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America Adding Part-Time Jobs in Recovery; Higher Education Prices Continue to Rise; Education Programs in Other Countries Examined
Aired August 24, 2013 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, CNN ANCHOR: Part-time jobs, a full-time worry for millions of American families.
I'm Christine Romans. This is YOUR MONEY.
ROMANS (voice-over): Only in America can you grow talent like this. We like to think of America as innovation nation. But the numbers reveal a slogan that should read, "part-time America."
Call it the "Do you want fries with that?" economy. Part-time jobs have exploded, nearly doubling since 2007. And 8.2 million Americans who would rather have a full-time job punching the time clock part- time instead.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We're not there yet.
ROMANS: President Obama admits there is more work to do, but is his signature achievement, Obamacare, partly to blame?
REP. SHELLEY MOORE CAPITO, (R) WEST VIRGINIA: More companies have said that because of this law they'll have to shift full-time workers to part-time.
OBAMA: Teen retailer Forever 21 now the latest company demoting some full-time workers to part-time, not because of Obamacare, the chain says. It's just good business. But even unions are worried. The Teamsters and two others sending a letter to Democratic leaders saying the Affordable Care Act could, quote, "destroy the foundation of the 40-hour work week that is the backbone of America middle class."
A middle class in trouble with 600,000 more Americans forced to take part-time gigs since March. Whatever the reason, the numbers don't lie. Is America becoming a nation of part-timers?
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ROMANS: Those are the numbers, but let's get personal. Dolly Martinez works two part-time jobs. She hasn't been able to find a full-time position since she graduated from college in 2009.
(BEGIN VIDEO CLIP) DOLLY MARTINEZ, WORKS TWO PART-TIME JOBS: I usually wake up between 6:30 and 7:30, and then, of course, I would head over to the coffee shop first. That's usually an 8:00 to 2:00 shift. And then, of course, I would have like a 10-minute break, which isn't enough. And then, of course, I'll have an hour break from 2:00 to 3:00 going to my next job, and I'll work from 3:00 to 9:00, but that job will give me a 30-minute break. After that I get done about 9:00 and then head home.
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ROMANS: Dolly says she brings home just about $1,500 a month. Steven Moore is an editorial writer for the "Wall Street Journal," Dan Gross is the business editor for "Newsweek" and "The Daily Beast." Dan, many Americans are just like Dolly. They're asking, where is my recovery? Median household income has fallen nearly 4.4 percent to just over $52,000 in the four years, since the recovery began, since the recovery began. Can America lead if the kinds of jobs we're growing are Dolly jobs?
DANIEL GROSS, BUSINESS EDITOR "THE DAILY BEAST": The short answer is no. We have a jobs crisis and we also have a wage crisis. In other words, we are adding jobs that are 7 million more private sector jobs than there were three years ago, but they're not paying more. They're not paying more because companies don't feel they have to. There is a lot of slack in the labor market. They're able to move people around, and this is also why they're not making people full-time. They don't feel the pressure to treat these employees, especially in these service industries like retail, to give them the terms they want. These people would prefer to have full-time jobs.
ROMANS: It's a bartender economy for sure. Steven, Dolly also told us she has $15,000 in student loans. The president spent the week pushing to make college more affordable. Listen.
(BEGIN VIDEO CLIP)
OBAMA: We can't price the middle class and everyone working to get into the middle class out of a college education. We're going to have to do things differently.
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ROMANS: Steve, you don't often agree with this president, but sometimes you do. Do you agree with him on college affordability?
STEVEN MOORE, EDITORIAL WRITER, "WALL STREET JOURNAL": I certainly agree that college costs way, way too much, Christine. I have two kids in college, so it is killing me financially.
But I think the solution is not to keep throwing more and more federal dollars at these universities. I think the universities are the biggest scam going in America. There is no reason a college education should cost $30,000, $40,000, $50,000 a year.
And by the way, I think there is good news on this score. I think you're going to see more and more people moving toward online education, cutting these costs of colleges, because it circles back to what you were just talking about, Christine. If people's salaries and wages are falling, how in the world can they afford to send kids to school when it's taking up more than half of their income?
