Jarrett Dieterle, Neetu Arnold, and Rafael Mangual discuss surprising parallels between the soaring costs of higher education and the price of food delivery. What’s driving these increases—and who’s really paying for them? They examine how government regulations, subsidies, and market dynamics shape affordability in both sectors. Their conversation challenges conventional thinking about cost, value, and opportunity in today’s economy.

Audio Transcript

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Rafael Mangual: Hello and welcome to another virtual episode of the City Journal Podcast. My name is Rafael Mangual. I am your host and I am joined today by two of my brilliant Manhattan Institute colleagues, Neetu Arnold, who’s a Paulson policy analyst here at the Manhattan Institute focusing on education and Jarrett Dieterle, a legal policy fellow here at the Manhattan Institute who does kind of a little bit of everything, Jarrett. I feel like you’re sort of a bit of a Renaissance man on the legal team contributing to amicus briefs, doing regulatory notes, but also just contributing to our anti-regulation agenda here. So the reason we’ve got you both on, as you know, we’ve been doing a couple of episodes on City Journal’s affordability agenda package, and I thought you guys had some really interesting pieces that I wanted to talk about. And so that’s what we’re going to talk about today.

So Neetu, I want to start with you because your piece hits on something that has become a big chunk of a lot of individuals’ budgets, particularly in large American cities, and that is student loan payments. And the more people I have met in the professional classes, it seems like all of them have that one thing in common, which is that massive monthly bill in excess of $1,000 where they are paying off their college debt. And it just seems like, well, hey, if affordability’s an issue, maybe not everyone actually needs to go down this route. And I thought your piece made an excellent argument. So why don’t you take us through it a little bit?

Neetu Arnold: Thank you. I mean, for a lot of people, higher education is the first time that they really run into affordability issues, whether they take on student loan debt or they don’t, they just see the high price tag. And I think you bring up a good point that this is an important issue to talk about because I think oftentimes it’s easy to look at other issues, healthcare, groceries, and those are all important, but higher education is something that is affecting a lot of younger people. And I think it’s very easy for them to feel like their interests are not being paid attention to. And so that’s what my piece does. I argue that addressing affordability on higher education is both a policy issue, but also messaging. I think something that a lot of younger people hear, they’ll talk about how expensive college has become. And that’s not just something that they’re observing. I mean, we see it in the data. Tuition has outpaced revenue or has outpaced inflation. When you look at the average cost of college, it has more than doubled since 1985, and that’s inflation adjusted. So this is not just something that young people are imagining.

Rafael Mangual: And it’s not like college has gotten twice as better, right? I mean…

Neetu Arnold: No, no, it’s the same. It’s pretty much the same. And so it’s not just something that young people are imagining. College has gotten more expensive, but oftentimes when they’re talking about these issues, they might hear from older people who went during a time when it was much cheaper, that they should just not spend so much money on their $20 avocado toasts. And I think for a lot of younger people, they feel like their concerns are being dismissed. And this is a distinction that I make in the piece that when it comes to student debt, that is an individual’s responsibility. If somebody is saying, “I have so much student debt to pay off and I don’t know where to start, I need to streamline some part of my spending,” maybe telling someone they shouldn’t spend $20 on avocado toast might make sense. But when we’re talking about the actual increase in price of college, someone not eating avocado toast is not going to solve that problem.

Rafael Mangual: Yeah, no, a hundred percent. Although avocados seems like a very good segue into what Jarrett’s piece touches on, which is another part of this affordability crisis that seems to be hitting young people in particular. There was a recent New York Times piece that was profiling the expenses of people who by all accounts are in the upper echelons of the socioeconomic totem pole, and yet a big chunk of their regular monthly spending is actually going to food delivery costs. So these are Uber Eats, grocery deliveries like Instacart and these kinds of services. More and more young people, more and more young people that I know, especially since the pandemic, seem to have gotten accustomed to this idea that they don’t have to cook their own meals, they don’t have to prepare their own food, that they can just have their cravings delivered to them almost in an instant.

