Too Many College Grads?

This week’s blog is inspired by my friend Rich Feller, who wrote to ask for my reaction to an opinion piece that appeared in the Chronicle of Higher Education. The article, called “Why Did 17 Million Students Go to College?” argues that too many people are getting bachelor’s degrees. It touches on some issues I discuss in my book about the pluses and minuses of various kinds of postsecondary education and training: Quick Education and Training Options Guide: Choose the Route That’s Right for You.

The heart of the article is a table (below) showing 20 occupations that normally require considerably less preparation than a college degree. For example, Parking Lot Attendants typically need only short-term on-the-job training to do the work. The table shows, for each occupation, the number and percentage of workers with a bachelor’s degree (or higher). (For convenience, I’ll refer to “a bachelor’s or higher” here as “a college degree.”)





The numbers are disturbing. For example, 14% of Parking Lot Attendants have a college degree. Among Bartenders, 16% do. The author of the article goes on to argue that our society is putting too many people through college, including many who should not be there.

I have many objections to the methodology and implications of the article. First, a certain number of artists and other aspirants to highly competitive fields will always be working in occupations for which they are overqualified. This is also true of recent immigrants, who lack English skills or recognized credentials, as one comment on the Web page noted.

Second, the table is based on figures from 2008, a period of great job loss. Many people, out of desperation, were taking jobs for which they were overqualified. I looked at older figures and found that the percentage of college grads in the same 20 occupations had increased by 3% from 2004 to 2008. I acknowledge that even the 2004 percentages were much too high. But this entire past decade has been an era of tepid job growth. In an economy with normal job growth, we won’t see this level of overqualification. And how are we going to get to a better economy without a good supply of highly skilled workers?

The figures in the article don’t necessarily demonstrate that a college degree is not worthwhile. At best, you may judge from the evidence that some college degrees are not worthwhile. Everyone has heard stories about liberal arts graduates who have trouble getting hired in a college-level job. It’s likely that many of these overqualified workers chose an academic specialization that holds little appeal for hiring managers. But, as someone who holds only liberal arts degrees, I maintain that many of the overqualified workers with the “wrong” degree simply aren’t savvy about how to position themselves for employment in fields for which they supposedly are not equipped. I’d argue that what we need is not fewer college grads, or even fewer college grads in the liberal arts, but rather more help with career development and job-hunting.

I can counter the figures in this article with a different set of figures, from a chart (below) maintained by the Department of Labor at a site called “Education Pays.” The chart shows that people with a bachelor’s degree had an unemployment rate of 5.2% in 2009, at a time when the overall rate was 7.9%. Certainly, some of these employed college grads were in overqualified situations, but overall their average weekly earnings were $1,025, compared to $626 for those with only high school. I have followed this chart for many years, and the advantages of the bachelor’s degree are actually growing. So college does seem to be preparing people for good jobs.




Now, let’s switch the perspective. Instead of looking at policy decisions about what’s good for society as a whole, let’s look at career decisions that individuals must make. This is the perspective from which I write my books.

Seen from this point of view, getting a college degree is often an excellent choice. (It’s certainly not the only excellent choice, as I make clear in the Quick Education and Training Options Guide.) One of the people who commented on the article said it very well:

“I work in human resources now for a public university, and I can tell you that college degrees are basically an arms race. No, you may not need a degree to perform the task at hand, but you’re competing against people who have degrees. If you don’t have one too, you’ll be at a disadvantage. Ditto raises and promotions, in which education level is a significant factor. This is true across multiple industries, not just higher ed employment.”

Improving Your Skills, Part 4: The Bachelor's Degree

In my book Quick Education and Training Options Guide: Choose the Career Entry Route That’s Right for You, coming out in October, I discuss various ways people can improve their skills through education and training. I cover many kinds of formal and informal training, including apprenticeship, military training, and self-instruction, among others.

Although I do not, by any means, single out the bachelor's degree as the best kind of preparation, I make a good case for it. I point out that a bachelor’s degree can provide you with many advantages in the job market. In fact, some jobs require it. For example, to become licensed as a professional engineer or a public school teacher, you generally need to have a bachelor’s degree from an approved program. In many other occupations, there is no legal requirement, but employers will not consider job candidates who do not have at least a bachelor’s degree, sometimes in a specific major. Accountants, foresters, and financial analysts are examples of careers where a specialized bachelor’s is expected. In still other careers, a bachelor’s is not required but preferred.

Then I give specific reasons why a bachelor’s degree is such a valuable credential:

• It gives you broad and deep knowledge of the field. A bachelor’s degree program has requirements that ensure that you will learn more than you could in a two-year program or from on-the-job experiences. It helps you understand theoretical issues that are the basis of problem-solving techniques and creative thinking.
  

