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Global Economy Bursting?

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Many With New College Degree Find the Job Market Humbling

http://www.nytimes.com/2011/05/19/business/economy/19grads.html

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Now evidence is emerging that the damage wrought by the sour economy is more widespread than just a few careers led astray or postponed. Even for college graduates — the people who were most protected from the slings and arrows of recession — the outlook is rather bleak.

Employment rates for new college graduates have fallen sharply in the last two years, as have starting salaries for those who can find work. What’s more, only half of the jobs landed by these new graduates even require a college degree, reviving debates about whether higher education is “worth it” after all.

Meanwhile, college graduates are having trouble paying off student loan debt, which is at a median of $20,000 for graduates of classes 2006 to 2010.
 
Yes, times are tough, but the relative position of college graduates is still far superior to those with just a high school diploma and off the charts compared to high school dropouts. Even in today's economy the demand in some fields is outstripping supply. Chemical Engineers from India don't just get hired because they will work for less. There simply are not enough qualified graduates in the US. A BA in Psychology won't get you a high paying job, but that was true forty years ago too.
 
The skyrocketing costs of college, and the value in return is becoming harder for many of these institutions, particularly the pricey private institutions to justify.

When you look at what has allowed the costs to increase over the past several decades far and above the rate of inflation, you begin to realize the further folly of socialist policy.

The graph below is based on the cost of private institutions alone. These costs would not be able to rise at such a rate if the tuition were paid without the 'funny money' of grants, scholarships and giganormous student loans. Were Joe and Mary paying for young Joe Jr.'s college out of pocket (and let's be real, Joe Jr's part time job while we're at it), these costs would not be tolerated in the market.

Further, the salaries are not keeping up and this escalation appears to have exceeded the value of the tuition.

The y axis represents the dollar cost, with the basis being the 1991 dollar.

p32_26302_image001.gif


How's that community college sounding right about now?
 
Couch Potato said:
Yes, times are tough, but the relative position of college graduates is still far superior to those with just a high school diploma and off the charts compared to high school dropouts. Even in today's economy the demand in some fields is outstripping supply. Chemical Engineers from India don't just get hired because they will work for less. There simply are not enough qualified graduates in the US. A BA in Psychology won't get you a high paying job, but that was true forty years ago too.
Click to expand...

I guess you have missed the thrust of what has happened and is happening to education versus the job market. Many college graduates have worthless degrees that do not qualify them for many jobs that require a degree.

The point of the PIMCO article is a student can no longer assume that a four year degree will be the golden ticket to a good job today or going forward in the future. The degree has to be oriented to the job skills required.

As Caterina post #963 illustrates in the graph, college education costs are rising faster than incomes produced having a college education. Looking at the NYT article on recent college graduates and their median incomes for jobs requiring a degree of $26,756, the BLS data shows a retail sales person is making $25,000 with out a degree.

The NYT article also points out, the graduating class of 2010, just 56% had held at least one job by this spring, when the survey was conducted. That compares with 90% of graduates from the classes of 2006 and 2007. An analysis by The New York Times of Labor Department data about college graduates aged 25 to 34 found that the number of these workers were employed in food service, restaurants and bars and is a waste of a college degree. It also means that with out additional education that can qualify them for higher paying jobs, their career is doomed to a much lower trajectory level of pay.

Your point is that these degreed people displaced high school drop outs and high school graduates in the job market. But I don't believe that is a favorable argument to make to say that any college degree gives that person employment preference in retail or other sectors that don't require a degree. Really, 56% employment for the 2010 college graduates is nothing to brag about.
 