And I think Neetu, you hit on something, which is that it’s hard for people to feel sympathy for someone on those grounds. But Jarrett’s piece actually makes, I think, some really good points that these tools, these services which do provide real value for people do not have to be anywhere near as expensive as they’ve become in big American cities, especially like New York. And that seems to be a regulation story. Do I have that right, Jarrett?

Jarrett Dieterle: Yeah, that would be my argument. And I think the data has borne that out. We’ve seen a lot, I guess just to back up, so people were talking about the same thing. People that deliver, whether it’s Uber Eats, DoorDash, any of the brands you’ve heard, they tend to operate as independent contractors with the platforms that they work with. And there’s been an effort really going on close to a decade now, a renewed effort to argue, particularly the push by the progressive left to argue that maybe they should be full-scale employees instead of contractors.

Rafael Mangual: Why does that matter for them? What’s the meaningful distinction there?

Jarrett Dieterle: Well, the argument, again, by the progressives is that by making them full-scale employees, they will then have access to the kind of workplace benefits that employees are accustomed to. So things like health insurance, workers’ comp, different things. And we can unpack that more. But basically short of a full-scale reclassification, there’s also been an effort to apply things like the minimum wage to these workers. Obviously, that’s a little bit tricky since their compensation comes through delivery, but there’s some complex calculations that are used to essentially ensure that they hit an hourly rate often above $20 an hour, at least in big cities, the New Yorks, the Seattles of the world. And as we’ve learned, anyone that’s taken Economics 101 class understands that if you increase the labor costs, that you’re therefore going to have that passed along to consumers and increased cost of food. And that’s exactly what’s happening.

So New York City has kind of been at the vanguard of this movement to apply minimum wage to these contractors. And lo and behold, that has led to a spike in food delivery costs. They saw a 10 percent increase in food delivery costs after their minimum wage effect took effect in 2023. And so we’re seeing it in the food we eat, in our wallets, what is the reality of basic economics, which is when you increase the labor costs, you’re going to increase the output costs and the ultimate cost to the consumers.

Rafael Mangual: Yeah. It seems like one of the sort of recurring themes in progressive policy proposals is that the group that those proposals are intended to benefit end up suffering in some way as a result of those proposals being enacted. And it seems like this is one of those cases because your piece does a really great job of pointing out that, okay, even in the places that have adopted some of these higher minimum wages, for example, the workers haven’t clearly come out on top here. People are tipping less where the food delivery services have become more expensive. Tell us a little bit about that. I mean, do I have that right or is this really a boon for the workers?

Jarrett Dieterle: Yeah, I think that’s a really important point because I think a lot of progressives would argue that, hey, even if the consumers are paying more, we’re helping the workers. And that is a much more complex picture. Again, we’ve learned with the minimum wage that on paper, the people that will keep their jobs in the face of a minimum wage will show higher earnings on paper. But what always happens is people get crowded out of the market, and that’s what happened in New York City. So after they applied their minimum wage to rideshare drivers, there was like a 27,000 person wait list to become a Uber Eats or DoorDash driver in New York City. That was Uber Eats specifically. And so it just shows that people are being locked out and their wage goes to zero in the meantime. And so I think that we lose sight of that.

Also, there’s been direct evidence, and the Census Bureau has a good report on this, that anytime you raise the minimum wage on tipped employees, you’re going to see about a one-to-one decrease in the amount of tips that they’re getting. And so the overall tipped rates in New York City drops like 47 percent after the minimum wage went through. And so whenever they’ve done economic analysis, Seattle passed a version of the minimum wage, they’ve shown no overall increase in driver take home pay as a result of these minimum wages, which is the entire point of why we’re doing it in the first place. And one last thing I’m going to add that I think really often gets missed on this whole thing is that we live in a new normal of no taxes on tips now. And we can debate whether that is a good policy or a bad policy, and I’ve done that before, but that is the reality we live in. And so when you have that substitution effect where you’re decreasing tips and increasing traditional wage, you’re effectively substituting tax-free income for taxed income. And so I think that that’s often missed in this a lot too. And so the result is that people in some circumstances can actually bring home less money even in the face of a minimum wage.

