Supply Does Not Create Demand

I have written many times about the massive oversupply of chemical engineering graduates. As the graphic below shows, making lots more chemical engineering graduates does not make lots more chemical engineers. This is sort of obvious to anyone outside academia. Chemical engineering jobs are created by demand for chemical engineering. Making more graduates just makes the qualification less valuable.

Worldwide, in all disciplines, somehow academia has persuaded politicians that making more graduates will make more graduate positions. All it has made is a generation of underemployed, overeducated, pissed off graduates. They have jobs, as employment is high, but they are not graduate jobs, and they don’t pay enough to buy the middle-class dream.

What we have produced as a society is an oversupply of people who thought they had bought a ticket to society’s elite. That so many of them have mickey mouse degrees may well be less significant than the fact that they can’t get a mortgage, and are going to spend decades with debt they can’t pay off. If they could get the kind of job which a degree used to get you before the oversupply started, their student radicalism would wear right off. I know mine did.

There is nothing new going on here. Peter Turchin and others have identified historical instances of elite oversupply as the cause of instability in the Roman Empire, and religious civil war in France. He predicted more than a decade ago it would lead to the culture war in the US which is driving ours here.

I recognise some of the ideas which the media tell us are commonplace in millennials from my time in 1980’s left-wing student politics, but some of the ideas which are now mainstream in millennials would have been considered pretty extreme even in those circles.

Many millennials feel they have been denied what they deserve, but they have been sold a lie. Half of society cannot ever constitute an elite, but half of society can think itself to have earned elite status which it has been denied.

Such people will be envious of those which have the privileges which they think are rightfully theirs. They will suspect that “gatekeepers” within the elite are responsible for the lack of well-paid jobs which they rightly deserve. I recently saw an obnoxious discussion amongst millennials about me on the internet in which I was described as a gatekeeper of the engineering profession.

This was in the context of my pointing out that chemical engineering graduates are not chemical engineers yet, and most never will be. I’m not in charge of any gate to the profession, but in any case, the gate is open. It’s just that the space on the other side of the gate cannot accommodate the flood of graduates being produced.

If we continue producing useless, underemployed, disaffected graduates, society will continue to fracture, and it’s not as though it’s free to produce them. In the UK, higher education is nominally no longer grant funded as it was when I went to university.

Students have to take out loans, but if you don’t earn a graduate wage you’ll never pay it back. The state will. We are paying enormous amounts of money to universities to give half of our young people qualifications which are at best worthless for most of them. Universities are the only beneficiaries here.

We all know that we need more plumbers, electricians, and nurses way more than we need more resentful Deliveroo riders with PhDs. Who is going to have the nerve to cut state funding of university places back to something like the demand for graduates, and spend the money saved on training more of what we need? But of course, apprenticeships are a great idea. For other people’s children.

Read Sean's follow up to this “Supply Does Not Create Demand II‘