I visited my doctor yesterday to get the results of blood work and while waiting I read an interesting article. It was about a new nursing program. It struck home because my daughter graduated from UVA in 1998 in chemistry and has worked as a drug rep for the last 13 years and two years ago she went to the community college to their new associate in nursing program. She graduated last month and passed her state board to become an RN last weekend. Two of my nieces have a BS in nursing while my daughter has a BS in chemistry and an ASB in nursing.
The crux of the story is that learning nursing skills in a college academic environment come into conflict. Nurses need critical analytical skills not a bunch of academic crap. They didn’t come out and say that but that is what it implies. Colleges don’t teach critical thinking skills. My daughter told me the state board was nothing from the text book, it was all critical nursing questions about how to size up a patient or group of patients to set priorities and diagnose what is going on as opposed to listing the five stages of germ development or listing the bones of the body. The new nursing program with the associate degree with take kids with a BS degree into the program instead of giving a BS degree in nursing.
In summary, this confirms what I have always known-a college degree is a good background as an entry level into something. A college degree is not an end in itself, it is a path to an end. With a dead socialist economy the paths lead nowhere. I majored in economics but was never taught that, I figured it out for myself long after I left college.
 
Click on the link to see an interactive graph and table on jobs by industry, jobs by state an changes over time.

http://public.tableausoftware.com/shared/G5RST9GBM

Healthcare is the biggest growth industry. If college graduates want a job and career, a degree in the sciences will be the ticket.

A degree in gay, lesbian & transgender studies qualifies you to compete with high school drop outs.
 
In summary, this confirms what I have always known-a college degree is a good background as an entry level into something. A college degree is not an end in itself, it is a path to an end. With a dead socialist economy the paths lead nowhere. I majored in economics but was never taught that, I figured it out for myself long after I left college.
Click to expand...
Well sure.... and what else is new?
Bachelor's Degree = Startup / Apprentice
Master's Degree = You might know something after focused study / Journeyman
Piled Higher & Deeper = Knowledgeable / Master Plumber-Carpenter-Etc.

However, what I want to know is the total difference in lifetime earnings, instead of those points showing cost for college education -v- income.
It's been a tenet in my family for many years that (shorthand) knowledge is power.
Personally, I see the current push away from a good general education (not Major in Basket Weaving and/or Gender Studies) is a push to further dumb-down the population.
Sure it's hard to believe it can go any further, but then there's France...

.
 
Wait until you read this:

What's a Degree Really Worth?

http://online.wsj.com/article/SB10001424052748703822404575019082819966538.html

In recent years, the nonprofit College Board touted the difference in lifetime earnings of college grads over high-school graduates at $800,000, a widely circulated figure.

Dr. Schneider estimated the actual lifetime-earnings advantage for college graduates is a mere $279,893 in a report he wrote last year. He included tuition payments and discounted earning streams, putting them into present value. He also used actual salary data for graduates 10 years after they completed their degrees to measure incomes. Even among graduates of top-tier institutions, the earnings came in well below the million-dollar mark, he says.

The $800,000 number, it turns out, was pulled from a footnote of the College Board's 2007 "Education Pays" report that explained lifetime earnings. The report's author, Sandy Baum—an emeritus Skidmore College economics professor who didn't write the promotional text on the Web site—says that $450,000 is actually a more reasonable estimate of the difference in lifetime earnings, something she's said in interviews for more than a year.
 
How much is a college degree worth?

http://www.dba-oracle.com/t_how_much_college_degree_worth.htm

High school graduates can expect, on average, to earn about $1.2 million dollars in lifetime income, while those with a bachelor's degree earn an average of $2.1 million over a 40 year working lifetime. In sum, a college degree is worth a million dollars of extra cash, but it's amortized over a 40 year period, and we must account for inflation and the time value of money. At the same time, the cost of a state college for four years is about $100k.

To compare apples-to-apples, we need to convert these costs and rewards into today's dollars, figured on graduation day. Note that the million dollars in increased earning power is the same as about $400k today:

NPV college costs = $150k
NPV income gain = $400k

So, what's a Bachelors degree worth? It's about a quarter of a million dollars, not too shabby.

Lifetime income increase depends heavily on your college major, with this hierarchy (expressed in net present value dollars). It's interesting that college students fall down this hierarchy using the Peter Principle, changing majors until they find one that they master:

attachment.php


Note that engineers earn 4x as much as Education majors, followed closely by computer science and business administration.
 
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