Rafael Mangual: Yeah. No, I mean, that’s a really interesting and complex problem that you articulated, I think, very well in your piece need to. I want to get back to the college cost thing. I’m hearing Jarrett talk and there’s a very clear supply demand issue afoot there. And it seems like that’s kind of the case in the college space too. Look at higher education costs ballooning. I mean, it’s not hard to understand it when you realize that, I mean, compared to 50 years ago, the share of Americans going to college has grown massively. We’ve made it more accessible. We’ve made it more affordable by basically making it impossible not to qualify for a student loan, which of course discouraged any effort on the part of these colleges and universities to control their own costs and keep those costs down. And so the demand has kind of been artificially inflated or boosted, and so there’s no shortage of supply, so just the prices go up and up and up and there’s no real consumer counter to that.

Neetu Arnold: Right. And I think part of the reason is because of the presence of federal subsidies, especially the federal student loan system. There are a lot of explanations out there for why the price of college has increased. Some people will say it’s because state governments aren’t investing enough in colleges and universities. When I looked at 26 public universities in my own research, I found that that story doesn’t hold up for the most part. In fact, when I looked at that data, tuition revenue increased three times that of… Yeah, three times. Yeah. So that of state and disinvestment. So it means that there’s something more going on. And I’m more of the belief that it’s the Bennett hypothesis, which is the idea that the presence of federal subsidies is allowing universities to simply increase the price of college because they know that students, borrowers can simply turn to the federal student loan system. And there’s some evidence for this that I point out in the City Journal piece. A Federal Reserve study from 2017 found that for every dollar received by a college in federal student loans, they increased the price by 60 cents.

Rafael Mangual: Yeah, I mean, that makes perfect sense. I mean, it’s like if you don’t have to make your product affordable to your consumer base, you lose all incentive to do that. There’s no risk of you losing customers because those customers can’t afford it. And that it seems to describe perfectly what’s happening in the college and university space. I think one question a lot of people have though is like, why? Why do this? Why expand subsidies to so many people? And it sounds like the answer has at least in part to do with the fact that we have just adopted this idea that if you don’t go to college in the United States of America, you’re some kind of failure, that this is…

Neetu Arnold: Part of it is that you’re some kind of failure, and part of it is because we have systems set up where if you don’t go to college, you’re simply not going to do well financially. That I think is the crux of the issue. And I think the solution here is that college, we need multiple pathways to success, whether that’s the trades, whether that’s simply finishing high school and then going straight into the workforce. I think something that’s underdiscussed in the issue right now with college affordability is that so many students are going to college when they’re simply not prepared, and that’s going to have some adverse financial outcomes. You’re more likely to drop out of school or you’re going to enter remedial courses, which do not count towards graduation requirements. So you have to pay for those remedial courses, and that’s another barrier to graduation.

Rafael Mangual: There’s a comedian, Nate Bargatze, who I like, and he has this bit about having gone to community college for a year and not having any credits because he was only taking remedial courses, but that’s not free.

Neetu Arnold: It’s a real problem. That’s a real problem. And I think it’s controversial to talk about unprepared students going to college. A lot of universities will try to paint it as you’re just putting these students down, you don’t care about their success. And I don’t see it that way at all. I think they should be getting a good K through 12 education, making sure that they’re getting foundational knowledge in reading and math and history and science. But if they’re simply not meeting the expectations required in college, I don’t think it makes sense to, A, push them into higher education and then B, expect them to pay those costs. And I think that’s where some of the artificial demand for college comes from.

Rafael Mangual: Yeah. I mean, when we’re having this conversation, I’m just listening to my parents growing up and to so many of the people who talk about this issue where they will point to data that seem pretty convincing that say like, “Hey, if you have a college degree, your earning potential is X times higher than that if you don’t have a college degree and your ability to provide for your family or retire securely or cover healthcare emergencies, et cetera.” And they tie this to the college degree. And it makes it seem as though college is a prerequisite to that kind of financial health, but how much of this is a function of the fact that we have created an economy around this that doesn’t value non-college-educated workers enough?

