kolkata.

Multiple warehouses allow Flipkart to maintain a balance between inventory and cost of delivering goods.

It also has a dedicated logistics arm called E-Kart that provides robust back end support to Flipkart and ensures timely deliveries.

E-Kart has also extended back end support to other retailers in recent times to achieve economies of scale.

Flipkart’s recent acquisitions include Letsbuy.com, Myntra.com and Chapak.com to name a few.

Amazon India (market-place led model)

Amazon India started off in the electronic goods market in early 2013 and closed 2013 with almost 15 million products to offer.

Amazon India has two fulfillment centers in Mumbai and Bangalore with plans to start five new centers across the country.

It also has a dedicated logistics arm that (Amazon Logistics) that offers same-day delivery.

As we can see, the most critical aspects of distinction among providers today are almost negligible, with

examples including no delivery fees, doorstep delivery, traceability solutions and convenient reverse

logistics. E-commerce retailers are well aware of these challenges and the impending need for investment

of capital and operational assets to meet them. These factors will compel retailers to bolster their existing

logistics infrastructure to meet market requirements.

In the coming years, infrastructure will demand a large proportion of investment in e-commerce. An

estimated addition of 7.5 to 15 million sq ft in fulfillment centers alone can be expected in the next three to

four years (6 to 12% of total warehousing space in India). The total spend on warehouse and additional

sortation centers is estimated to be as high as 3 to 6% of top-line revenues. As for employment, an

estimated 25,000 people make a living in e-retailing warehousing and logistics. After considering

efficiency improvements in individual performance and productivity (IPPs) in the delivery networks, an

additional increase in employment of close to 75,000 people is expected by 2017-2020. This represents an

increase in employment by almost three times.

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Upcoming Trends:

The evolution of logistics in the country shall determine the future course of the e-retailing industry

In spite of tremendous potential, major e-retailers have yet to report profits thanks to wafer-thin

margins and high delivery costs

FDI in inventory-led retail may be a game changer by allowing global giants like Alibaba and

Rakuten to make an entry. Amazon has recently announced a 2 billion USD investment operating

on a marketplace model. Allowing FDI could be an imperative factor in attracting significant

investments, resulting in better infrastructure and a more robust supply chain

The e-commerce industry in India is poised for a dramatic period of exponential growth in the next three to

five years. This growth is expected to draw generous investments in both supporting infrastructure as well

as innovative and game changing business models.

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References

1. PWC Publications (2014) “Evolution of e-commerce in India - Creating the bricks behind the clicks”. Retrieved from: http://www.pwc.in/assets/pdfs/publications/2014/evolution-of-e-commerce-in-india.pdf

2. EY (2013) “Re-birth of e-Commerce in India”. Retrieved from:

http://www.ey.com/IN/en/Industries/Technology/Re-birth-of-e-Commerce-in-India

3. Business Monitor Online (2014) “BMI Industry View – India Q4 2014”. Retrieved from: https://bmo-businessmonitor.com.libproxy.smu.edu.sg/sar/reports/view?productid=2363&issue=20141001&iso=IN

http://www.pwc.in/assets/pdfs/publications/2014/evolution-of-e-commerce-in-india.pdf

http://www.ey.com/IN/en/Industries/Technology/Re-birth-of-e-Commerce-in-India

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Have US College Degrees Lost Their Value?

by Brenda Hong

Attaining a college degree has always been seen as an important educational milestone for US students as

it is regarded as a significant achievement in higher education. Part of the American Dream includes

obtaining a college degree and getting a well-paying job to kick-start an individual’s career.

A college degree has always been viewed by employers as a reflection of the skills, perseverance, networks

and knowledge which a candidate possesses. This has long been an accepted mode of assessment for

hiring employees in the workplace and generally, it has been found graduates often land better jobs and

enjoy better job benefits since employers feel that they are of a higher ability. This is not to say that there

are no non-college degree holders that are able to get good jobs, but the chances are lower and these

individuals have less credentials to fall back upon if they lose their job.

The importance of college degrees is recognized among all students, parents and the general community

alike and this has led to more and more people to go after a college degree. As shown in the graph below,

the percentage of young American adults with a college degree has risen from 21.9% in 1975 to 33.5% in

2012.

20.0%

22.0%

24.0%

26.0%

28.0%

30.0%

32.0%

34.0%

1975 1995 2012

Pe

rce

nta

ge

Year

Percentage of Americans aged 25-29 with College Degrees from 1975-2012

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While the American population is getting more sophisticated and knowledgeable, there are several

repercussions on the value of a college degree stemming from this increase as well. When more people

have a degree, it loses its prestige as a tool which can be used by employees to show their ability to their

potential employers. The degree certificate becomes a basic requirement rather than an edge over others,

and employers look to other means when making hiring decisions.

Research has shown that employers are placing more focus on the college from which the degree

originates (Ruiz, 2011), as there is a general sentiment that many colleges place more emphasis on scoring

highly in institutional rankings rather than training students and equipping them with skills needed in the

workplace. For example, there has been a lack of ethics education for college students, especially in

professional degrees and this has been cited as a one of the reasons for an increase in white-collar crimes

in the US (Staton, 2014). Based on the Manpower Outlook Survey, some employers even thought of

college degrees to be misleading as the college graduates lacked the skills but still demanded high salaries

since they were holding a degree (Manpower Group, 2013).

