Yes – a College Degree Is Worth It

Worth It? Worthless? Worth Less?  All three questions need answered as you make decisions about your future. These questions are important because confusion aboundsBuzz Today Source: Chronicle of Higher Education   “As of April, 2014, the unemployment rate for college graduates ages 25 to 34 was 3 percent. The wage premium for people with bachelor’s degrees has been rising steadily since 1980 and now stands at 98%* …With regard to student debt, only 2% of students owe more than $100,000 while 43% of student borrowers owe $10,000 or less. College is not only still a good investment, it is the best investment you can make”.  *This means that bachelor’s degree holders have nearly twice the income of high school graduates.

The data in Buzz Today unambiguously answers the first question: Worth It? If you want to have a better chance to get hired and earn twice the income get a bachelor’s degree. The data show that people with bachelor’s degrees are more likely to get a job and, when employed, make almost twice as much on average as those with only a high school diploma. Does this data mean that you will be guaranteed a job making twice as much as you would  have made without the bachelor’s degree?  No. There are no guarantees in life. A college education is no exception.

This brings us to the issue of Worthless. College degrees are awarded in different disciplines. This means that merely getting a degree is not enough. What you learn while earning a degree and, to a much lesser extent where you learn it, matters a great deal.

So here are two scenarios that relate directly to the Worthless issue. First, if you start out to complete a bachelor’s degree and fail to complete your bachelor’s degree (which about 54 million Americans are doing today), your investment is not completely worthless but it is pretty close. The compensation difference in BUZZ Today is based on those who actually have their bachelor’s degree. Taking some courses may make you smarter but having the degree is a way for employers to decide whether you are a candidate for their open jobs. Completing the degree is very important in the job market place.

The other way that you can create a worthless (i.e. a significantly less valuable outcome) is to earn a degree where there are no jobs that require the knowledge gained during your studies. Here the professors passionately argue that an education is about more than money. I agree. Worth is a big concept than money. But for now the Worthless conversation is about the economics of your degree efforts.

The Worthless question is not about you, the school you attend nor how much smarter you are. The Worthless question is about whether an employer will pay you an attractive salary for the knowledge and shills you have. The fact is that it is possible for you to earn a degree where there are no open positions to fill. In this case there simply is no demand for the knowledge you have acquired with your bachelor’s degree. This may seem unfair, short sighted, cruel or any number of other negative descriptors. In the end it is still a fact. Employers are not going to pay for knowledge they do not need. Period.

The last item in this Worthless conversation is my advice to you. If you are truly interested in what your degree will be worth in the job market do your research on job opportunities before you enroll. To get that job market information go to O*NET and do your research. Your Future is Calling guides you on how to use that valuable data.

The last question is about Worth LessWorthless is about employers and jobs. Worth Less is about you. Here is how to look at this question. In an earlier Learn Prosper blog titled “Careers Begin with What You Learn” I shared that two thirds of employees under 30 are still searching for the right career and intend to switch careers within two years. This data show that for a large number of our young, the choice they made has been worth less to them. What they studied failed to get them into the “right” career for them.

But the issue about Worth Less is not merely about a career. This issue is about how well the area of study in your degree program fits “who you are”. This is about degree fit with you. For example, if you are passionate about teaching a career in that field is what you want to do in life. The fact that you will earn less is not relevant to the issue of worth less. In fact, becoming a teacher when it fits “who you are” is worth more to you than becoming an investment banker where you have the potential to earn far more. In this example, becoming an investment banker is indeed worth less to you. The point is that it is not all about money.  But to keep your bachelor’s degree from becoming worth less you have to know a great deal about “who you are”. This issue is not about jobs and salaries. This is about you. To learn about how to find out “who you are” go to the first chapters of Your Future is Calling. Some work there can help you make sure that your degree is not going to be Worth Less to you. No one else; not me, not employers, not professors, not your parents matter in this part of the Worth discussion. This is about you.

Go for it. The tools and information to answer the Worth questions are available. You just need to learn where they are and how to use them.

