Does a College Degree Protect your Career? Unemployment Rate for College Graduates Highest on Record.
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As many students begin applying for the 2010 academic school year, students are looking at an economic climate where endowments are hit, student loans are more restrictive, and parents have seen 529 plans sink along side their retirement plans. The upcoming school year will be highly competitive and expensive but will it be worth it? Now college itself isn’t a direct link to a career and many bristle when they hear about vocational training. Yet when someone is paying $50,000 a year, you have to ask what exactly you are paying for.
With the recent unemployment rate hitting 9.7 percent officially, the wider ranging U-6 rate hit a record of 16.8 percent. The market took the 216,000 job losses as good news but the recession is much deeper than the headlines are showing. If you dig deep into the report, you will find a few curious observations. First, the teenage unemployment rate is the highest in nearly half a century coming in at over 24.2 percent. Now this rate is always high but only in August of 2008, it was at 17.8 percent. Another observation in the report that we find is those with college degrees are facing the highest unemployment in two decades since records started being kept.
With college costs going through the roof and in many cases, costing nearly $50,000 a year at private schools many are asking whether some college degrees are even worth pursuing. Or more importantly, potential students are seeking answers regarding value. Let us look at this trend more closely:
You’ll find a curious trend here. Without a doubt, those with a college degree do better in the marketplace. Take a look at the recession in the early 1990s. A college degree seemed to be a better buffer at that time than our current recession. For the first time in record keeping history, the unemployment rate for those with 4-year degrees or higher has passed the 4 percent mark. Keep in mind that in the United States, only one in four has a bachelor’s degree or higher. We tend to think of this group as largely immune but in deep recessions like this one, a college degree no longer protects you from the fluctuations of the market.
The massive increase in college tuition needs to be explored. If you think about someone going to school to pursue a career in say social work, a noble career, is it really worth it to go into $100,000 to $150,000 in debt for a career that pays $30,000 to $40,000 a year? In a situation like this, a student may benefit by going to a lower priced state school instead of a private institution. Certainly many will go to top schools simply because of the implied pedigree of an institution especially if they want to enter into the top law firms or seek higher positions in certain corporate sectors. Yet many are realizing that too much college debt is not a good thing.
If you think this isn’t the case, just look at how many people are having trouble paying their student loan debt. Red means conditions have worsened and this is for 90+ days late year over year:
If you look at the population centers of California, Florida, Texas, and New York student loan debt has worsened practically in the entire state. Clearly the current economic recession has much to do with it but also, the fact that those with college degrees are losing jobs in large numbers as well. Many are no longer able to service their own debt. As we have mentioned, a college degree does not protect your job nor does it assure you in getting one. Some are even suing because of this:
“NEW YORK (CNN) – A recent college graduate is suing her alma mater for $72,000 — the full cost of her tuition and then some — because she cannot find a job.
Trina Thompson, 27, of the Bronx, graduated from New York’s Monroe College in April with a bachelor of business administration degree in information technology.
On July 24, she filed suit against the college in Bronx Supreme Court, alleging that Monroe’s “Office of Career Advancement did not help me with a full-time job placement. I am also suing them because of the stress I have been going through.”
What I find troubling is the idea that simply attending college is the ticket to a job. Also, what is more disturbing is many of the for profit institutions with no pedigree try to push people through to continue getting those nice loan checks each semester:
“In her complaint, Thompson says she seeks $70,000 in reimbursement for her tuition and $2,000 to compensate for the stress of her three-month job search.
As Thompson sees it, any reasonable employer would pounce on an applicant with her academic credentials, which include a 2.7 grade-point average and a solid attendance record. But Monroe’s career-services department has put forth insufficient effort to help her secure employment, she claims.
“They’re supposed to say, ‘I got this student, her attendance is good, her GPA is all right — can you interview this person?’ They’re not doing that,” she said.”
Good attendance? A disciplined worker with no college degree can be punctual 2.7 is not an “all right” GPA. The problem now is that we have someone with “subprime college debt” of $70,000 and no viable job prospects. It would be different if they had only say $10,000 in debt but $70,000 is simply incredible. And how many people are graduating like this into a terrible recession where employers have their pick of potential applicants?
The U.S. Treasury and Federal Reserve seem willing to bailout any mistake so it should be no surprise that students expect bailouts as well. They are simply following the lead of our central bank. It is also a question of what degrees are being awarded. While we had many chasing degrees in finance to pump out paper to increase the housing bubble, globally other nations focused on making actual things:
Source: CSMonitor, 2005
Even after adjusting lower, we can see why things will remain tough. The globe is hyper competitive now. Many entering college now face the challenge of examining what they want to do with their lives but also, dealing with the economics of a new financial age. A college degree was never a guarantee of a job or career security and this will only become a stronger rule in the future.
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RICHARD RALPH ROEHL said:
It seems that most colleges and universities in the United $tates have become glorious [sic] football teams… more than institutions of higher learning. This is why college coaches, especially footballing coaches, earn six and seven figure $tipends ANNUALLY… whereas the physics professor earns peanuts and pissst water wages!
Furthermore… the current economic $ituation is making a mockery of having a college degree. Or two or three degrees. Indeed! The ever increasing cost of time and money to acquire a college degree seems a feckless and burdensome excercise… done more for the $ake of eeego than common $ense.
These days/daze… it makes much more common $ense to pursue a useful vocational $urvival $kill that’s wanted and needed by society. I need a plumber and a car mechanic… more than I need someone with a degree in correct-arse feminism… or crony banksterism… or perhaps some other $cam profession.
