Economic Value of a University Education

I was wondering how many of you feel may feel about the economic value of a college education. Common sense does dictate that a college earns more statistically than a non-graduate. However, a friend (who is 30 yrs my senior and is a graduate from the University of Kentucky's graduate school) and I were chatting online and he has told me the future economic returns of college education are starting to dwindle due lack of economic opportunities due to offshoring of American jobs and uncontrolled immigration. He advocates going to work versus going to college as a the "good jobs" are not there like they used to be for young persons. He tells me that why waste the money, go to college, graduate, and wind up working at a job making under $10.00 an hour anyways as this is the future? He does advocate going to college for such fields as medicine, allied healthcare, engineering, and science. Anything outside of those fields is a waste of time and money as a graduate these days will most likely wind up making low wages upon graduation and in the far future. I tend to disagree with this gentlemen. What are your thoughts?

 

Phooey

Fatalism. I was listening to a rep from the union that is losing 30,000 GM workers in the near future. He said that the company is still very much seeking talented and educated people. Generally, however, they are experiencing a worker population that cannot read, write or calculate very well, and they simply do not need many of those folks. History has shown that those who are educated generally do better in the long run than those who are ignorant. I don't think that will change with this generation.

 

I hope your friend is wrong. I heard the same message some thirty years ago and it was wrong then.

I'm betting that many worried about the ecenomic impact of immigration before and right after the turn of the last century.

I remember hearing that robotics and computers were going to make the working class obsolete by the year 2000.

I'm reminded of a young man that I met in Kannapolis NC not too many years ago. He insisted that there were no oppertunities open to him in that town; "there's nothing but textile jobs" -- and now, the mills are gone. I do hope that young man went ahead and got an education -- if not, he suffers the result of moving the mills overseas. If he did get a good education then he probably wasn't working a line at the mill when it closed...

And so, to my observation at least, those who suffer as a result of increased immigration and outsourcing of jobs overseas are not those with a quality education. Those who suffer are those who are reliant on one single possibility for their sustenence -- those relegated to the dredges of workdom.

Those with a quality education are rarely stuck in unskilled labor jobs... IMHO

 

I suspect that education, like lots of other things (such as spending on IT), may not offer a return - but the lack of education may leave one behind. Check out the unemployment rate categorized by level of education. Folks with less than high school (or even high school) have a much higher unemployment rate than those with college degrees - or more.

Regards - Andy

 

If anything it seems to me that education is more "assumed" than ever, so that the person with just a HS diploma suffers when the hiring employer assumes that s/he could not do even an associate's degree. The AA really seems to be becoming the norm even for some service jobs. The hardest thing is that we have largely transitioned from an industrial/manufacturing economy to a retail/service economy, so that career changing is difficult without education, and those without education are indentured into their narrow experience.

I think that colleges could do a much better job of guiding students into getting the most out of their studies. I see a lot of people in community colleges earning exotic AA's for jobs that barely exist, as well as traditional college students earning BA's in the usual liberal arts fields with very little interest or commitment to those fields--the college "major" is almost a technicality of what course combination the student finished first. Education can "pay" only so far as the student is dedicated and goal-focused.

 

At a minimum, I would rather be armed with a Bachelors in business than just a high school diploma. While a degree is certainly no guarantee in life, it does help employers to make the big hiring stack much smaller when they eliminate those without college degrees. Many jobs will not let an applicant apply unless they have a Bachelors degree.

If we ever have another Great Depression like what we had in the 1930s, then we will see many college educated people selling apples for a nickel apiece (figurative analogy, of course - but you get the point).

Yesterday I was driving passed a large store that had a big sign out front that read "Managers Wanted" and I contemplated how my Bachelors degree in business management might help me to get the job, if I were to apply (I won't apply, but was just musing). Having a target-specific degree for a target-specific job can definately help open doors.

Has the value of education diminished??? Yes and no. Do I sound like a politician? In the 1930s and 1940s, if you were a high school graduate, it was special because not everyone had the opportunity to complete high school. The value of a high school diploma was great. But since so few people had high school diplomas, the Army offered my grandfather a direct commission as a captain because of his business experience, even though he only had an 8th grade education. That would never happen today. Why??? Because educational values, standards and perceptions of these issues have changed. Today the Army requires a Bachelors degree to be commissioned. I'll go out on a limb by saying this because it's very subjective, but IMO the value of today's Bachelors degree is probably akin to the value of a high school diploma from the 1930s and 1940s. Is it the exact same??? No, of course not.

