A four-year college degree, seen for generations as a ticket to a better life, is no longer enough to guarantee a steadily rising paycheck. For decades, the typical college graduate’s wage rose well above inflation. But no longer. In the economic expansion that began in 2001 and now appears to be ending, the inflation-adjusted wages of the majority of U.S. workers didn’t grow, even among those who went to college. The government’s statistical snapshots show the typical weekly salary of a worker with a bachelor’s degree, adjusted for inflation, didn’t rise last year from 2006 and was 1.7% below the 2001 level. College-educated workers are more plentiful, more commoditized and more subject to the downsizings that used to be the purview of blue-collar workers only.”
—The Wall Street Journal, July 17, 2008
I was listening to a this American Life program with a segment titled “Hey Mister DJ.” In it NPR financial reporter, Adam Davidson, attempts to convince his cousin, DJ, to go back to college.
The spoiler is the Georgetown economist that he enlists to convince DJ ends up taking DJ’s side of being a dropout.
I don’t object to the advice per se. But I do have three issues to pick with this idiot economist.
- The economist claims that because DJ’s job is non-tradeable it is more secure than a job after a college educator? Where is the economic data for that? The answer is, there is none.
- The economist says that the reason people want you to stay in college is “because [college educated people] have snotty biases” Where is the proof of that? The answer is, there is none because it’s a statement of belief. Dj admits that the members of the family who have been college educated are “very successful.” I guess very successful == snotty. I’d like to see that economic study.
I shouldn’t be surprised of such a fact-free advice from a .
Why does that get me angry? Because here are the facts.
- A college graduate earns, on average $25,000/year more than a high school diploma. Adjusted for inflation and the cost of that education, that’s $300,000 ROI—pretty much the best deal around.
- You need a college education to get a higher degree which opens even larger pay and higher lifetime economics ROI. A college education doesn’t preclude you from any of the jobs that DJ has had.
- Here is a typical statistic against a college education, it comes from the Wall Street Journal and I quoted it at the top of this article. Read it very closely, what it is saying is that the wage gap between college and high-school is no longer increasing and that you have to get an even higher degree if you want guaranteed employment. The clever use of words omits the fact that from 2001-2006, all wages have been depressed—hence the economics term “jobless recovery.” It never disputes the basic premise that college-educated workers make more money, have more job security, and have more stable and healthier households. And how will you get that higher degree anyways without a college degree?
Let’s apply my overpriced, college-educated brain to this economics professors arguments, shall we? (All of which gives me my third issue with her if you’re counting at home):
Continue reading about The application of my college education after the jump