Wake up! See what has happened to colleges and universities in the United $tates since the 1960’s. See it!
September 6th, 2009 at 4:08 pm -
Carol Harris RN said:
I graduated in 1958 from a hospital nursing program. I have always
been employed until I retired. I have an AA degree and was a semester short of a BSN. I know that nursing is hard, but there
are many perks. If you come out of a 2 year program, most hospitals will pay your tuition for a bachelor’s degree. You can
get an LPN license after one year. LPN’s are making $25.00/hr in
my area in nursing homes. Nurses make about $60.00 a year in my
area in Charlottesville, VA. It is true that all of those science courses are “hard ” for some folks, but you will have a job. Most
nurses in my area work three twelve hour shifts and have four
days off a week.September 6th, 2009 at 11:32 pm -
PSzymeczek said:
Got my Master’s to get the heck out of the switchboard in civil service. 19 years later, I was fired from civil service for no good reason.
September 7th, 2009 at 10:17 pm -
Terrance Stuart said:
Higher Education is a business. Generally, the first two years are a rehash of what you should have learned in high school. A two year college usually can provide you those classes economically.
If colleges and universities were held to the same standard as pharmaceutical companies they should be required to give a warning to students that the course work they choose to take is no guarantee of future employment.
A short trip to careerstop on the web will allow you to drill down to the statistics on what is needed in the job market, what the range of salary is, and so forth.
We have obviously moved way past the notion that higher education is strictly for the sake of learning. Speaking of China, mnany of their so called engineers are not trained to the levels ours are, and they are still retiring k-12 teachers who could teach the 6th grade because they had attended the 6th grade. So the credentialing in China may be suspect.
The final truth is college graduate unemployment is at an all time high, but it remains lower then non-college employment. It is also interesting that in recent years females are surpassing males in numbers as college attendees and graduates. Strong vocational training may be more more valuable then many academic fields in the future, as energy prices may re-industrialize this country as the “global economy” may become a lot more localized by necessity.
September 8th, 2009 at 9:43 am -
John said:
An expensive 4 year college degree is worth it as long as you choose the correct major. I graduated as an electrical engineer with significant coursework in Finance in May of 2008 and I have a great job at a Bank. But classmates of mine with art history majors are surprisingly unemployed. Perhaps if they had thought about their job prospects 4 years earlier then they would have realized that their major was only for their own satisfaction.
November 2nd, 2009 at 7:35 am -
Sam Hill said:
College degrees have become overvalued. The education bubble.
It does not guarantee a job or a salary. If you take out a college loan
for a degree. There is a extremely good chance that the yearly salary you obtain will not be sufficient to exceed the cost of the degree in 10 to 15 years. Possibly longer. With two degrees I have been out of work for 24 months.November 13th, 2009 at 10:12 am -
Patrick said:
As a foreign national, who holds multiple US degrees, I have realized
that here in the US, it is not the years that you study that matter, but rather the difficulty level of your studies. Most Americans do not like challenging courses in science, math or chemistry. Americans love the easy stuff like a JD. Anyone can become an Attorney; you only need to be able to read and write. For Healthcare careers you need to know and understand science, something that requires the use of your cerebral cortex.For instance, a dental Hygienist, who only requires a 2 year associate’s degree, can easily make more than an attorney (a 7 year degree, plus 6 months of taking and passing the bar). How can this be possible? ECO. 101- Law of supply and demand. For instance, in FL there is way over 90K attys vs. less than 8 registered dental hygienist. Thus, a RDH can easily command a salary of $35.00 an hour, when working for a Dentist. An associate attorney in FL will normally get paid $25.00 to $30.00 per hour (unless he is working for an elite law firm or handling Personal Injury cases). Do the math; if you want to become an attorney, you will need to spend as a minimum $150k, not to mention the opportunity cost of not working for 5 years. For a RDH, you can go to a public school and spend $5K at the most, and you will not forgo the salary of 5 years-the additional amount of time that would require becoming an atty.
January 20th, 2010 at 9:59 am -
Patrick said:
Please note that the data in this article only shows Bachelors Degees for Science, which is irrlevant for high paying jobs, and or serious scientific research. NSF data reveal that in 2005, the foreign student population earned approximately 34.7% of the doctorate degrees in the sciences and approximately 63.1% of the doctorate degrees in engineering.
January 20th, 2010 at 10:43 am -
Patrick said:
FYI–NSF is National Science Foundation
January 20th, 2010 at 11:09 am -
Francesco said:
who decides to invest all that money in higher education must collect infos about the job market consider what employment possibilities there are and where they are.this means choose carefully your major and consider that u have to sutisfy the needs of the market and not viceversa.and dont forget another relevant factor..there are other thousands of students competing for the same job so when you choose your university and spend all that money,please be smart enough to not loose yourself in the childish campus life and work hard to be the best..possibly working part time on the side to learn the value of money.i’m from europe and you can bet that most students here extremely determined to fill the lack of “prestige” of the avarage european university with their strong commitment and their own sense of responsability.they kick their asses,working and studying,for mami and papi are not there financiating all that superfluous “campus life”.yet they graduate with excellent netes and come to your country to end up probably finding a better position than yours.i think the moral here is only one…work hard to be the best and you’ll be rewarded.welcome to the global market
January 25th, 2010 at 2:48 pm