Neetu Arnold: No, I think that’s a great point you bring up. And I would also add that the return on investment of a college degree also depends on what you’re studying, the field of study. Psychology, super saturated. The market’s not looking good there if you’re a psychology graduate. Meanwhile, STEM fields, wide open, we need more people in STEM. So it really depends on what your major is. Also, what your plans are. Do you have a concrete plan? I’ve talked to students, or I should say I’ve talked to people who did not go to college. That was something they knew right from the beginning they did not want to go through. They had a very clear plan of how they were going to achieve what they wanted to achieve, and they did so. I knew someone who worked in prison security. I interviewed him for research that I did. And again, that’s not something that’s meant for everyone. I’m 5’3”. I don’t think I would be great at prison security. I don’t think you’d want me as a prison security guard, but this person I interviewed did, and I think he knew what he wanted, he got it, and he’s doing pretty well for himself. So I think it really depends on, I know in the system we have right now, if you’re going to go down the non-college route, you really have to know what your plans are and how you’re going to achieve those goals.

Rafael Mangual: Yeah, I think that’s right, but I wonder if that’s something that should change. I mean, I know a lot of people who didn’t go to college and some of them went into the trades and they do incredibly well, really well, actually. I mean, I know somebody who just bought a second house who never went to college, just I think he’s an ironworker or something like that. So there’s clearly a path there, but I think something that a lot of people have noticed is that in the workforce, college has become a requirement for a lot of jobs that don’t really require a higher education. You know what I mean? You see college requirements attached to jobs to be an assistant manager at a Foot Locker or something like that. And it’s like, well, maybe there’s something to this idea that we have artificially imposed these requirements and that has propped up this kind of feedback loop where people feel like they need to go and spend this money in order to be successful, but maybe they don’t.

Neetu Arnold: No, I agree with you. I would want to see that system changed. A lot of employers rely on the college degree because they’re no longer allowed to, well, I should say they’re heavily discouraged from having their own employment test. That’s due to Griggs versus Duke Power Company. It was a scope of…

Rafael Mangual: Wait, so tell us about that case. I know what it is, but I think Jarrett does either.

Neetu Arnold: It was a Supreme Court ruling, I believe it was in the 60s or 70s, and it essentially discouraged employers from giving their own employment test because they had racially disparate outcomes. So for a lot of employers, if they don’t want a lawsuit, they simply turned to college degrees as the proxy for skills for knowledge to do the jobs appropriately. Now, I think there’s something to be said that at the time that this ruling came out, we want to make sure that applicants who are applying to jobs are not being discriminated against based on their race. But I think what Griggs did was that it created incentives for employers to simply rely on the college degree almost blindly. And it’s created this system where if you want to do something other than going to college, it’s now just become much harder.

Rafael Mangual: No, I think that makes a lot of sense. I mean, and just thinking that not only does it make it a lot harder for people to afford college, but once they’ve gone to college and spent that money, I think it also makes it a lot harder for them to experience success in the job market because we’ve watered down the value of the credential. I mean, if everyone is getting a college degree, well, then it’s not like the 1970s where a bachelor’s sort of really distinguishes you from the rest of the field. Now everyone and their mother has a bachelor’s degree, and you’ve got to invest even more to differentiate yourself. And so what ends up happening is a lot of these people are graduating with enormous amount of debt and they end up driving for Uber, driving for Lyft, doing Uber Eats or Instacart. And it’s, again, not that there’s anything wrong with that line of work, but it’s certainly not what I think a lot of people had in mind for their postgraduation careers, having achieved that kind of credential. And Jarrett, I mean, I wanted to get your take on this. I mean, is part of this push, this unionization push, this push to increase the wage, just a function of the fact that you have a lot of people who are working in this space who feel entitled to the level of income that they associated with the credentials that they spent a lot of money to get.

