“College is not for everybody”

A caller on NPR’s Talk of the Nation offered a very interesting story about whether a college degree is a sound investment.  Note the reflexive defense from Kathleen Shea Smith, a student counselor who advocates in her earlier comments on the program that “it’s worth the investment” to get that bachelor’s degree:

ABRAHAM: Yeah, well, I was just going to talk about – this is kind of from an individual standpoint, (unintelligible) rather than like a macro standpoint. But when I was being kind of briefed about college life when I was in high school, they had all kinds of – you know, speakers would come to us and talk to us about how to prepare for college.

And they would talk to us about our future, and they would always, you know, say something along the line about how college wasn’t for everyone. But then that’s about all they ever explore into it. And I had to work fulltime to go to college, and I went to college for about two-and-a-half years before I dropped out, and my wife also dropped out.

And we found out that college was – you know, we were doing poorly because we had to work fulltime. I was working more than 40 hours a week. My wife was working about 35 to 36. And as we moved along in our service industry careers, we found that, you know, there was nothing preventing us from giving ourselves the life that we wanted without going to college.

And I feel like that’s not a very well-represented viewpoint. I feel like I was never really told that that was something that I could do. And we’ve gotten actually to the point where my wife has moved on – this is in as little as six years from an entry-level position at a clothing retailer that she was able to advance to the point where I no longer have to work.

And we’re homeowners, and we have a young son, and we have a couple of dogs, and we live in the suburbs, and it’s all very, you know, American dreamy. And I work part-time just for extra money.

CONAN: Well, congratulations. I’m really glad it worked out for you.

ABRAHAM: Well, yeah, it did work out well for me, and I understand that, you know, these things are very, very, you know, individualistic, and it’s not really, you know, necessarily very relevant from a large standpoint because, you know, obviously, we have, you know, the future to think about. We can’t just tell everybody to go work at a clothing retailer all the time.

CONAN: No, I understand. But do you have kids?

ABRAHAM: I’m sorry. What was that?

CONAN: Do you have children?

ABRAHAM: Yeah. We have one child. He was just born, and that was actually the main reason why I stopped working because…

CONAN: To take care. Yeah.

ABRAHAM: Yeah. I’m a stay-at-home dad now. I’m only working part time, and it’s great. But what I, I guess, the gist of what I’m trying to say is that I was never told that, you know, entry-level, uneducated, you know, work was something that was viable, especially since we’re in a depressed area. All the factory jobs have left town. Those are kind of what the old guard jobs were.

CONAN: Sure. Yeah. Well, good luck. And are you planning to send your son or your daughter to college?

ABRAHAM: That’s up to him.

CONAN: OK. Thanks very much for the call, Abraham.

ABRAHAM: Thank you, sir.

CONAN: And, Kathleen Shea Smith, college is not for everybody.

SMITH: It may not be, and it sounds like it worked out really well for Abraham. And I think – but if we do, again, go back to the statistics and the results [around $1,025 weekly earnings with a bachelor’s versus $625 without], it’s just the numbers are really telling as far as the benefits of college. But again, it’s an individual decision, and I know that we don’t want to impose our views on other people, but I think that the numbers really do speak to the issue.

Abraham is making a very important observation here that cannot be so cavalierly shrugged off with a few simplistic stats.  Indeed, Abraham has already anticipated Ms. Smith’s response, having described how anyone interested in long-term financial independence is given the same sales pitch—i.e., that college is the answer, and the throwaway line that “college is not for everyone” is offered merely as an empty disclaimer, not to be taken seriously by anyone who can stomach the student loan debt and opportunity cost.

Thus, the college degree group’s numbers are skewed upwards by folks like Abraham and his wife but who did stick it out the four years—i.e., people who would have been good earners with or without the degree.  Charles Murray made this very point in Real Education:

But while it is true that the average person with a BA makes more than the average person without a BA, getting a BA is still going to be the wrong economic decision for many high-school graduates. Wages within occupations form a distribution. Young people with okay-but-not-great academic ability who are thinking about whether to go after a BA need to consider the competition they will face after they graduate. Let me put these calculations in terms of a specific example, a young man who has just graduated from high school and is trying to decide whether to become an electrician or go to college and major in business, hoping to become a white-collar manager. He is at the 70th percentile in linguistic ability and logical-mathematical ability—someone who shouldn’t go to college by my standards, but who can, in today’s world, easily find a college that will give him a degree. He is exactly average in interpersonal and intrapersonal ability. He is at the 95th percentile in the small-motor skills and spatial abilities that are helpful in being a good electrician.

He begins by looking up the average income of electricians and managers on the Bureau of Labor Statistics website, and finds that the mean annual income for electricians in 2005 was $45,630, only about half of the $88,450 mean for management occupations. It looks as if getting a BA will buy him a huge wage premium. Should he try to get the BA on economic grounds?

To make his decision correctly, our young man must start by throwing out the averages. He has the ability to become an excellent electrician and can reasonably expect to be near the top of the electricians’ income distribution. He does not have it in him to be an excellent manager, because he is only average in interpersonal and intrapersonal ability and only modestly above average in academic ability, all of which are important for becoming a good manager, while his competitors for those slots will include many who are high in all of those abilities. Realistically, he should be looking at the incomes toward the bottom of the distribution of managers. With that in mind, he goes back to the Bureau of Labor Statistics website and discovers that an electrician at the 90th percentile of electricians’ incomes made $70,480 in 2005, almost twice the income of a manager at the 10th percentile of managers’ incomes ($37,800). Even if our young man successfully completes college and gets a BA (which is far from certain), he is likely to make less money than if he becomes an electrician.

. . . .

What I have said of electricians is true throughout the American job market. The income for the top people in a wide variety of occupations that do not require a college degree is higher than the average income for many occupations that require a BA. Furthermore, the range and number of such jobs is expanding rapidly. The need for assembly-line workers in factories (one of the most boring jobs ever invented) is falling, but the demand for skilled technicians of every kind—in health care, information technology, transportation networks, and every other industry that relies on high-tech equipment—is expanding. The service sector includes many low-skill, low-paying jobs, but it also includes growing numbers of specialized jobs that pay well (for example, in health care and the entertainment and leisure industries). Construction offers an array of high-paying jobs for people who are good at what they do. It’s not just skilled labor in the standard construction trades that is in high demand. The increase in wealth in American society has increased the demand for all sorts of craftsmanship. . . . There has never been a time in history when people with skills not taught in college have been in so much demand at such high pay as today, nor a time when the range of such jobs has been so wide. In today’s America, finding a first-rate lawyer or physician is easy. Finding first-rate skilled labor is hard.

[N.B.  Murray’s analysis, published in August 2008, suggesting that finding any kind of employment is “easy” was almost certainly based on pre-recession circumstances.]

This is not meant to discourage education by any means.  Like Murray, I agree with John Stuart Mill’s sentiment that “Universities are not intended to teach the knowledge required to fit men for some special mode of gaining their livelihood. Their object is not to make skilful lawyers, or physicians, or engineers, but capable and cultivated human beings.”  However, when 90% of high school seniors expect to go to college and 70% expect to work in professional jobs, the trends of defeated expectations and crushing student debts are bound to continue.  Citing statistics about the average comparative incomes of college graduates versus non-graduates, without more, does a disservice to clear thinking on this issue.