BY ANTON LUCANUS
It’s a question commonly asked by 20-something-year-old graduates: fresh out of college, knee-debt in debt, six months into the job hunt and already finding that without a Masters or PHD the chance of scoring a high paying job is fairly low, contrary to common belief.
Was the investment in tertiary education worth it?
Was it worth the time and effort invested in the application process? Was it worth the countless hours spent toiling over an argumentative essay for a subject never to be spoken of again? Was it worth the $30 grand in debt?
A mere 38 percent of college graduates think that yes, getting a higher education was worth the cost, according to 30,000 American graduates interviewed by Gallup-Purdue Index. And the numbers of students enrolling in tertiary institutions across the country are now beginning to reflect this uncertainty, after a boom in enrolments through the late 1900s which saw enrollment in degree-granting postsecondary institutions increase 23 percent between 1995 and 2005. According to the National Center for Education Statistics, enrollment has been declining since 2010–11. Enrollment peaked in 2010 at just over 21 million students but by the fall of 2014 there were 812,069 fewer students opting into getting a tertiary education.
Is it because students are becoming increasingly disillusioned by out-of-college employments prospects and the uncertain economic times we are living in?
The sheer magnitude of debt accrued by students today and the cost of gaining a tertiary education often deter people from pursuing higher education. Some prefer to simply enter into the workforce as unskilled laborers, baristas or low-level clerks straight out of school, enabling them to begin earning right away and avoiding the unnecessary burden of student debt.
In the United States, the average wage of workers with a bachelor’s degree has declined by a whopping 10 percent in the first part of this century, according to the Federal Reserve Bank of New York. Having a bachelor’s degree no longer guarantees an easy ride to the top of a professional firm, rather, it simply puts you a step above the less educated workers whose options are limited to clerical jobs, manual labor and hospitality roles. Since when was it required to speak several languages, hold multiple PHDs and have contacts in the industry in order to get a decent job? Many graduates are finding that their tertiary education provides very little value to them once they are out in the working world, forcing them to question whether it was all worth it.
Roughly one in three college graduates (34 percent) today work in jobs that do not require a degree, meaning that much of the college-educated workforce are not using their skills in the workplace, and the unemployment rate for recent college graduates has remained stuck around 9 percent for some time now. To add to this, fifteen years ago, 55 percent of underemployed college graduates earned more than $45,000 per year, but that figure has dropped to just 43 percent today. For even more recent college graduates, that figure fell from 47 percent to 34 percent. The outlook for new graduates is grim, to say the least.
But studies have consistently shown that investment in human capital pays off, every time. Economists have carefully studied labor market “returns” on education for close to fifty years now, and the findings have been remarkably consistent: typically graduates earn more than comparable non-graduates to equate to roughly a ten percent annual return on their initial investment in tertiary education. This is almost on par with the return on physical capital investments, and lowers the cost to society by lessening the dependency costs of graduate students.
We see the benefits of a tertiary education more than ever during an economic recession. During poor economic periods unemployment rates in general are usually terrible, but for those lacking higher education the situation is considerably worse. Take the most recent economic recession in the United States, for example. The average national unemployment rate was over nine percent, but for those with a bachelor’s degree that number dropped to around four percent. Having a degree provides people with a security blanket; leverage with which to play off against other, lesser qualified candidates. Education is also the only real way of breaking the cycle of generational poverty. In a family where all but one has no education beyond high school, it is likely that the person with a tertiary education will fare better in their lifetime than the others, professionally-speaking. Admittedly, it takes nothing but “gift of the gab” and confidence to network, establish relationships and develop entrepreneurial talent – but in order to be able to take advantage of expanding markets and burgeoning opportunities in the business world, one generally needs to have a tertiary level understanding of economics, business and marketing.
Let’s face it. Getting a degree won’t protect millennials from unemployment. One must consistently develop and nurture new skills in order to remain competitive and stay ahead of the pack. But a bachelor’s degree will certainly enable graduates to fare better than their less educated counterparts during times of economic sluggishness – that is for absolute certain.
Byline – Anton Lucanus is the Director of Neliti. During his college years, he maintained a perfect GPA, was published in a top cancer journal, and received many of his country’s most prestigious undergraduate scholarships. Anton writes for The College Puzzle as a means to share the lessons learnt throughout his degree and to guide current students to achieve personal and educational fulfilment during college life.