Popping the Bubble of Expectation
Have you noticed that the $50 bill is now the new $20?
I can’t exactly say when it happened, but this is the most obvious indication to me that the value of money has declined over time. I remember when a $20 bill could get you a tank of gas, dinner and a night at the movies. Now you can just squeeze in that tank of gas and (maybe) a bag of popcorn. And so, it seems to me, the same can now be said of a college degree, which is now the high school diploma of the 21st century.
In a Huffpost article I was reading this morning, I was struck by the discussion of the apparent demise of the American “middle class,” which seems poised at the brink of generational insolvency. Here is a quote which resonates for me:
“America today has plenty of rich and super-rich. But it has far more families who did all the right things, but who still have no real security. Going to college and finding a good job no longer guarantee economic safety. Paying for a child’s education and setting aside enough for a decent retirement have become distant dreams. Tens of millions of once-secure middle class families now live paycheck to paycheck, watching as their debts pile up and worrying about whether a pink slip or a bad diagnosis will send them.”
While there are several discussion points in that quote, I want to focus only on the financial value of a college degree. Consider the following:
- Unemployment among college grads is at historic highs
- Old statistics supporting the notion that a college degree favors a higher salary are outdated, particularly when it comes to liberal arts
- The outlook for hiring for 2010 college grads shows no improvement.
- According to a study at Michigan State, the average salary for bachelor’s degree graduates will be $39,900 (down from about $49,700 pre-recession)
- Anecdotal evidence supports the notion that a college degree is now a base requirement for employment
It seems obvious if you think about it; and if you “click-off” the young adults you know with sheepskin, you will undoubtedly find a surfeit of office workers, service jobbers (think waiters and rental cars…) and “temps.” Many of today’s jobs require little in the way of calculus or Shakespeare, but much in the way of personality and common sense–not exactly what first comes to mind when you consider spending the family fortune for four years at XYZ University. The blatant exception here seems to be in the sciences, particularly engineers of all types, who command significant premiums, often approaching six figures.
Discouraged? Don’t be. My twins still want to go to college next year (though I am not “making” them go). I have no doubt that they will do well…but I will advise them not to expect giant income. That will depend much more on their own ambition and work ethic than it will on a degree.
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