What Employers Want You to Learn

Employers want you to have a very specific set of personal skills. Among the top of the list are:  critical thinking, written and oral communications, inquiry and analysis, quantitative literacy, information literacy, team work and problem solving, life long learning. Notice that this list of priorities does not include, “a college degree from XYZ university” or “a major in ABC”.  This list prioritizes what you need to be able to do to be a valued employee. Your challenge is to wisely invest your time and money in learning that can provide these personal skills. The bottom line is that simply getting a college degree (“getting the piece of paper”) is not sufficient to meet these employer needs.

You need to learn to be able to compete today. Far-reaching global, economic and technological developments have converged to make post-secondary learning an imperative for almost everyone.

Buzz Today Source: Liberal Education and America’s Promise (LEAP): Excellence for Everyone as a Nation Goes to College Both the country’s future economic growth and individual opportunity are now closely tied to the attainment of high levels of knowledge and skill, and to the ability to continuing learning over a lifetime. Former Harvard University President Derek Bok reports that college students are under-performing in virtually every area of academic endeavor including skills such as critical thinking, writing and quantitative reasoning.

So a question you should be asking is: “Why are employers looking for better ways to hire?” I defer to Laszio Bock, Google’s senior vice president for people operations to answer this question. “One of the things we’ve seen from all our data crunching is that G.P.A.s are worthless as a criteria for hiring and test scores are worthless – no correlation at all except for brand-new college grads, where there’s a slight correlation,” Bock said. “Google famously used to ask everyone for a transcript and G.P.A.’s and test scores, but we don’t anymore, unless you’re just a few years out of school. We found that they don’t predict anything…On the hiring side, we found that brainteasers are a complete waste of time. How many golf balls can you fit into an airplane? How many gas stations in Manhattan? A complete waste of time. They don’t predict anything.” Source: New York Times Interview

The important thing about this information, is what it means to you – someone trying to decide the best course of action to your learn-prosper future. Here is the main take away. When it comes to getting a better job, one that is challenging, fulfilling and pays well, the things that have been valuable in the past are far less valuable today. Your opportunities are much more defined by how accomplished you are in the skills listed in the first paragraph of this blog than either the major or which college or university you attended. This all brings us to a discussion about the cost and value of your learning. This is a topic I will cover in future blog posts here. In the meantime, it is valuable to read “Your Future is Calling” to better understand why you should view learning as the path to the prosperous future you desire.

What You Need to Know About Careers and Education

Learn Prosper is real. Two out of three jobs available today require some form of learning credential. There are millions of job opportunities every month. The overwhelming majority of those opportunities require that you have education credentials to even be considered. The BUZZ Today has the data. The analysis is in the body of this post.

Buzz TodaySource: US Bureau of Labor Statistics There were 4.0 million job openings in December 2013 and there were 4.4 million hires in December 2013. This makes a total of 8.4 million opportunities to find a new job or career in one 30 day period at the end of 2013.

The argument is over education in the future. There is a lot of debate about whether the forecasts for future jobs are real or not. The Lumina Foundation has a big goal: “To increase the proportion of Americans with high-quality degrees and credentials to 60% by the year 2025”. Another forecast of the demand for degree credentials comes from the highly regarded Georgetown University Center for Education and the Workforce which forecasts that the decade growth ending in 2018 will create 47 million new job openings. Of those new jobs, the forecast is for nearly two-thirds of them to require some post-secondary education.

Recently, some have argued that the value of an education is overstated and that forecasts of future labor demand are flawed.  Much of this argument is entangled with the fact that higher education has become too expensive. This fact is true. Higher education in America has become too expensive. But this is a different issue than whether labor markets demand an education.

The BUZZ Today data shows that there are millions of positions available in the labor markets today – 8.4 million opportunities last December alone to be precise. The jobs are there. What you need to know is what it takes to qualify. Here additional information is valuable.

The massive job posting service has studied the mix of current job postings on their web site. What they found is that 60% of those postings required a bachelor degree or above. This is data on the job market today, not some contested forecast about future labor market conditions.