As another example of changing standards... there was a time when all you needed was a Bachelors degree to be an MD, but today that is no longer true. The Bachelors degree is simply a prerequisite for entry into medical school. Again, values, perceptions and standards are continually changing.

In light of all of the above, now is definately not the time to forgoe a college education at the Bachelors level. If the only reason you are pursuing an education is to make money, then I would recommend an esoteric degree that is above the Bachelors degree, such as a MD, JD, etc.

There was also a time when being an MD was all about nobility, along with a genuine care and concern for the welefare of our fellow man. However, I now see the MD curriculum as a pathway to great riches, at least for many. But we won't broach the issue of medical costs because that could be a book unto itself.

So the value of a high school diploma has probably diminished since the 1930s and 1940s, but as the Bachelors degree has now become a basic prerequesite for many jobs, it's value may be increasing. Again, it's very subjective because it depends on the specific job market that you're looking at.

 

To further the debate here are a couple of links dealing with this phenomenon.

http://www.businessweek.com/the_thread/economicsunbound/archives/2005/09/the_continuing.html

That link has some interesting charts.

http://econlog.econlib.org/archives/2005/09/education_and_i_1.html

It does appear that undergraduate degree holders (bachelor’s degree) may be loosing their advantage in regards to increase wage gains. The issue becomes how much gets lost before the demand for the degree shrinks or that the degree becomes mandatory for even "menial" work and people with less than a Bachelor's degree are left out in the cold. It is interesting to note that “Associate degree” holders (according to the business week chart) are fairing better than their Bachelor counterparts. Supply and demand forces of course are at play, this of course indicates either a decrease in demand or an increase in supply. In any case it could become a major issue for undergraduate degree holders if the trend continues long term.

 

I would start off by agreeing with Steve when he says that these days there is almost an assumption that a person will have some college training. There are more ways to earn a degree now than in years past and many employers will pay a substantial amount of the costs. Enlistment in the military continues to be a viable alternative for many who want to get that college education but do not have access to the sorts of resources that can make it possible. All this would seem to point toward the fact that socio-economically there is a strong push toward college education.

Beyond that I'd only point out that it seems pretty clear that there's been a sort of inflation around educational attainment. In my fathers time it was considered to be more than adequate to have simply finished High School. If, in 1950, you had a Bachelors degree then you could pretty much write your own ticket and look forward to a prosperous lifestyle. Now a BA won't even necessarily get you an interview. There are over 200 DL MBA programs. It sometimes seems that you have to have a Masters degree just to be in contention. There are plenty of people on this forum who feel that they have to earn a Doctoral degree just so that can separate themselves from the pack. All of this suggests to me that college education will, in fact, become more essential in the future than it is today.

Oh yes. I would also like to point out that there is a significant value to higher education beyond how much money you might make. Not only does the learning process itself have value in terms of helping people to feel alive and in touch with interesting aspects of life, but being more aware of the larger world of knowledge, be it literature, statistics, philosophy, chemistry, etc. It is just plain good to know this stuff, even if it doesn't directly translate into a bigger paycheck.
Jack

 

I think that the value of education is the development of your ability to think and analyze. You really are investing in yourself. I guess if a person chases the diploma and not the education then that may be a waste of time.

The world is now largely uncertain and the need to think on your feet is required more than ever. The effects of a mega China and India will impact massively on global markets. Coupled with terrorism and uncertainty in oil, then anticipating what will be required in the workplace is probably crystal ball gazing. The exception is the ability to think. Workplaces will require smarter and more efficient workers, no matter what the industry. I suspect the worry about being employed will eclipse the hourly rate considerations, until some stability is gained.

The only certainty is that industries will still need thinking people, and that education has a better return on the dollar in achieving than any other method. I personally think that liberal arts will re-emerge as a popular degree for that reason.

A specific degree may be less flexible in crossing industries than a multi-faceted degree like liberal arts. Liberal arts elevated western civilization to first world status. A large number of professions, such as law and medicine, are attempting to build this into their professions by the requirement of a first degree before entry. In Australia now, it is hard just to study law or medicine. There must be either a first degree or an arts component in the professional degree. I think that shows what the industries are after, an ability for lateral thinking.