Jarrett Dieterle: I think that certainly could be going on, yes. I think that you’re right, people can often have frustration about what their employment path has unfolded. I think the interesting thing to understand about gig work too is that if you really look at ... And actually this is across the board in the American economy, if you look at what workers care about most right now, it’s actually flexibility and autonomy and schedule more even than salary and benefits. And that’s not just a millennial thing necessarily or people that have gone to college thing. You see that actually in surveys of shift and hourly workers too, interestingly. And I think that yes, there may be some of what you just said. I think another component of it also is that a lot of the folks that like to work in gig type roles like to do so because it is the most flexible work. You can log in and work whenever you want. The single parent that is raising two teenagers can log in for a couple hours on the weekend to make some cash in a way that you can’t do with other jobs. And so I think one of the wonderful things about the American economy at its best is that we can have very diversified different versions of employment essentially for people and that the traditional nine-to-five job, go to college and work in an office nine to five isn’t for everyone. And that’s actually a strength that doesn’t necessarily have to be a weakness.

Instead, the left has been kind of trying to one-size our economy into one particular type of thing. And actually when we just hearing this discussion talking about different industries and routes to employment, fascinatingly, the restaurant industry is one of the great examples of an industry and workforce where it’s around 80 percent of the people that work in it have below a bachelor’s or associate’s degree. And so I think you probably find perhaps similar in the case of gig work, and we should want those sectors to be strong, not just because we want cheap food. All of us love cheap food, hurray, but also because we want to actually help the people that are in that for whatever reason it may be, whether it’s temporarily and they’re frustrated and want to get out of it, or if it actually fits their life the best.

Rafael Mangual: Yeah, no, I think that’s exactly right. I mean, I was just in St. Louis for a speaking engagement at Washington University, and the driver who took me to the airport was telling me he’s a master’s, he’s an MBA student, getting an MBA with a specific focus in healthcare administration. He wants to be a hospital administrator. And he says he drives Uber Black and usually only Uber Black. And he can make up to $90 an hour on some days. And he’s like, “So if I work for 10 hours, I can make $900 in a single day, which is great because I can turn this on when I’m not in school, when I don’t have too much work to do, and I can make enough money to pay my rent,” which is not all that expensive outside of St. Louis, and he’s like, “It really has made it complete, this is the thing that has made it possible for me to pay my rent and absorb a lot of the costs associated with getting an MBA.” And yeah, that seems like incredibly attractive to me. And so I want to just make this more concrete though, because it’s like your piece does a great job of talking about these regulations that have made these services more expensive to consume, but I think a lot of people read stuff like that and they think, well, how much more expensive could it be? So talk to us a little bit about the more concrete figures. What does this look like? How does this actually hit the pocketbook of the average American?

Jarrett Dieterle: Yeah, it’s a good question. And I mentioned earlier, New York saw about a 10 percent spike in its food delivery costs after its minimum wage application. There’s more even kind of absurd stories than that, I guess, if you’re looking for the right word of it. Seattle also has pushed a minimum wage. And once that happens, again, that needs to come from somewhere. And a lot of the companies, the gig companies have instituted what they call regulatory response fees. It’s happened in New York as well, where they’re adding another five to $6 basically that is a fee to cover the increased labor costs that they have.

Rafael Mangual: Yeah. I find it incredible. I mean, there are times where I’ll order Uber Eats. The other day I ordered McDonald’s for our family. The kids wanted happy meals. So we got a couple of happy meals. I got a Big Mac, a chicken sandwich. My wife got a double cheeseburger or something like that, some fries, a couple of drinks. And the delivery and service fees and taxes, I think were a third higher than what the total cost of the actual food order was. So the majority of that order was actually coming from the delivery cost, the tip, the service fees. And I found myself thinking like, “Well, why don’t I just drive over and get it myself and save what, 30 bucks or something like that?”

