A client e-mailed me yesterday about her student loan debts that netted her three college degrees and a job without a commensurate income and future.
She has a Bachelor of Arts Degree from New York University, a second Bachelor of Arts Degree from the London Institute and a Master of Arts Degree from the University of London.
“If education is not a great factor in making the ‘big bucks’ why do people stress that,” she asked, “especially a lot of companies that only want to hire college educated employees? I so regret the major amounts of money I am in debt for because of higher education, and the three degrees I have have not gotten me any further than anyone else. I guess life isn’t fair.”
She asked an excellent question. Here are some considerations in no particular order:
1) Colleges and universities are not part of the same world that exists around them. They are isolated special interest groups with no other primary purpose than to ensure their continued existence.
Job one for them is to stress education as the answer to all of life’s issues and ills, thus, get a degree and earn a lot more money, get a degree and start doing something you really want to do, get a degree and get hired quicker, get a degree or many corporations will not hire you, etc.
Their real purpose is to generate enough income to support the salaries and lifestyle of those involved in perpetuating the enterprise. A tenured professor must be paid even if the subject he or she is teaching has almost zero demand in our economy.
If colleges and universities really told the truth about what you could reasonably earn after you acquire your degree, enrollment would plummet in certain subject areas. Students would stop being skydivers without parachutes.
Colleges and universities will put 120 students into a program that there is absolutely no need or demand for in the marketplace. What will a student do with an art history degree when there is zero need for people to run the few museums that exist.
You cannot turn out 120 students a year at each university when the annual demand for what they have to offer is 22 openings at all levels nationwide. This is why education majors who do not want to teach in South Central Los Angeles end up as shift managers at a McDonald’s restaurant, or as a life insurance agent for Prudential.
2) Not all degrees are equal. A Bachelor of Arts in history is pretty useless unless you switch to teaching history. Get a Master of Business Administration degree from a top 20 school and your chances improve. Get a Doctor of Medicine Degree, become a physician and surgeon and your chances are even better.
Degrees that lead to a high paying profession pay off, everything else has little real impact on your salary.
3) Corporations want to hire college graduates not only because they believe educated workers will make them more money, but also because it is their best guarantee that the person they are hiring is literate.
They want to be assured that the new hires can speak and be understood by fellow staff members, and are not so illiterate that they will drive away customers and clients by showing, through their lack of communication skills, that they are stupid, lack grammar and diction, and have the personality of an ashtray.
4) Facts: Results from the 2004 Census Bureau report shows a $23,000 difference between the average annual salary of adults with a bachelor’s degree ($51,554) compared to adults with a high school diploma ($28,645).
In what may or may not be an anomaly, the income gap narrowed slightly from five years earlier when bachelor’s degree graduates made nearly twice as much as high school graduates.
Notice the fact says “the average annual salary” which means that in this total is a brain surgeon making $1.2 million a year and a ditch-digger making a minimum wage of approximately $7 an hour or about $14,000 a year. This produces an average difference of only $23,000.
Throw out the brain surgeons and ditch-diggers of which there are very few and the difference is even less.