HIGHER EDUCATION BUBBLE UPDATE: Jobs data cannot prove that college is a “good investment.”

Simply being employed in some job doesn’t mean that a college graduate is receiving any added compensation—any “return” on his degree. Many graduates are working in jobs where their education is mostly if not entirely irrelevant. For example, roughly half of the people driving for Uber are college graduates, but they aren’t paid any more on account of their educational credentials.

All that the favorable job statistics for college graduates tell us is that having a degree positions you better in the job market compared with people who do not have those credentials. Many employers who need workers for jobs that require only basic abilities and a decent attitude now screen out people who don’t have college degrees. Companies looking to hire for positions such as sales supervisor and rental car agent, for instance, often state that they’ll only consider applicants who’ve graduated from college. What they studied or how well they did is largely beside the point.

The college degree has become so ubiquitous that many companies know they can fill their needs without interviewing applicants who are presumably less capable and somewhat harder to train just because they haven’t been through the college mill. Consequently, people without degrees are increasingly confined to the shrinking, low-pay sectors of the labor market—unless they can succeed in one of the remaining fields where ability counts for everything, such as entrepreneurship, sports, and entertainment.

Pointing to the better employment prospects for people who have a college degree is irrelevant to the cost-versus-benefit debate. . . .

The individual who studies, say, chemical engineering and thereby acquires the essential background for a career in that field probably gets a splendid return on the time and money spent on college. But on the other hand, the individual who leaves high school with weak skills and scant interest in academic work, enrolls in school with low standards (perhaps a “party school”), chooses an easy major and breezes along to a degree four or five years later is likely to end up working in a low-skill job that an intelligent high schooler could do. That person, even though employed, is getting a negligible return—possibly even negative—on his college investment.

Higher-ed folks pushing college nowadays sound more and more like real estate people saying that there’s never been a better time to buy a house.