Moreover, employers are also looking beyond the college degree as they feel that the degree is

insufficient. Some employers are looking into grades from external specialized tests such as the

Bloomberg Aptitude Test, while others are looking for further higher education attainments such as

Masters degrees.

All these factors lead on to the question of whether a college degree is still worth the pursuit. The

opportunity cost is high, as not only do these graduates start work later than their peers who do not go to

college, they have to also fork out a huge sum of money for their college fees. The cost of going to a

private college has gone up significantly over the years, with tuition fees alone rising from $10783 in 1973

to $30094 in 2013 (CollegeBoard, 2014).

Often, a lack of liquidity forces students to take up loans and they end up being burdened with hefty

student loans upon graduation. Many college students are unable to afford the full cost of their education

and hence take up student loans, with the hope of getting a good job after graduating and being able to

comfortably pay the loan back in installments. Unfortunately, the second part of the causation does not

seem to hold as many students find that their degree now does little to help them secure a good job.

Student loan delinquencies have hit a high of 41% in the recent years, showing the struggles graduates are

facing to pay back their student loans. Since 2007, while the number of hopeful students taking up loans

has increased over the years, the default rates have increased as shown in the diagrams below.

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0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

4500000

5000000

2007 2008 2009 2010 2011

Nu

mb

er

of

Lo

an

s

Year

Number of College Loans Taken Up from 2007 - 2011

11.5%

12.0%

12.5%

13.0%

13.5%

14.0%

14.5%

15.0%

15.5%

16.0%

2007 2008 2009 2010 2011

Pe

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of

De

fau

lt

Year

Percentage of Default of US College Loans from 2007 - 2011

It is easy to see that degrees do not come cheap, and US students should reconsider if a degree is really

worth obtaining. Some students have opted for alternative routes after high school, going into specialized

courses such as culinary training programs which provide training for specific vocational skills. These

courses typically have a shorter duration than college education, and are able to meet employer demands

more effectively than college degrees in certain industries.

The changes in attitudes towards college degrees in society have altered the way in which degrees are

recognized, and while the degree probably still keeps its value as an educational attainment, it has lost its

value of being a unique selling point which an employee can depend on to show his ability. A degree is only

as valuable as how society views it to be, and it seems like a college degree in the US is no longer simply

taken at face value as it used to be.

16


References

1. CollegeBoard. (2014) “Tuition Fee Charges Over Time 1973-74 Through 2013-14, Selected Years”. Retrieved from: http://trends.collegeboard.org/college-pricing/figures-tables/published-prices-national#Tuition and Fee and Room and Board Charges over Time

2. Lee, L. (17 June 2012) “Bachelor’s Degree: Has it Lost its Edge and Value?”. The Christian Science Monitor.

Retrieved from: http://www.csmonitor.com/The-Culture/Family/2012/0617/Bachelor-s-degree-Has-it-lost-its-edge-and-its-value

3. Lofnheider. (24 October 2011) “Today’s College Degrees Lose Their Values Faster Than New Cars”.

PoliticusUSA’s Archives. Retrieved from: http://archives.politicususa.com/2011/10/24/college-degree-value-car.html

4. Manpower Group. (2013) “Manpower Employment Outlook Survey”. Retrieved from:

http://www.manpowergroup.com/wps/wcm/ connect/manpowergroup-en/home/thought-leadership/meos/#.VDdah9SUeFc

5. Rampbell, C. (12 June 2013) “Data Reveal a Sharp Rise in Americans with College Degrees”. The New York

Times. Retrieved from: http://www.nytimes.com/2013/06/13/education/a-sharp-rise-in-americans-with-college-degrees.html?pagewanted=all&_r=0

6. Ruiz, R. (19 October 2011) “Are Too Many Americans Earning Four Year Degrees?”. The New York Times.

Retrieved from: http://thechoice.blogs.nytimes.com/2011/ 10/19/degree-debate/

7. Staton, M. (8 January 2014) “The Degree is Doomed”. Harvard Business Review. Retrieved from: http://blogs.hbr.org/2014/01/the-degree-is-doomed/

8. The White House, USA. (2013) “Cohort Default Rates for Federal Student Loans”. Federal Student Aid –

Office of US Department of Education. Retrieved from: https://studentaid.ed.gov/about/data-center/student/defaul

9. The White House, USA. (2013) “Official Student Default Rates for Schools”. Federal Student Aid – Office of

US Department of Education. Retrieved from: http://www2.ed.gov/offices/OSFAP/defaultmanagement/cdr.html

https://studentaid.ed.gov/about/data-center/student/defaul

https://studentaid.ed.gov/about/data-center/student/defaul


SEIC Correspondents for Issue 55:

Wong Shi Jun Aaron (Vice President, SPEX) Undergraduate Lee Kong Chian School of Business Singapore Management University [email protected]

Zhou Li (Creative Director) Undergraduate School of Economics Singapore Management University [email protected]

Teo Yi Heng (Writer) Undergraduate School of Economics Singapore Management University [email protected]

Ishita Parbat (Writer) Undergraduate School of Information Systems Singapore Management University [email protected]

Brenda Hong (Writer) Undergraduate School of Economics Singapore Management University [email protected]

SPEX 55

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Transcript of SPEX 55