What is a college degree worth, really?

Everybody from Barack Obama to Bill Gates is pushing the idea that sending more people to college is the key to our nation’s economic future.  I would never deny that education is a good thing.  I would agree, up to a point, that education is a good economic investment, but that requires a certain amount of qualification.

The latest figures show that the United States has 317,000 college-educated waiters and waitresses, 80,000 college-educated bartenders, and 18,000 college-educated parking lot attendants.  There are 8,000 waiters and waitresses and 5,000 janitors and cleaners with doctoral or equivalent degrees.  In all, 17 million American college graduates are working in jobs that don’t require education beyond high school.   When I go out with philosophy professor friends, we sometimes run into their former students waiting on tables or tending bar.

Now these college graduates may not be working as waitresses, bartenders, parking lot attendants or janitors all their lives.  It’s traditional in the United States for successful people to begin their careers in lowly jobs.  It’s still true that, on average, college graduates are better off than those with lesser schooling.  And of course education – whether classroom instruction or independent study – has a value that can’t be measured in money.

On the other hand it costs a lot more than it once did to get a college education.  The average graduate comes out of college owing tens of thousands of dollars in college loans; one in five of those loans are in default.  And among older workers, college graduates have a harder time than others breaking out of long-term unemployment.  The payoff from a college education doesn’t always equal the cost.

We don’t have a problem with structural unemployment, people unemployed because they don’t quality for the jobs available.  Rather we have the reverse, people unemployed because they are overqualified for the jobs available. [Added 11/13/10.  We hear a lot about structural unemployment, people unemployed because they underqualified.  But not only are there large numbers of people who are overqualified for the jobs they hold, there are those who are rejected for jobs because they are overqualified.]

The question is to what extent getting a college degree adds value to the economy, and to what extent it merely helps the individual in an economic arms race.  A college degree may give you a better chance than a high school graduate or dropout of getting a good job, but college degrees for everyone won’t prevent those jobs from going away.

And – just saying – the history of other countries shows that when revolutionary or fascist movements arise, they are generally led by unemployed college graduates.

Click on Where Young College Grads Are Finding Jobs for a report on job opportunities for the current crop of college graduates.

Click on Why Did 17 Million Students Go to College? for an argument (which I reject) that the problem is too many college graduates, not too few jobs.

Click on The student loan train wreck for my earlier post on student loans.

Click on Older, more educated workers have the highest length of unemployment for a report on college graduates among the long-term unemployed.

Click on Table Long Term Unemployed for a chart showing the relation between education and long-term unemployment.

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6 Responses to “What is a college degree worth, really?”

  1. AO Says:

    My husband, who was the top of his class and finished a typically 4 year degree in 3 years at the University of Minnesota, works a “lumberjack” job for $10 an hour. I never finished college, but I run my own business — and I literally can make his entire day’s wage in two or three hours. It’s depressing.

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  2. ThinkAsTheyDoOrElse Says:

    How do you know people are unemployed because they are over qualified?

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    • philebersole Says:

      It is common knowledge (or at least common belief) that some employers don’t like employees who are overqualified for their positions. The rationale is that that overqualified employees are likely to leave as soon as they get better job offers, that they are likely to be malcontents, and that they are likely to have their own opinions about how the job should be done.

      I have a good friend who is in precisely that position. At considerable sacrifice, he earned an advanced degree in his field, which he loves. He thought the degree would be the key to a better future, but it proved the reverse. He finds that employers don’t want people with expert knowledge of a specialty. Rather they want jacks of all trades who are willing to work cheap. My friend pieces together a living through a patchwork of temporary and part-time jobs, none of them in the field in which he earned his degree. He is just under 50, and he does not expect to ever again work full-time in a steady job, nor to ever be out of debt.

      Click on the last two links in the original post for facts and figures that indicate he is not alone.

      Your question prompted me to reword the relevant sentence in the original post to express my meaning more precisely.

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      • ThinkAsTheyDoOrElse Says:

        I was suspicious that your view was anecdotal and curious if there was good research about this. I’m hardly an expert on this and heard just what you say long ago.

        The way you’ve rewritten it is quite sensible.

        Some people might not get hired because they act as though the job would be beneath them and this would confound the evidence about this.

        I was researching Bruce Sterling just this morning and found an interesting video of him giving career advice. There’s a bit of arrogance in his tone that were young folks to emulate they just might turn off employers.

        The arrogance of the tone is more pronounced in this video:

        http://www.egs.edu/faculty/bruce-sterling/videos/impact-and-sustainability-of-technology/

        I’m not saying your friend is arrogant, the over qualification problem might be a real factor in his situation or maybe there is some other skill lacking. Sterling mentions something about communication style in the first clip.

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  3. philebersole Says:

    Dear TATDOE:

    I like Bruce Sterling’s science fiction and read everything I come across that he writes (although I like his earlier work better than his current work). He does, however, manifest a cynicism and arrogance he has not earned by his life experience.

    Sterling is 56 years old. His comments reflect his life experience when he was young. He followed his bliss, with the help of his first wife who worked full-time outside the home while he was struggling to become established, Many people today, graduating from college into a bad economy with a huge burden of student debt, would have an even harder time than Sterling did.

    All other things being equal, people are better off in the long run doing what they love to do, what they’re good at and what gives them satisfaction. People today as committed, talented and lucky as Sterling was when he published his first Shaper-Mech stories in the early 1980s would not necessarily enjoy the success that he did.

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  4. philebersole Says:

    My friend belongs to a number of support and networking groups, whose members, like him, work harder and with greater focus in their job searches than many people in an earlier era did in their regular jobs.

    Their assumption is that all employers have so many applications from well-qualified job seekers that it will be extremely difficult to even be considered. They talk a lot about “personal branding” – doing things that will enable them to stand out from the crowd. All of them are willing to take virtually anything they can get, and do more than is required, just to establish a work history.

    I have other friends in the information technology field who dropped out of their professions, and worked at such jobs as substitute school bus driver or night manager of a homeless shelter. The problem with such jobs is that, when you put them on hour resume, they become an excuse for the human resources person to discard your application.

    And the problem with that, from the standpoint of the United States as a nation, is they have been taught skills that would have enabled them to make good contributions to the national well-being, and our dysfunctional economy does not allow them to do it.

    Education is a good thing. Job training is a good thing. But in an economy in which there are five job applicants for every job, more education and job training will not result in jobs for everybody.

    The U.S. job market is like a game of musical chairs. Every so often the music stops and somebody else must leave the game. People like my friend and the members of his support and networking groups are focused on what they can do individually to keep themselves from being the ones left behind. They don’t have time or leisure to stop and question how this game of musical chairs came into being in the first place.

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