The 91st Reason Not to Go to Graduate School is actually a call for the lower-profile institutions to lift their game.
As a general rule, when you complete a PhD, you can only expect to be hired by institutions that are less prestigious than the university at which you earned your doctorate. That is why the prestige of your graduate program is so important.
Presumably, a few graduates can be hired into a comparable institution, and on rare occasion, a genuinely promising graduate can go up.  And affiliation with a less-favored institution might affect one's chances at getting research published.  Other aspects of the job, however, are within the faculty's control.
However, it's just as likely that your new institution (where you may spend the rest of your career) will have lower standards, a greater number of ill-prepared students, fewer resources, and less name recognition than the university at which you completed your graduate work.
Admission and grading standards are within the purview of the faculty. To acquiesce in lowering standards because the institution isn't Princeton or Wisconsin deprives the students enrolled there of the challenges they deserve, and saps the morale of the faculty.

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