Monday, February 18, 2008

Gloomy Stats About College and Jobs

I was raised knowing I would go to college, and I did. My parents and I split the cost of it, and I worked throughout my college years to pay for my half. I graduated with no debt.

My dh was also told he would be going to college, and he paid for most of it himself, working summers and coming out of school owing a whopping $1000 or so, which we paid off in a couple of years at $30 a month.

Today, more kids are going to college than ever, but the price of a college education has risen so dramatically that it’s pretty much impossible for someone to work their way through school as we did. As a result, many kids are coming out of school owing tens of thousands of dollars in college loans, plus several thousand more in credit card debt.

If they were making big bucks once they graduated, this would be a problem with a short shelf-life. But wages are stagnating*, and we now have more college graduates than we need for the number of jobs available in this country that require a college degree.

Paul Barton writes about this in the current issue of Change Magazine:

The absolute demand for college graduates is also overstated when whatever percentage of the workforce that has gone to college is equated with the percentage of jobs that require college-level learning—or when the assumption is made that the knowledge gained in college is required to perform that job. For example, Senator Edward Kennedy (D-Mass.), in a committee hearing in March 2007, said that when he graduated from school, just 15 percent of jobs needed some postsecondary training, but "today the number is over 60 percent and rising rapidly." But while over 60 percent of people in existing jobs have "some college" or a postsecondary credential, according to the BLS only about 3 in 10 jobs require a postsecondary certification of some sort.

Yikes! The BLS, of course, is the Bureau of Labor Statistics, the primary source of employment statistics in this country.

Pretty depressing stats, but let’s try being more optimistic: Is there a possibility that there will be more jobs in the future that require a college degree? Sorry, not according to the BLS. Barton includes BLS charts forecasting employment growth in his article, noting that

The jobs that require postsecondary education credentials total 29 percent for 2004 and will rise to 31 percent by 2014.

BTW, the term “postsecondary education” refers not only to four-year and Master’s degrees, but also to two-year degrees and even one-year certificates. So that seems to indicate that the lion’s share of jobs in the future will not require a four-year college degree.

Does this mean your child should not go to college? That depends on the child. Young people who excel in science and want to be neurosurgeons should definitely be encouraged to go to college. But those who don’t know what they want to do, who don’t want to go to college but are feeling pressured by society, or who want to major in a field that doesn’t pay much more than a job at Starbucks might want to head off in a non-college direction, unless you have a money tree in your backyard.

And all young people, whether they go to college or not, should be given a good education in personal finance, because with stagnating wages and rising food and gas prices**, the young people who know how to stretch a dollar will be the best prepared of all.

* the most recent government figures show a 0.1% increase in inflation-adjusted earnings from Nov. 2007 to Jan. 2007. That trend has not varied much over the past ten years.

** current annual inflation rate is over 4% as seen here.


Amy said...

I was never expected to go to college. In fact, my dad didn't think girls needed an education beyond high school! I was the first of my cousins (about 70 of us) who graduated college. I worked my way through - no debt!

The cost of a university education today is exorbitant - we have put 3 children through and only 1 works in her what she majored in...and she doesn't like it. It has often made me wonder if the money wouldn't have been better invested in the special needs trust for our youngest. They won't recoup the investment made in their education - no how, no way!

Barb the Evil Genius said...

My eldest wants to be a veterinarian and my youngest wants to dance professionally and teach dance. Both of these would involve college. We'll see what happens as they get older, but for right now I'm preparing them for college, and we're trying to save as we can.

Barbara Frank said...

Amy, thanks for sharing's got to be hard to see that happening to them.

Barb the EG, I've read that vets are in big demand, so your son will probably find it worthwhile. As for your daughter, you'll probably know just how to go about getting scholarships, etc. after walking through it with your son. Good luck!

Susan said...

What does it mean for a job to "require" some college education? "Require" could mean that the training received in college is necessary to doing the job. But sometimes the requirement for college is just a "sorting" requirement, in that it's a way to weed out the so-called drop-outs (like your daughter and mine). In other words, you might not need anything that college gives you, but that doesn't stop the employer from requiring that you have the degree.

I remember reading something (maybe Bear on alternative degrees?) about a college that decided all dept heads needed a masters degree. So the guy who'd been a janitor at the college for the last 30-40 years, and who'd worked his way up to being the head custodian and grounds-keeper, was forced to either give up his job or earn a bachelors and masters. In a situation like that, is the college education "required" for a job? As to REALITY, no, the degree certainly wasn't a requirement for the man to do his job. But the hoop-handlers were sure gonna make people do some hoop-jumping!

Melissa Markham said...

This is an excellent post! I graduated from William and Mary back in 1988. Back then education there cost about 5,000. I left owing 10,000 in student loans which my parents were paying. I was an only child and the first to attend college on my father's side of the family. The highest salary I ever made was 22,000 and that was after working for a community services board for 6 years. My mom never had a college education and made more money than I did as an administrative assistant. I went to school with a guy who had a masters in biology, and worked at Captain George's seafood restaurant because the money was so much better there than anything else he could get!

A couple of years ago, I attended a business seminar, and the place where the money is going to be is in manufacturing. Because the population that has been running the factories is growing older and retiring. Americans tend to look down their noses on this type of work (which is not the same type of work it used to be with all the technoolgoy). But if your child wants to consider a lucrative income, they should definitely look into manufacturing. Other great options are mechanics and plumbers. It used to be cars and such were simpler and people did these things for themselves. Now because things are complicated and lives are fuller, we hire people to do this work for us. Our plumber gets 100.00 just for showing up at our door!

It is a shame because there is a lot to be said just for the experience of college, but the experience is definitely not worth the cost unless you do intend to go on to something like be a doctor or lawyer. and my personal advice on that would be to do some research, because those fields may or may not be overcrowded.

Barbara Frank said...

Susan, I'm not sure what you mean by drop-outs (dd refused to even apply to a college), but I agree with your second definition, sorting. Case in point: I know someone who was told to hire only college grads to man her inflatable party rides business, the logic being if you can get college grads for $7.50 an hour, why hire high school grads at all?

Melissa, I totally agree with you re: college, and your story is becoming more common all the time. I hope you're right about mfg. though; my husband's industry has all moved to China, and I worry about what we're going to have left if that keeps up.

Thanks for stopping by, everyone!

Susan said...

Barbara, my daughter didn't apply to college either. What I meant by "drop outs" is the way so many people now consider a bachelors degree to be the minimum necessary. It's like anybody who didn't finish four years of college is a person who "quit" before finishing the minimum. Thus a drop-out.

And I think that stinks. I think college has its place, but I think it's being used to cover too many bases, and is being required when it's not necessary. If a person goes to college because he can afford the luxury of being immersed in study, then that's really nice. Or if a person goes to college because it provides necessary training, that too is great. But the whole concept that it's necessary .... yuck. I hope that blog posts like yours help people to realize that the world is changing and that college doesn't provide the automatic benefit that it used to.

Barbara Frank said...

Susan, now I understand what you mean by drop-out.

I do think that if the cost of tuition and room and board continues to far outpace inflation, other alternatives will arise to meet the needs of those who can't afford college, especially now that home prices are dropping and people can't easily borrow against their homes to pay for their kids' college.

Tom Hudson said...

As a former college prof, I agree that many jobs don't actually require what you're supposed to learn in college. However, many of our students showed up not knowing what they were supposed to have learned in high school.

Barbara Frank said...

Tom, I believe you...I'm amazed at the number of remedial classes offered in college now. Why kids are coming out of high school poorly educated is a whole 'nother topic...