Wednesday, June 29, 2011

Your Degree: Is it All About the Money?*

On May 24, 2011, Georgetown University Center on Education and Workforce released What's It Worth? The Economic Value of College Majors? and, using census data, tried to show how a degree = X amount of dollars. The big winner, petroleum engineering; the big loser, counselling psychology. (Sorry librarians, there wasn't enough in the sample to make any conclusions about library science degree graduates.)

Several different news media have picked up the report and tried to shame the degrees that offered the lowest salaries and crow with joy over their confirmation of their suspicions that engineers make more money. Fast Company could not resist making the dig that even if Steve Jobs thinks the humanities are worth studying, Apple doesn't hire philosophers to make iPhones--but the author should have pointed out that Apple doesn't hire Americans to make iPhones either. Some of the media have acknowledged that the point of the study was to show that college was still worthwhile when considering a lifetime of earnings. Other writers have urged parents to keep their little lambs close and put them firmly in the engineering paddock in college.

Here are some other issues that some journalists and bloggers did not consider when smacking their self-satisfied lips over the study:
  • The study looked at all salaries, not just for recent graduates. It should not be a surprise that an entry-level worker will make less than an experienced worker. Throwing out the number $120,000 for a petroleum engineering grad does not consider that most engineers will still have to spend a period as an engineer in training, not an engineer, and that they are certainly not receiving $100,000 during this period. It can also take up to five years to start breaking the $70,000 mark. In addition, the actual median for engineering as a whole was $75,000. Fixating on $120,000, a salary that possibly includes ten or more years experience, a graduate degree and extended travel to some of the politically hottest places in the world, is not giving recent grads, or their parents, a very realistic idea about their salary.
  • According to the study, the average for the humanities and liberal arts group is $47,000. Though this is not as high as the engineering group, it is still a healthy enough income to buy a house and raise a family. In addition, according to the study, the people who completed a graduate degree in this field boosted their incomes by 48%. And that is close to the average engineering group salary. Though it is true that the humanities and liberal arts grad will have to pay for his graduate degree, unlike the engineer who gets paid for her apprenticeship, you could consider the graduate degree an equivalent to the engineer in training period.
  • Some of the lowest paying degrees indicate that a bachelor's degree is not the minimum requirement to enter professional practice. For example, most counsellors and psychologists have to have a graduate degree to practice their trade. When counselling psychology majors completed a graduate degree, earners in this field received a 63% earnings boost. You should also consider that 19% of the salary reporters with this degree only worked part-time, which can significantly affect salary.
I would also like you to consider that flooding specific majors with people who are only into the career for the cash means that our bridges, roads and heart valves are going to be made by people who have no genius and possibly little interest in creating, making and building. I suddenly feel so much safer knowing that I have to walk across a bridge built by a mercenary.

And though we could use more engineers and scientists--since finance won't make the pay grade either since the business group average only makes $60,000--flooding these programs with more graduates will equal greater supply and, potentially, lower salaries. (Especially if we are paying those scientists and engineers in rupees and renminbi--but we won't get into that.)

And petroleum engineering? Ever heard of peak oil, the green economy--even the word "unsustainable"? Try "non-renewable". Yes, I know the well has not dried up yet, but I would really rather have some engineers and scientists making solar panels, reduced emission cars and biodegradeable replacements for plastic. Our civilization is a lot about the crude but maybe it should be more about unplugging the hose and reducing the suffering it causes.

Finally, I would like to address the parents that are reading most of these misleading articles and urge you to consider the following issues:
  • There is more to salary than getting one: you have to spend it wisely. If your child has already demonstrated a tendency to accumulate excessive credit card debt and has put in no money to the college fund that you have been hoarding, I think you have bigger fish to fry, since a larger salary may only set them up for a bigger load of debt. Consider: $47,000 with good spending habits and $10,000 in savings, versus $75,000 with $25,000 in consumer debt, 0 savings and a bankruptcy? Maybe you should be taking them to a financial planner, in addition to an admissions counsellor.
  • What if they flunk? I'm sure your child is brilliant and can take on any academic challenge--and I'm sure they are smart enough to self-sabotage. Let's calculate the cost of not finishing a despised  degree program, financed by a student loan.
  • I hope your children show as much compassion and concern for your needs, as you demonstrated by coercively selecting their program of study, when your sweet little lambs have to pick the facility that will house you through your final days, months, years. Thanks to the education that you paid for, it is possible that they could afford the best--but will they pay it? Maybe living in your kids' basement will be a viable option?
It is more important to consider what you do with the money you have, as opposed to how much money you get. However, this was not the purpose of the study--except to say that taking the money you have and completing a college degree is a much better investment than no college. I think the true purpose of the study was to get people to complete a college degree, because people with a college degree, should they satisfy the legal and professional conditions of their occupation, would make more than the 66% of US wage earners who make less or equal to $39,000 per year.

On a final note, thanks to the Globe and Mail for their absolutely idiotic article How will your kid's university choice affect their salary? (refers to the UK White Paper that matches degrees with salary) which also did not consider that the Canadian and UK labor markets are different and that the current UK economy will also have an enormous impact on salary and job prospects for new graduates. You guys deserve a kick in the seat of the pants.

* I really wanted to call this article, Why Can't Journalists Count?, or Please Stop Writing Hysterically Dumb Blog Editorials about Humanities Majors, but I do know some journalists and bloggers who are excellent at covering the economy. Please guys, start writing more thoughtful analysis for prospective and current university students.

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