Tuesday, June 19, 2012

What value that Degree?

An interesting article in the JWR today about undergraduate college degrees.  I'll state up front that I don't agree with all the points being made by the author (some logical fallacies present, among other things), but I do agree with other of his points.  Fodder for another posting, but please do read the article.



JS said...

Here's the takeaway that I got: a bachelor's degree is worthless if it's from a lousy school in a generic major that offers no immediate path to an actual job. Conversely, go to a good school and get a degree in something like engineering, finance, marketing, etc.

Degree inflation isn't the problem; useless degree inflation is.

The people who are having trouble are those who went to college with no direction. Those people are in even worse shape when they went to a lousy school on top of it all. I'm talking about those who drift through school aimlessly and take courses that sound interesting but teach no discernible skills. Those worst off of all are the ones who did this on student loans instead of Daddy Warbuck's checkbook.

Consumers of "degree products" need to be aware of what the likely ROI is going to be.

JS said...

I'll add that the calculus is VERY different in the frum world and I think that dramatically changes things.

If you're an adherent of a religion that requires you to make a VERY high salary (as a man) or fall on communal charity, the decision making process is very different. Similarly, if the expectation (as a woman) is that you're going to have kids right away and be a stay at home mom, the decision making process is very different.

A "mediocre" job may be one that doesn't pay 6 figures by the time you're 30. Heck, it may even be mediocre if you're not earning over $200k given local costs and expectations.

Similarly, one has to wonder if it's "worth it" for the myriad women who become stay at home moms to have gone to Stern or some other expensive private school. Maybe that money should be reallocated to a house down payment or kids' yeshiva payments.

By the way, I'm not advocating this kind of thinking, but if it's going to be the communal norm that women stay at home and men need to earn very large salaries, the bachelor's degree question needs to be thought about very differently.

Miami Al said...

The problem here is that there is an over-emphasis on first jobs. The "traditional" approach (there is no actual tradition of this, just what pre-WW2 rich did and the Baby Boomers did it) is High School -> College -> Graduate School, where you drop off is the degree you end up with.

We have credential inflation: online BA/MA degrees of questionable value, 5 year BA/MA programs that get you the Masters degree, etc.

In the engineering/science world, traditionally a MS was issued to a PhD student that didn't finish their thesis, or a industry engineer that came back for their MS later, hence the suggestion in the article that - most people with a Masters have some work experience.

Sure the Bartender/Server with a degree is working a job that doesn't require it, but when management positions open up, they'll have work experience plus the degree, and they'll have a shot at the job.

The easiest time to get a Masters is the fifth year program. When I was in school, the 5th year Masters was dismissed as "only $10k/year" and then "only on your first job." That might have been true, the first job it mattered, the second/third it doesn't, but 10 years out, the degree starts to matter again.

A MS Computer Programmer may get more money than a MS Computer Programmer in job 1, future jobs may reflect their network, but that VP of Software Development job may only be open to the MS Computer Programmer, and the BS Computer Programmer is going to need to go back and get an MS or a MBA to compete for those jobs, and at 32 and potentially married with children, that's a lot harder than having started their career at 33.

I think one of the biggest hidden costs of the "year in Israel" is this opportunity cost. It's NOT that they graduate college @ 23 vs. 22, it's that if you are going to stay in college until 23, you could have a 5th year Masters instead of a Bachelors, and be equally itching to go into the "real world."

The Bachelors shows a pretty good lifetime ROI, and for the Bartender in question, it might be better off to have done two years AA, then work through the BA for four years, so at 24 they have a BA + 4 years work experience, instead of a BA + 2 years work experience, but the management track all have BAs, so he needs to get it anyway.

It would have been far less disruptive of my life to have stayed one extra year for a Masters and been a serious student for years 4/5 than to go back a few years later for my Masters, but hindsight is 20/20.

AztecQueen2000 said...

The other factor is a down market. Once upon a time, the United States had a manufacturing sector that employed a lot of people. That has gone by the wayside as more jobs are offered in the service industries (the three largest private-sector employers in the United States are Wal-Mart, McDonalds, and Burger King). Because few people can live on the salaries paid to entry-level employees of these companies, a college degree has become a must.
Once the credential is the most important factor, the quality slips. (Remember when an eighth-grade education actually meant a degree of basic literacy? Unfortunately, there are high school graduates today who can't even write a sentence.) Because the Almighty Credential is considered a path to a future that does not involve cash registers or flipping burgers, more people are trying to get it by any means necessary.