 

Well said -- I totally agree with this. I just wish more people looking for the "easy" credential felt the same.

 

I find this thread very interesting and felt compelled to add my .02, for what it's worth.

I work in the field of journalism, where it is generally assumed that everybody has at least a bachelor's degree. However, I got into the field back when it was not a requirement. I received my education/training in the field in the U.S. military, and later got additional broadcasting training at a vocational-technical school, but earned only a diploma, not an AA or AS degree. I also spent several years learning on-the-job (which was extremely valuable) and reading a lot on my own. I am considered to be a very able and credible journalist, and I have steadily worked my way up in the field (I'm a network reporter). I have worked with journalists with master's degrees and have had them ask me for help with certain duties.

That being said, there have been many, MANY instances during my career in which not having a BA or BS has held me back, usually when it comes time to look for another job. A bachelor's degree is considered a MINIMUM qualification to even be considered for the job. Despite my more than two decades worth of experience, it is sometimes not enough to be considered a viable candidate for certain positions.

A number of years ago, I went to a B&M college to study in their Bachelor of Liberal Studies program, but I was offered a job opportunity I just could not pass up, and I was forced to drop out of college after just one semester. I was carrying a 3.8 average. At the time, there was no DL program being offered through the school I was attending.

I often wish I had stuck with it, or continued to study via DL back then, but the hours at work just would not allow me to do that. Now I am looking ahead to the future, and I have children that will soon start going to college. I am determined to earn my degree before my children, not only so I can remove the roadblocks in my career once and for all, but also so I can serve as an example and inspiration to my kids. I can't very well impress upon them the importance of higher education if I don't have an education myself.

I know there is a lot of talk these days about the lack of skilled labor in the U.S. workforce, and that beginning plumbers are earning $50,000 a year or more. However, the future of the U.S. workforce will be one which is information-based, and eventually a master's degree will be considered a minimum standard for the more desireable jobs. There are some career fields where this is already true. Those who do not bother to receive an education, even if they plan on "only" becoming a plumber, are selling themselves short.

 

TCord1964, I couldn't agree with you more.

"Determined to earn my degree before my children......."

(quoted by TCord1964, 26 Nov 05)

My older son is a Sophomore at Schreiner University in Kerreville TX (studying to be a teacher), and I'm just barely ahead of him in my last three classes at Bellevue U.

Wanted to impress on both of my kids the value of an education. My younger one is a HS senior, accepted next year for admission at both Rose Hullman and Rice U. (waiting to hear on MIT and CALTECH in mid December), aiming to be a Mech. Engineer. 800 on the Math portion of the SAT, 710 Verbal (by last years standards). Neither school considered the new Essay potion of the SAT.

Wanted to offer you some encouragement. Maybe I just got lucky, but both of my offspring bought into the philosophy. I'm killing myself to keep up with them.

Dave

 

Regarding the benefits of higher education to what might be called the non-economic viability of aging people, see the work of George Vaillant, summarized in his book Aging Well (Little, Brown, 2002). This book is profound on any number of levels. Highly recommended. Vaillant is a Harvard med school prof, and Harvard MD. Became PI on the three great longitudinal studies of aging. See what he has to say -- you won't be disappointed.

 

Here's some nice quotes that I recently used in a paper I presented on credentialism and the qualifications spiral.

When we come down to it, the only reason we believe that a man must have a college diploma to get a job nowadays is that everyone else seems to believe he should (Keats 1965, p.29).

To guarantee your children’s future, enrol them in the best preschools and follow that with the best of elementary and secondary schools. They must earn good grades in advanced placement classes, participate in tons of extra-curricular activities, get into a prestigious college or university, obtain that degree, and, Voila!: money, prestige and the good life are sure to follow Hersh (2005, p.229).

If it is so hard to get a good job with a degree, what hope is there without one? (Wolf 2002, p.179)

The credential is not a passport to a job, as naïve graduates sometimes suppose. It is more basic and necessary: a passport to consideration for a job (Jacobs 2004, p.154)

“I’ve flown four-engine jets for the Air Force for ten years, and I’m passed over for a Cessna-flying kid with a bachelor’s degree in English poetry”. Anonymous respondent to a survey of pilots of twenty airlines in the United States (Ezell and Bear 2005, p.126)

"I think that it’s a privilege. I think that all of us need to appreciate that having university education is not something that any of us should ever take for granted. And one of our failings as a country, of course, is we’ve created this culture in which young people feel that, if they don’t get a university education, in some way they’re not as good as someone who does".
Dr Brendan Nelson, Australian Federal Minister for Education, when asked if university education was a right or a privilege (Fullerton 2005).