Jarrett Dieterle: Yeah, no, yeah. When Seattle passed their minimum wage, there was these incredible stories of people ordering $26 coffees or $32 sandwiches, and at least 30 percent of that could just be fees and taxes, for example. And so the reality is that people order less when that happens, which again means that the drivers or the deliverers in this case have less opportunity to deliver and drive, which ends up meaning less money in their pockets as well. But yeah, I think it ... And food is something that people notice most intensely in their day-to-day. What impacts them most is a increase in the cost of eggs, whether it’s for grocery or whether it’s restaurant delivery. And I think it’s easy too, we were talking earlier about the caricature of perhaps the millennial city dweller that’s just kind of ordering all their food out. But these also, this minimum wage, New York just extended theirs to grocery delivery as well from the instant carts of the world.

And I’ve been fortunate to only live in the greater New York area for one internship back at Manhattan Institute back in the day, but it’s not easy to live in a city like New York and go to the grocery store and haul all your groceries home. I mean, there are non-entitled, non-rich people that are ordered grocery delivery for their staples, and that comes at a cost when they’re paying an extra five, 10, $15 on top of their grocery order and they do that every single week. And so we have Zohran Mamdani’s been talking about trying to make halal $8 again. He has recognized that food matters. His ways of trying to solve that are the opposite of what I think actually costs.

Rafael Mangual: Halal is still $11 in the city, by the way.

Jarrett Dieterle: Exactly. Yeah, exactly. Yeah.

Rafael Mangual: I have recent experience with this.

Jarrett Dieterle: Yes, yes. No, a hundred percent. But I think that the diagnosis is correct, the prescription is not, but food matters and it impacts people’s pocketbooks directly.

Rafael Mangual: I’m listening to both you and Neetu talk about your pieces. And what’s striking to me is that Jarrett, you are describing an increase in cost and a decrease in affordability of something because demand for it has been sapped by making it more expensive. And yet need to, here you are talking about higher education, which has become way more expensive, but demand for it hasn’t gone down, I think in part because it’s subsidized. It’s like, “Well, if you can’t afford it, we’ll just help you afford it, and now you can afford it.” That seems like a particularly problematic situation where you don’t have the traditional supply demand effects where something becomes more expensive and then definitionally more unaffordable.

Neetu Arnold: Right. And that’s why I think a solution that we should be thinking about, a realistic solution would be adding guardrails to the way student loans are distributed. Yeah, I think we need to remember that for some people, college can be a great investment and it’s an investment even to our society and to our industries. However, at the same time, the way we disperse student loans, we don’t consider whether a student is A, prepared to go to college, whether they’re entering a program where they could reasonably recoup the costs. And I think about this similarly to banks, banks don’t just lend money to people where there’s a high risk that they won’t return the money. And so I think we need guardrails on how loans are distributed. We could consider academic preparation, we could consider the program that they’re entering, but the idea is that since this is taxpayer dollars, the taxpayer should see a return on investment.

Rafael Mangual: All right. Well, that’s an interesting... So there’s two things I want to get at. So one is, so essentially what you’re kind of proposing is instead of a credit score, you have your SAT score.

Neetu Arnold: Because most students don’t necessarily have a credit history. So we’re going to look at things like academic performance.

Rafael Mangual: Right, right. So it’s like, okay, you need a minimum SAT score for us to feel secure enough to…

Neetu Arnold: To get federal student loans. This is not precluding other kinds of loans.

Rafael Mangual: Right. But my understanding, and correct me if I’m wrong, is that the federal government actually sees a positive return. They’re making money on student loans bonds.

Neetu Arnold: No. They’re not. We lost money. We have lost money from giving out student loans. We have lost $200 billion. That is from the government accountability report.

Rafael Mangual: All right. Tell us what those figures look like because I think a lot of people, they see these super high interest rates and think, well, the government’s got to be

Neetu Arnold: Making money. No. We have high interest rates because the loans are not getting paid back, so it’s becoming more risky. So we’ve lost $200 billion by giving out federal student loans. This is from the government accountability report, and it was over a period of 20 years. So yeah, that’s a huge misconception. I believe under the Trump administration, this is the first time that they were able to at least hit even with getting back student loans. So the government’s not making money off of student loans.