ROMANS: The one thing is, $26,000 in student debt, you can afford to pay that back if there's a job on the other end. But if we are part- time America, that investment that we are encouraging kids to take just doesn't make any sense.
MOORE: You know what is the saddest part of the story you were talking about the part-time nation, and there's no doubt statistics document that. What's really discouraging is when you talk to those burger flippers and the people behind the counter at McDonald's or Forever 21 or retail stores, it's amazing, Christine, how many of them do have a college degree. That's the real tragedy here. Even people graduating from college can't find that, you know, job that's going to lift them up into the middle class.
VAN SUSTEREN: And we know that the average age of a fast food worker is like 29, so these people with college debt want to move forward and they're stuck in these jobs. Dan, I want to bring in advertising legend Alex Batsky (ph) out with this video urging every one of us to buy American.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: If each of us spends just five percent more on things made in America, economists say we will create a minimum of a million new jobs for Americans.
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ROMANS: Is that what we need to do? Is America's desire to chase cheap one of the reasons we only have jobs selling things, we're not making stuff. Is that part of the problem?
GROSS: Actually, this trend is actually happening. If you look at our trade deficits, which is the difference between what we import and what we export is down 15, 20 percent over the last couple years. A lot of it has to do with now produce a lot of energy, oil, natural gas, our own electricity, we're using a lot less imported fossil fuels. And North Dakota, which is an energy state, has an employment rate of three percent. We are eating a lot more of what we grow, energy increasingly comes from here.
And then you're seeing at the margins, Wal-Mart and GE talking about how Wal-Mart was buying more light bulbs and GE is making them at home. At the margins, some of those jobs are starting to come back. But yes, if we made a conscious effort to consume more American stuff, obviously we would put more people to work.
ROMANS: Dan, Steven, thank you so much guys. Have a great weekend.
Up next, more about making college more affordable. President Obama wants students to get a better return on their college investment. We're going to take a really closer look at why costs are climbing and whether this president's plan can stop that relentless rise.
ROMANS: College is the gateway to the middle class, but that gateway is becoming much narrower. We already know that there is higher employment, they have lower unemployment. But students are leaving college with more than just this. Two-thirds of students graduated with debt, an average amount of more $26,000, and all that debt adds up.
(BEGIN VIDEO CLIP)
OBAMA: Our economy can't afford the trillion dollars in outstanding student loan debt, much of which may not get repaid because students don't have the capacity to pay it.
ROMANS: So why are American students being driven into debt? Rising prices. Over the past 10 years the cost to attend a four-year public college is up a whopping 104 percent. That's in response to cuts from the state and local government. It's putting more of the burden on students. The sticker price for a four-year private college, up a more modest 60 percent.
It's true, colleges are offering more financial aid to offset rising tuition. More than 20 percent of students get some sort of financial aid from their school an average of $6,400 per student. That's on top of student loans and federal grants. But that aid is putting a strain on school budgets, forcing tuition prices higher.
The average sticker price today for four years of tuition at a public college is $38,000. That's a bargain compared to $127,000 for a private college. But for a child born today, it could be three times that -- $108,000 for public school, more than $360,000 for private college, unbelievable. So as states, colleges, and families struggle to pay the bills, President Obama wants the federal government to help. After speaking to students at the University of Buffalo, President Obama sat down with our very own Chris Cuomo and outlined his college plan.
(BEGIN VIDEO CLIP)
OBAMA: We want to create a new system of ratings for colleges so that parents and students know what schools graduate kids on time, are a good value for the money, lead to good jobs, because right now the rating systems -- the commercial rating systems tend to just focus on what's the most selective school or the most expensive school or has the nicest sports facilities.
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ROMANS: Return on investment. Rick Newman is a columnist for Yahoo! Finance. Rick, could this ratings system, could it work? Could it help students and their families make better choices about how much money they're borrowing for which school and what they'll get out of it? RICK NEWMAN, COLUMNIST, YAHOO! FINANCE: I think it could. What I think is encouraging about this is we hear all these plans out of Washington. Almost all of them go nowhere because they require Democrats and Republicans in Congress to agree and actually pass something.