Cheers,

George

 

Jack is using the old “intrinsic “value argument. Indeed a degree may be a benefit it's to recipients in the realm that they know more. This is a great argument if you have the means to obtain an education, just for the sake of having one. Ihave never understood how a student can go to Harvard College and obtain a undergraduate degree in Philosophy or even education for that matter. The average teacher salary for one year is about what it will cost for one year at Harvard how can anyone justify that type of bill.

Here is some doom and gloom..

Yet for some people education is a way to a better economic future and by taking that away will eliminate the very reason they are in University to begin with. If there is no ROI (return on investment) on spending what could equate to a house or more in some cases (e.g. Harvard) it will completely alter the landscape of higher education, especially in the US. It will only be those of privilege who obtain a degree.
The end result is you have a less educated society.
The real danger for the working class is that a degree becomes mandatory even for menial work. This could result what may equate to indentured servitude due to the fact wages are so low and the cost of education so high. The reality is you will never be able to get on with your life, have children or anything of the sort if you are making minimum wage. Never mind throwing Student loans into the mix (that is if the government is generous enough to continue to funding).

 

Excellent quote. It reminds me of the Army where you can have an enlisted man with 15 or 20 years of seasoned experience who is subordinate to a 22 year old kid who just entered the Army and is placed in a leadership position simply because he has a Bachelors degree with ROTC. This is based on the feudal system in Europe where only those of nobility were allowed to be officers while the commoners were enlisted. That leadership model is no longer relevant for the 21st Century.

I read that the Israeli army has a more relevant approach for selecting officers. Instead of selecting a kid simply because he has a Bachelors degree with ROTC, they select seasoned enlisted men who:
1. Have demonstrated competance
2. Who have an interest in being a career soldier.

Those Jews are pretty intelligent.

 

In the Global environment as George said, education is a privledge, but most here already know that. There is a large percentage of the world that does not have the means or access to go to a university.

If we have moved out of the industrial age and into the knowledge-based informational age, how can we even hope to seek and find employment when we do not have the "basic informational credential", a college degree?

If America cannot compete in the informational marketplace, will it regress back into an industrial nation due to the lack of qualified skilled knowledge based workers out of need? Will it continue to outsource to the point we no longer see a natural rate of unemployment of 5-7%, but see our unemployment rates hit 20-30%? Can our nation carry this level of unemployment and not become a socialist country? And if so, how can it compete with other industrial nations with our cost of living and expected standards of living?

If anything, I believe a college education is more important today than 30, or even 20 years ago.

William

 

Tim makes a good point here but I believe that he has made two mistakes in his arguement. The first is his assumption that everyone shares his values. There are people who will incur the debt and take lower paying jobs because that is part of their value system. The fact that Tim can not understand how people might do this doesn't mean it is not understandable, it only means that he can not imagine having a value system that is substantially different than his own. There are people all around you who have made such decisions. Are you so sure that your mailman doesn't have a college degree? How about your car mechanic? I know a guy with a degree in English Lit who works as a welder. He write a book review/movie review column for his local newspaper. He lives a fairly simple life, pays for everything with cash, is home every ight at 5:15 and helps his kids with their homework. He is quite happy.

Tim's second mistake is his thinking that Harvard costs so much. Some time ago they announced that no student who is offered admission will be turned away due to their inability to pay. Harvard has a huge endowment and they use a substantial portion of it to fund the education of the brightest minds in the country.
Jack

 

As Jack points out, virtually no one who would miss the tuition actually pays it at Harvard thanks to that beautiful endowment. I am wondering how many philosophy majors you know who are unemployed; in my experience, it was a difficult degree to earn and for me it never failed to impress employers favorably. But the real danger isn't the student who mortgages the farm to go to Harvard; it's the student deep in debt for a low-tier school who has no actual goals or career plans. People who get into Harvard tend to have goals (even the philosophy majors).

 

Thought provoking:

Yes, I see us:
- going into socialism under the guise of capitalism
- outsourcing to the point of high unemployment in the states.