• It gives you a foundation for further learning. Our economy is changing so rapidly that workers need to continue learning throughout their careers. Even if they do not pursue higher-level degrees that require the bachelor’s as a foundation, they will need to take courses or pursue informal learning to remain productive as their jobs evolve. But continuous learning requires skills that go beyond the immediate demands of the job—skills in critical thinking, writing, math, and research methods. That’s another reason why employers prefer bachelor’s degree holders over people who have taken courses related only to the entry-level job.

• It represents a commitment of time and energy. Four years is a long time to devote to any effort, and employers appreciate people who have made that commitment and have seen it through to completion.

• It gives you knowledge beyond your major. Students often wonder why bachelor’s degree programs include requirements for courses in departments outside their major--such as literature, philosophy, history, public speaking, political science, the arts, or science. A bachelor’s degree is meant to produce a well-rounded citizen, not a robotic worker. Employers believe that bachelor’s degree holders have a broad understanding of the society in which business is conducted. People with the degree have explored enough different subjects to be fully committed to their career specialization yet have the flexibility to adapt as their career undergoes change. For example, if your job should open to an international market--as happens so often these days--knowledge of geography, history, comparative religion, and foreign language can be very useful.

• On average, it leads to better-paying and more secure jobs. Bachelor's degree holders averaged $53,300 per year in earnings in 2009, an advantage of $26,692 over high school dropouts. Their unemployment rate was 5.2% in 2009, compared to 14.6% for high school dropouts. These advantages are actually growing over time.

• It enriches your life beyond your job. The same breadth of learning that will make you a better learner and a more flexible employee also will help you to appreciate all aspects of life. It will give you a context in which to get more out of experiences such as a nature walk, a conversation with a person much older than you, a movie, a visit to a foreign country, a political speech, or a news article about an emerging technology.

Measuring the Importance of Postsecondary Education

One of the purposes of my forthcoming book, 2011 Career Plan: The Best Moves Now for a Solid Future, is to exhort the reader to get additional education or training as preparation for a career move. I describe several routes to career entry, such as on-the-job training, postsecondary technical school, and college degrees. Although I mention the advantages and disadvantages of each skill-building route, I don’t point to any single route as best for all people. That would certainly be bad guidance. But the point is that some education or training beyond the high school diploma is vital. (I make the same point in another book, Quick Education and Training Options Guide, which is due out in October.)

This argument gains a lot of reinforcement from a fascinating research study from Georgetown University’s Center on Education and the Workforce: Help Wanted: Projections of Jobs and Education Requirements Through 2018. (You can get the PDF of the full report or the executive summary at http://cew.georgetown.edu/jobs2018/.)

The report, by Anthony P. Carnevale (full disclosure: he was a colleague of mine at Educational Testing Service), Nicole Smith, and Jeff Strohl, forecasts the demand for workers with various levels of education. The researchers show that the jobs (that is, paid positions, not occupations) normally requiring an associate degree or higher increase from 28% of the total mix in 1973 to 56% in 1992, 59% in 2007, and a projected 62% in 2018. Over the same interval, the fraction of jobs for people with only a high school diploma falls from 40% to 28%, and for high school dropouts from 32% to 10%.

They also show that postsecondary education is increasingly important for entering or staying in the middle class, which they define as the middle four deciles of household earnings. In 1970, 46% of high school dropouts and 60% of high school graduates were in the middle class. By 2007, these proportions had dropped to 33% and 45%. There was also some erosion among college grads, as people with the bachelor’s went from being 47% in the middle class to 38%. But the bachelor’s-holders were moving upward, not downward. The percentage of bachelor's-holders in the upper three deciles of household earnings increased from 37% to 48%. Similar changes can be seen in those with a graduate degree.

Looking at wage trends, they found that from 1983 to 2008, among prime-age workers between the ages of 25 and 54, earnings increased by 13% for high school grads compared to 15% for those with an associate degree, 34% with a bachelor’s, and 55% with a graduate degree. Over a lifetime, they estimated earnings (in current dollars) of $1,767,025 for high school grads, but almost double that ($3,380,060) for those with a bachelor’s.

The researchers point to the changing nature of our economy, only accelerated by the Great Recession, as the force that is increasing the demand for--and remuneration of--workers with postsecondary education.

They also make a related point: that our current postsecondary educational system will not produce enough workers to meet this demand. This idea goes beyond the purview of 2011 Career Plan and therefore doesn’t get a full discussion in this blog. Nevertheless, it’s a very important point, and I may return to it in a future blog.