Part of what Obama is talking about does not require any Congressional action of all. This would be the department of education, which is already collecting this kind of data from colleges, basically putting this into a format that allows you to compare schools. What it will do is it will make consumers better shoppers for college. So you will have more tools that will help you figure out, where do you get the best return on your investment?
And you said that before, I think that's exactly the way people need to be thinking about college education. It's an investment. Would you invest your retirement savings in something if you had no idea what the return was? You wouldn't.
ROMANS: I think a lot of families don't think about it early enough. It's about four years we showed you the numbers, so for four years in a row, essentially you would buy a new car. You would go insane if you had to buy a new car four years in a row. There are also kids buying Mercedes when really they can only afford to get a used car.
NEWMAN: Here's the reason people do that. They think if I go to more of a name brand school that might cost two or three times as much as a state school, that might benefit me in the job market in the future. But does it really? We actually don't know whether going to a name brand school that sounds good actually helps you get a job and earn more money. So this kind of information will help people -- it's not going to give you every answer you want, but it's going to make you think more clearly and thoughtfully about how to spend this huge bucket of money.
ROMANS: I think you have to go to college with 18 club credits under your belt. You've got to make sure when you're entering college you're not going to spend $15,000 getting caught up on math and reading. That's unbelievable. And 25 percent of kids are ready in all the subjects when they go to college. It means you're spending borrowed money to do what we should have done in high school. I just feel like there's this mediocrity that's accepted. It's just not going to fly anymore. It just isn't.
NEWMAN: And one good thing about all this attention that the rising cost of college has produced is there are new ways to get through college without so much debt, perhaps without even any debt. Some schools are starting to offer three-year degrees, for instance.
ROMANS: I love those.
NEWMAN: So you go to school in the summer. If you think about it, why do college students take off the summer, anyway, to relax at the beach or get a job as a lifeguard? Is that necessary? No, it's not, really. There are ways to use new online tools to take some of your courses that way. Another thing people can do, go to community colleges to get those basic credits, make sure they can transfer into another school, and then do your last two years and get that degree from the name brand school. There are a lot of strategies for --
ROMANS: Or you can take those community college credits while you're still in high school in order to get you ready. Be very careful about the college credits, they do transfer where you want to go because sometimes kids get stuck on that. There are a lot of options, but it means being 17 years old and being more strategic and a financial manager, and we all know they're not.
NEWMAN: Teenagers are not the most financially literate people. So what does that mean? Someone else has to get involved, which is parents. Parents need to apply all the financial smarts they have. Everyone talks about your house is your biggest investment and your car is your second biggest. I'm not sure that's true. Your kids' education may be an even bigger investment than your house when you consider what's at stake. Treat it that way.
ROMANS: People who are crying about $26,000 an average of student debt, you can pay that back. That is actually an amount of money you can pay back. It's these kids that have $60,000, $70,000, and $80,000 that I worry about so much. Rick, so nice to see you again.
Last year Americans spent $15 billion on video games. Halfway around the world, Koreans spent $17 billion on private tutors for their kids. What we need to change to keep our place in the global economy. That's after the break.
ROMANS: The smartest kids in the world are not here in America. The U.S. spends more on education than almost every other developed country. What do we get for our money? U.S. high school students rank 31st in math and 23rd in science versus other developed countries. This is according to the highly regarded Pisa rankings. Our education system has barely made any progress in the last half century. Education levels can drastically change for better or worse, nations like Finland, South Korea, and Canada have made huge gains in international test scores while nations like Norway has more recently fallen.
Amanda Ripley is the author of the incredible book, "The Smartest Kids in the World and How they got that Way." She's also a time contributor. Amanda, this book I think is required reading for anyone who cares about the education debate in the world, especially this country. You've been around the world. You looked at top-performing countries. You collected data on all this, which is so important, because so much what happens in education are opinions and feelings and not data. You also enlisted the help of some field agents. You got American high-schoolers studying abroad in South Korea, Finland, and Poland. They noticed a certain attitude in those schools. Listen.
