College degree is no guarantee

A four-year college degree is no guarantee of prosperity, reports the Wall Street Journal. College graduates’ wages “rose well above inflation” for decades but plateaued in 2001. Adjusting for inflation, a college-educated worker earns 1.7% below the 2001 level.

College-educated workers are more plentiful, more commoditized and more subject to the downsizings that used to be the purview of blue-collar workers only. What employers want from workers nowadays is more narrow, more abstract and less easily learned in college.

To be sure, the average American with a college diploma still earns about 75% more than a worker with a high-school diploma and is less likely to be unemployed. Yet while that so-called college premium is up from 40% in 1979, it is little changed from 2001, according to data compiled by Jared Bernstein of the Economic Policy Institute, a liberal Washington think tank.

A small subset of workers with financial skills are earning enormous salaries in finance and corporate law. But most college graduates are finding that a BA or even a BS is not a ticket on the gravy train.

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  1. Is this because colleges grant meaningless degrees in subjects not needed by employers? Or do the graduates themselves lack basic skills?

    I’ve hired and fired a number of entry level employees in television and film. The ones who don’t work out seem to have no idea as to the basics of work–show up on time, do what they’re instructed to do, pay attention to details, and do basic math, understand the rules of written English, etc. They all want to make movies, but they don’t seem to know how to do the actual work.

    Also, very few–despite degrees in journalism, communication and/or film studies–know anything about current affairs, history before their births, or how to do research that requires more tools than Google and Wikipedia.

  2. Mike Mandel, BusinessWeek’s chief economist, in his 2004 book:

    “For the last 20 years, a college egree has been the rarest of anomalies–a low-risk high-return asset. College grads have enjoyed low-risk work lives, because low unemployment rates mean that they are rarely out of work. and with their wages rising much faster than inflation, returns have been high as well.

    However, as a general rule, high-return, low-risk investments are ephemeral. It is rare for them to last, because such an attractive investment would draw a flood of new money. It would be like the stock market always going up….In fact, the supply of college-educated labor has been rising, both at home and globally…All told, the latest numbers from the BLS show that the number of colleg traduates grew by an astonishing 5.7 percent from November 2002 to November 2003, or an additional 2.2 million additional college-educated workers.”

    Although even Mandel is surprised at how dramatic the current numbers are–see his blog.

    See also my 2002 post, an academic bubble?

  3. I know when I have interviewed teaching candidates, that I look for candidates with some kind of work experience, work ethic and some emotional intelligence. Even more than college education we need team players who are reflective and willing to learn. Finally, they have to like kids! I am shocked by how many people who get into education, who know little about children and what they need to be successful, in and out of the classroom.

  4. We keep shovelling illiterates through college and pretend it has meaning, what do you expect would happen? College is becoming the new high school.

  5. ucladavid says:

    A couple days ago, Joanne put up an article about the high school dropout rate at 25% in California (assuming it is that low). Now, she has put up an article on how the value of a college education is declining.

    Cal wrote that college is the new high school. So what’s high school?
    When I was going to school (I only graduated high school exactly 10 years ago), I didn’t learn how to write an essay until high school and I was in Honors English in middle school. Now kids are doing it in 6th grade. I didn’t take algebra until 9th grade because my middle school wouldn’t let any kid take it. (I am in the 99th percentile in math.) At my middle school where I teach, some kids are doing it in 7th grade and half the students are doing it in 8th. Thus, many students are getting a much more advanced education in school today than the one I received.

    Therefore, kids are learning more today in school, but many of those kids are not learning the material and dropping out.

  6. A master’s degree is no gravy train guarantee either. I know from experience.

  7. Parent2 says:

    Ucladavid, I don’t think our children are learning more in school than thirty years ago. Introducing elements of “advanced” (by k-8 standards) mathematics in younger grades does not mean that the students have a higher level of math achievement. Our school would tell you they “do” statistics, geometry and algebra in elementary school. Yet what it meant in practice was a few simplified elements of the more complicated topics were introduced. Doing geometry meant making the kids memorize the definition of geometrical figures, and learning formulae to figure out the area of a given shape. This treatment in no way substitutes for the formal language of proofs and deduction, which is the backbone of geometry, and the reason to teach it in high school, when more students are ready for abstract topics. Ditto algebra and statistics.

    If you teach in California, you are teaching to a different curriculum than my children are receiving. I have heard the assertion that children are learning more advanced materials at a younger age, but the materials I have seen don’t lead me to believe it.

  8. Stacy in NJ says:

    udadavid: We have a two tiered education system. My affluent suburban district offers algebra in 7th as well. The upper-middle class public schools “push down” academics. Many kids leave kindergarten reading. We have a mostly white and asian class of hyper prepared students. Kumons is filled with preschool and grade school kiddies. My understanding is that the ivies receive more qualified applications each year. Contrast that with the drop out rates in urban school districts, and the inability to even pass basic skills tests used as graduation requirements.

    It’s a culture issue. The competent are becoming more so. The kids born into the cultural desert that is our urban underclass; black, white and hispanic, are falling into a black hole.

    The most competent kids will get degress in engineering, business and medicine. They’ll never need to worry about the lost value of college education. The kids who squeeze their way out the those low performing schools and go on to get degrees in urban studies, psychology and education will fight to remain employable.

  9. Ragnarok says:

    “It’s a culture issue. The competent are becoming more so.”

    Not per TIMSS.

  10. Mrs. Davis says:

    When the government taxes something you get less of it. When the government subsidizes something you get more.

    For the last 75 years the government has been subsidizing housing, single parent families, underemployed elderly, big, education, and healthcare. Why are people surprised when we end up with crises in these areas?

  11. three important distinctions:
    1) 2001 is pricing things at a bit of a bubble point … many things have declined since then (except college tuition, it seems)

    2) the cost tradeoff side should demand more exploration

    3) the outcome for alternatives: some college, high school, some high school might look even more daunting. Article mentioned that the “college premium” remains unchanged since 2001.

    someone is surprised that there are few guarantees in life?

  12. First: there are no guarantees in life.

    Second: if a student can still get a degree while slacking off, not gaining the skills they need, showing a poor attitude in class…that degree SHOULDN’T be a “guarantee” of a good job.

    I’ve seen students from my department go out into the workforce with their degrees…the ones who actually worked and learned stuff and took opportunities (like doing internships) in college generally wind up with interesting and reasonably well-paid work relevant to their degree.

    The ones who did not, some of them bag my groceries at the wal-mart.

    A degree is not a magic piece of paper that says “you’re employable.” It SHOULD be evidence of four years of work and skill-building and perseverance, but sometimes it doesn’t…sometimes it’s evidence that someone paid their tuition on time and warmed a classroom seat for four years.

    I bristle at the whole “degree equals job” attitude because it seems to absolve students of the responsibility of working in college – that if they fail to get a good job after they come out, it’s somehow the profs’ faults. Which is silly, because students who took the very same classes from the very same profs and applied themselves wind up gainfully employed.

  13. > First: there are no guarantees in life.

    apart from death, taxes and clever headlines from Joanne