Rafael Mangual: Wow. Yeah, I think a lot of people don’t know that. That’s a really important part of this. Okay. So let’s say they start taking into account academic performance. Are there other factors that will predict a positive return on that kind of investment that we should be looking at?

Neetu Arnold: Yeah. I mean, we’re also looking at the programs that they’re entering. One thing I would say is I would want this to be somewhat of a flexible scale because a program that’s a good return on investment today may not be 10 years from now. Maybe it’s super saturated. So I’d want some flexibility there. I think when it comes to academic performance, we could look at SATs, we could look at grades, we could look at state exams. It’s not necessarily about getting a perfect score, but it’s a score where we can expect that students are going to perform well, that they’re going to stay in college. Because I think a big part that we don’t talk about dropout, everyone wants to talk about the financial pressures students face to drop out. And I think that’s somewhat of a convenient narrative. It’s a little bit ... I mean, there may be some truth to that.

I’m not saying that that’s not the case, but when I read coverage of why students are dropping out, it’s often that they find out that they weren’t academically prepared, not as much as they thought. And I think that’s also an important consideration when we’re thinking about dropout, when we’re thinking about whether a student should be going to college in the first place.

Rafael Mangual: Yeah, no, I think that’s really helpful and useful framing. I mean, one thing that I’m curious about too is just the program that someone’s enrolling in. I mean, how much of that really matters outside the STEM fields for job performance? I think about some of the people I know who are very financially successful, they’ve been very successful in their careers. I look at their undergraduate majors and very few of them have a direct path from their undergraduate major to what they’re doing. So it’s like really a lot of employers I talk to who are doing a lot of hiring, I mean, for them, it’s like, as long as I can tell you’re smart, what you actually majored in doesn’t matter all that much to me outside of a handful of fields that usually require an advanced degree anyway. So it’s like…

Neetu Arnold: Well, something I’ve thought about is maybe it’s a bit flexible. So let’s say you have a certain score, you’re performing at a certain level, there might be more flexibility just because there’s this idea that it doesn’t really matter what you major in, there’s confidence that you will just do well. But if you’re in a certain range, there’s going to be more requirements. That could be one way to think about it. I’m quite flexible on maybe how we weight academic performance return on investment in the degree. I wouldn’t say that the return on investment should necessarily be at zero or we don’t consider it at all because there are going to be people who enter programs where just the chances of getting a job there are very low or they enter jobs that are not where they were expecting to be and they’re not even making what they were expecting to make in salaries. But I’m flexible on how we weight it. My big thing is I think we need guardrails. I think we need to be a lot smarter in how we disperse federal student loans.

Rafael Mangual: And is there something that we should be doing even before that stage, just in terms of the culture around the idea of college? I mean, my wife is a high school principal at a school that has two tracks. They have a college preparatory track, but they also have a career track that for kids who maybe don’t want to go to college or for whom college isn’t going to be a great fit, they can learn a trade, they can learn a skillset and they’ll graduate high school with a credential that’s going to allow them to have some value in the job market even at the young age of 18. I’d like to see more high schools doing that, but maybe I’m wrong.

Neetu Arnold: No, I think it’s great to have multiple paths to success even starting as early as in high school. I know the high school I attended, and I grew up in New York State, so we have BOCES and there were multiple tracks. So some students would, this was around 10th grade, they would attend certain classes in the high school and then other classes they would go off location and they could do, they were in the automotive fields.

Rafael Mangual: I also went to high school in New York and we had BOCES and they hosted, I think it was called the A School, the Alternative School. But it was interesting because it’s like that was almost exclusively for kids who just got out of juvie or had criminal record.

Neetu Arnold: No, this was not that kind of program. Some of the students I saw go there, they were great people, but they had interests that didn’t necessarily require college education, hairstylists, aestheticians, working on cars. I think that was great to have and I would like to see more of those types of programs. Something else I talk about in my piece is that I would like, look, there are policies that can change the price of college, but you don’t have to go into debt. You don’t have to wait for government policies to change before you decide to make college affordable. Attend a state school, maybe go to community college first, then go to state school or go to a private school. Look for schools that offer 100 percent financial aid packages. I think those are some ways where you can reduce the cost of attending a good college.