(BEGIN VIDEO CLIP) TOM, AMERICAN STUDENT IN POLAND: On the first day of school everybody was wearing black suits, black ties, and it was very formal. You could tell people took their education a lot more seriously here.
KIM, AMERICAN STUDENT IN FINLAND: The students here care here. They understand it's important to perceive the reaction of what they do now will affect them. It's more real to them.
(END VIDEO CLIP)
ROMANS: We are number 31 in math, 23rd in science. We only get 2,300 days in school to prepare our kids for a lifetime. What do we need to do differently?
AMANDA RIPLEY, AUTHOR, "THE SMARTEST KIDS IN THE WORLD": You know, one of the most exciting things about this is that the smartest countries in the world were not always so smart, so change is possible. It sometimes feels like it's impossible, but one thing that all of these countries did was they made school harder. It sounds really simple, but in every conceivable way they made it much harder to become a teacher. They made the material more challenging, and the testing and the homework and everything was just of a more rigorous, higher quality. So it was quality over quantity.
ROMANS: And the information you got from these embedded students is just amazing. Another one you shadowed, a kid named Eric, he went from an affluent Minneapolis suburb to South Korea. That country spends $14 billion on afterschool tutoring. They actually have raids conducted to make sure children obey the 10:00 studying curfew because kids are so restive and so motivated. Listen.
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ERIC, AMERICAN STUDENT IN SOUTH KOREA: I really like how Koreans teach math because it's so much more integrative than the American system. They were learning advanced concepts of calculus and they were learning algebraic concepts and geometry and trigonometry.
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ROMANS: Interestingly, the stress eventually got to Eric and he transferred out. How do you strike that balance between what you call a hamster wheel and the moon-bound schools?
RIPLEY: Right now the United States is definitely in the moon-bound category in most places. So when we think our kids are under pressure in these high-stakes tests, they're not anything close to what much of Asia is dealing with. That is a pressure cooker, which is the other extreme. A much healthier model is a place like Finland where when the kids are in school, they're doing pretty high-quality, challenging work, and they've got incredibly well-educated teachers who getting into teacher training college is the same as getting into MIT in the United States. So you have that quality again over quantity.
ROMANS: And 10 percent of people who want to be teachers actually can be teachers. It's a very respected profession. Is that part of it, too, that you've got really dynamic teachers and not everyone can do it?
RIPLEY: Right, and this was something I knew would be important, but I was surprised at the ways it affects kids themselves. So obviously when you have very highly educated people becoming teachers, that is great because they know their subjects and they have a fluency for teaching. But the kids actually pick up on this, and that's what really exciting. If you send the signal to kids about how serious you are about education, when you make it that competitive to become a teacher to begin with.
A recent study in this country found that 18 percent of teacher preparation programs taught all the most widely accepted practices here. Are we in this country failing to teach our teachers properly?
RIPLEY: This has been a longstanding challenge in this country and also many countries around the world where we give lip service to say that education is important but we're not very rigorous in the way we train teachers in most places. So most education colleges admit that almost anyone who is interested in studying education, and we end up educating twice as many teachers as we need as a result.
VAN SUSTEREN: Why don't we care more about it? We talk about it, we care about it. There are a lot of opinions about education reform. But you say something in the book that's so interesting that wealth has replaced -- we don't need rig or in education because we have wealth. We've always been a wealthy country. And that's starting to change, and the patterns of wealth are starting to change, and it makes education that much more important.
RIPLEY: I think that's right. Historically, we haven't been able to produce millions of students who can think critically in math, reading, and science. We didn't need to do that. But now we're getting to a place where those skills are becoming more valuable than gold, and we really do know now that those international test scores you cited, there is nearly a one-to-one match between long term gdp growth and increases in those scores.
ROMANS: Really interesting book, "The Smartest Kids in the World." Amanda Ripley is the author. It's so nice to meet you and I think it's so well done. I love the kids who were your super spies in there to help you navigate through it. Thank you so much. Nice to meet you.
RIPLEY: Thank you.
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