There is one additional fact that you need to know about this issue of career opportunities and education. Companies are receiving massive numbers of resumes for every position. To handle this very real challenge, most large companies use resume screening software to qualify job applicants. If your resume does not match the key words and qualifications of the job posting you will not get an interview. The bottom line is that for the vast majority of the millions of job opportunities you must have a degree credential to even be considered for the position. Without the credentials, it is extremely unlikely that you will be invited to interview.

The main conclusion is that an education vastly increases your chances for a new career. For personal guidance on how to most efficiently obtain that education, go to Your Future is Calling. The book is full of helpful guidance on linking “who you are” to careers and the education path you need to get to the future you desire.

What You Need to Know About the Value of Education

We know a lot about the cost of an education. It costs too much. Here are some other things we know about education. Growing student debt is a student problem that is rapidly becoming a threat to growth of our economy. These issues are getting a lot of attention these days. In contrast, there is little good information about the value of an education today. This post is devoted to the value indicators.  Buzz Today Source: Pew Research Center “The Growing Economic Clout of the College Educated.”College-educated households are the only households whose incomes have grown on a per household basis from 1991 to 2012. There are a number of factors at play in boosting the household incomes of the college educated relative to less-educated households. A primary factor is the better fortunes of the college educated in the labor market. The Georgetown Center on Education and the Workforce finds college graduates earn nearly twice as much as workers with just a high school diploma.

Value Proposition number 1: Education is the key to upward social mobility. Research shows that it is possible to move up in society – with an education. Source:  Federal Reserve Board of San Francisco: A college education can counter the effects of birthright. Only 5% of children born into the bottom quintile (lowest 20%) who don’t graduate from college end up in the top quintile (top 20%). By contrast, 30% of bottom-quintile children who graduate rise to the top quintile (from the bottom 20% to the top 20%). This is clear evidence that a college education is key to the American Dream of having a better life than one’s parents.

Value Proposition number 2: College favorably impacts skills that are important to compete in our modern global economy.  Source: “How College Affects Students: A Third Decade of Research”. All of the following critical skills were found to have statistically significant improvement as a result of a college education. The list includes:

Verbal skills    Quantitative skills     Speaking skills      Written communications     Critical thinking skills      Conceptual complexity.

A survey of employers shows that employers are looking for these very skills.  A report from the American Association of Colleges and Universities  provides data from a January, 2014 survey of 318 corporate executives showed that 93% of those responding agreed that “a demonstrated capacity to think critically, communicate clearly, and solve complex problems” is more important than the skills of the candidate’s undergraduate major.  And 75% of those surveyed said they want more emphasis on critical thinking, problem-solving, written and oral communications and applied knowledge.  And 95% said they want new hires to demonstrate ethical judgement, integrity and the capacity to continue to learn.

Value proposition number 3: College educated households are the only one’s with growing household incomes. All other levels of education have actually declined.

Household Income (2012 dollars)

Education                                  1991              2012             Percent change

Less than high school             $33,959       $32,631                 -4%

High School                                 54,707         52,199                  -5%

Some College, no degree           66,038        63,008                 -5%

Associate’s                                    72,407        68,902                  -5%

Bachelor’s                                     92,289       100,637                +9%

Master’s                                        104,193      114,897               +10%

Professional                                 150,869       180,671               +20%

Doctorate                                      131,365       150,087               +14%

Source:  Pew Trust Research

When you look at the difference between the income for Some College, no degree and the income of a Bachelor’s degree you can see why it is so very important for those with some credits but no degree to complete their college education and graduate.  The difference in income is worth, on average, over $37,000 each year. There are about 38 million Americans in this position.  The irony is that with wise choices, it could cost as little as another $25,000 to complete that degree. Doing that would be of immense value when the value created every year is much more than the total investment.

The cost of an education is pretty clear. The value of an education is less clear. And least clear of all is how to get the value of an education without incurring the high costs that are so widely reported these days. For the latter, see Your Future is Calling for exercises and valuable data.