Rafael Mangual: No, I couldn’t agree more. I mean, Jarrett, talk to me a little bit about the sort of solutions. So I think you’ve done an incredible job of identifying the problem. We are overburdening this particular sector of the economy with regulations that have only functioned to increase the cost of the services that we’re trying to consume and actually made it more difficult for people to get and stay employed and to enjoy an increase in wages. As a result of these regulations, I mean, is the solution as simple as just getting rid of the regulations? If so, which one should we prioritize or are there other things that we’re not thinking about?

Jarrett Dieterle: Yeah. Well, it’s interesting. I think that first I would actually start where you all left off. I mean, really this whole conversation we’re having today is about labor markets at the end of the day. Yes, we’ve talked about the cost to consumers of food, but it’s about ultimately creating more dynamic and flexible labor market and recognizing that not everyone wants to be one-sized and go on one track into one career and work a nine-to-five job at one office. And so I think that the more we can have a prioritization on flexibility, the better off that we’re going to be. And Neetu just spoke to that a little bit in the college context. And I think you see that here in the labor market of restaurants as well. And I think that we ... There’s some policies that can help with that too.

And I think that one of the examples we’ve seen, at least in the gig economy context, is that, again, by focusing on what people want, which is flexibility, but also recognizing that there may be a desire to have some more employment benefits in their jobs, is to try to basically create a model that does both things instead of one thing or the other thing. And we’ve seen that, it’s called a portable benefits model, and we don’t need to get into all the details of that right now, but essentially it allows people that work in gig as independent contractors to have a fund that operates a little bit like a SEP IRA, and the gig companies can contribute to it and the workers can contribute to it, and it follows them from gig to gig. So it’s not tied to one job like a full-scale employee’s retirement plan is usually tied to their employer. And that’s really been helpful. They piloted that in states like Pennsylvania, blue states like Maryland, red states like Tennessee and Utah. We’ve seen that everywhere. And it’s been something that has helped create more benefit financial security for workers in these industries, but it still allows them to have the flexibility of logging in and out whenever they want to and still doesn’t try to one-size them into a model that they may not desire. So that’s just one example that there are ideas that are being pursued actively in red and blue states. But unfortunately, we have not been seeing that in the deepest blue, large, progressive cities where they tend to instead try to basically import 20th century labor ideas like be a full scale employee or here’s the minimum wage applying to you instead. And I think that that’s where the real miss is. We live in a 21st century economy, not a 20th century economy. And instead, we’re still trying to shoehorn these kind of outdated models into a modern workforce that is not one size fits all.

Rafael Mangual: I think that all makes sense to me. I mean, I really, like I said, I loved your pieces because they both tackle issues that I think are hitting everybody in big, expensive cities in a really concrete way. And you guys have, I think, an array of policy prescriptions that make a lot of sense, that are low-cost to implement, and that would actually make things better. So I appreciate the work that you guys did for this special breakout of last City Journal issue. I hope you’ll continue to hit those points in your future pieces. But yeah, I mean, like I said, I wish we could talk for another hour, but we’re running up on time. And so I just want to thank you for coming on today. And I hope we can have you both on the show again soon. Jarrett, this was your first time on the show, right?

Jarrett Dieterle: It was, yes. It’s been great to be here.

Rafael Mangual: Here. Let’s make sure it’s not the last. All right. Well, until then, you all have been watching or listening to the City Journal Podcast. Please do not forget to like, comment, subscribe, leave us a note, shoot us an email, tell us what you like, tell us what you don’t like. And please, if you haven’t already, go back, read the last issue of City Journal. There are some incredible pieces in that affordability package, some other really great feature essays on an array of topics. It’s by far the single best magazine in America. So make sure you go check it out. And until next week, you have been listening to the City Journal Podcast.