Friday, July 26, 2019

[NJFAC] Skills, Scams, and Student Debt

            There is corruption and exploitation among local business classes, and although money totals do not come close to what large national companies grab, it's still disgusting. Here is the link to a well-researched investigation by Meredith Kolodner and Sarah Butrymowicz that shows how the owners of Iowa's cosmetology schools rip off their students. The Iowa School of Beauty and others like it provide relatively little instruction, and certainly much less than students pay for.
            The state of Iowa, acting as loyal servants of the beauty schools, requires that students pay for 2,100 hours of school time. Only a third of those hours are classroom hours and those don't seem to provide much quality instruction. For the other 1,385 hours, students are required to work in the schools' salons. They receive no pay when they do work, and they spend a lot of time doing nothing. They could be out learning and earning. But in Iowa they must pay tuition and accumulate the hours. Some states have reduced requirements but 1500 hours is still common.
            When students enter the real labor force, they are likely to earn more than Iowa's minimum wage, which is still the federal insult--$7.25. They may start at $9 or $10 dollars an hour. Eventually they can earn more. The median hourly wage across the country last year was $11.89. That number does not seem to include tips, but even with tips, you'd get only about  $14.00. Let's say you get a pretty full year of 2000 hours of work. You'll gross $28,000.
            Sound good? Well, if your household consists of you and a child, you are not poor if your annual income is anything over $16,910. That's according to another American insult: official poverty lines. In reality, while you may not be officially poor, you won't have what you and your child need and you will have trouble paying down your student loan debt. You may need food stamps and you may have to work a couple of nights a week at Pizza Hut. Not fun. And all you wanted was to make a decent living doing something you like.
            There are solutions. First, reduce required hours. That's tough in Iowa where the schools are very influential. Other states have reduced the requirements. Second, start raising the minimum wage so that it actually lifts the pay of some workers. Third, let public community colleges offer cosmetology certificates. Students will end up with less debt and they can also get a general education. Finally, continue state and federal efforts against the predatory behavior of for-profit schools. Predictably, the Secretary of Education is moving in the opposite direction. She is undoing the gains of the Obama years and encouraging bad behavior by for-profit schools. And here I thought the administration was a big supporter of the working class.
Frank Stricker is a board member of NJFAC/NJFAN.  His book, American Unemployment, Past, Present and Future, will be published next year.

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