The Declining Returns to College Education

A good financial return for a college education should not be assumed as it once was. Chances remain high that college will pay, but changes in tuition and labor markets are lowering the return and raising the risk it might not pay for all graduates. Higher and higher tuition, delays finding jobs and the course of study head a list of trouble spots to consider when making a college investment.

Tuition

All the states have one and usually two public universities that offer the best opportunity to measure tuition inflation. Private colleges tend to have higher tuition than public colleges, but they are more likely to offer discounts to attract good students away from the less expensive public colleges. Competition for good students means the posted tuition at private colleges may not be a good measure of actual tuition paid, or its rate of increase. Public colleges are less likely to discount tuition than private colleges, which makes them a better measure of tuition increases.

Compare the 2002 tuition for the two largest state universities in each of the fifty states with the tuition of 2013. Some like the University of Arizona have tuition increases at rates that range up to five times the rate of inflation. For example, if the 2002 tuition of $2,490 at the University of Arizona increased by the rate of inflation until 2013, it would be $3,224.80. Instead it is $10,391, an increase of 317.31 percent, which is an annual compounded increase of 13.87 percent when the general inflation rate was 2.38 percent in the same years. (1)

The high percentage increase at the University of Arizona results partly from its relatively low 2002 tuition. The lower 2002 tuition exaggerates the percentage increase over the period but I can find 31 state colleges out of the hundred that have higher tuition than the University of Arizona. Take the University of Vermont. If its 2002 tuition of $8,994 increased by the rate of inflation until 2013, it would be $11,648.13. Instead it is $15,718, an increase of 74.76 percent, which is a annual compounded percent increase of 5.21 percent, one of the lower rates of increase of tuition for the 100 colleges reviewed.

All of the hundred colleges mentioned above had tuition increases higher than the 2.38 percent increase in the Consumer Price Index. All but seven had increases at least twice the rate of inflation; forty-nine had tuition increases at least three times the rate of inflation.

Wages

Wage for jobs that need BA degree skills need to go up as fast as tuition to avoid lowering the rate of return on a college education. The Bureau of Labor Statistics (BLS) identifies occupations and careers that need BA degree skills. (2)

In 2013, the Bureau of Labor Statistics reported 169 occupations that require BA degree skills with a combined 20.5 million jobs. The total includes 93 occupations with 10 million jobs that had a median wage increase above the inflation rate of 2.38 percent from 2002 to 2013. The median increase of the median wage for the 93 occupations was 2.9 percent. There were 32 occupations with 6.8 million jobs that had a median wage increase less than the inflation rate. The median increase of the median wage for the 32 occupations was 2.0 percent.

The remaining 44 occupations of the 169 do not have corresponding median wage data for 2013 because some occupations were defined in broader categories in 2002. For example, a nurse in 2002 was broken into four occupations in 2013: Registered Nurse, Nurse Anesthetists, Nurse Midwives, and Nurse Practitioners. Hence wage data is not reported for both years for 44 occupations that have 3.7 million jobs.

In sum, only three of the hundred colleges reviewed had tuition increases less than 4 percent a year, while only seven occupations of the 125 with data had median wage increases as high as four percent, and four of the seven were management occupations. The combination of tuition and wage changes over time assures a general decline in the rate of return on a BA degree.

Measuring the Decline

A few calculations help measure the decline. Someone entering the University of Arizona in 2002 had to pay $2,490 for a year’s tuition. At the time student loan interest was set at 4.06 percent. Using the 4.06 interest rate the total four-year investment would be $11,012.82 assuming tuition is paid in the fall and compounded once a year. [Computations are courtesy of the Excel FV spreadsheet function. Entries for the $11,012.82 are FV(.0406/1, 4, -$2,409, 0 ,1). ]

Someone graduating at age 22 in 2006 has 44 years to work and earn a return on the investment. If the $11,012.82 was invested in stocks and bonds and earned a 4.06 percent return over the 44 years it would be $65,525.86. To have the equivalent $65,525.86 because of a better job requiring college degree skills, it will be necessary to earn an extra $44.64 a month for the same 44 years. [Excel entries for the $65,525.86 are FV(.0406/12, 528, 0, -$11,012.82 ,1) and so on.]

Any amount above $44.64 and the return is above 4.06 percent. If the amount was $100 a month for 44 years the return would be 10.9 percent, a return higher than most long term stock returns or student loans.

However, compare that to what happens to someone entering the University of Arizona in 2013 when a year’s tuition jumped to $10,391. In the time between 2002 and 2013 the interest on college student loans has gyrated from a low of 3.4 to a high of 6.8 percent, but it was set at 3.86 percent for the 2013-2014 academic year. Using a 3.86 interest rate the total four-year investment will be $45,732.76, again assuming tuition is paid in the fall and compounded once a year.

If the $45,732.76 was invested in stocks and bonds and earned a 3.86 percent return over 44 years, as above, it would be $249,258.16. To have the equivalent $249,258.16 because of a better job requiring college degree skills, it will be necessary to earn an extra $179.58 a month for 44 years, a little over four times $44.64.

Any amount above $179.58 and the return will be greater than 3.86 percent, but any amount below $179.58 and the return is lower. If the amount was $100 as it was above the return drops to a paltry .67 percent.

Risk

Rapidly rising tuition during a period of stagnant wages has not slowed the tied of graduates. The number of working age adults with BA degrees keeps growing because current graduates are more than double the graduates from the 1970’s who are reaching retirement age. BA degree graduates total 48.7 million from June 1971 until the end of the academic year in 2012. If the two years yet to be reported have at least the same number as 2012, as seems likely, then 52.3 million working age adults have BA degrees. (3)

Some of the 52.3 million with BA degrees went on to get master’s degrees, doctorates and professional degrees. Subtracting the graduate and professional degrees from the total still leaves 28.2 million working age adults with BA degrees to fill the 20.5 million jobs in 2013 that need BA degree skills.

The growing number of people with BA degree skills raises the risk of delay to find higher wage career employment. Compare what happens with 10 years of delay. If the tuition was invested in stocks and bonds and earned 3.86 percent for 10 more years it would grow to $67,235.10. If the $67,235.10 was invested in stocks and bonds and earned a 3.86 percent return over 34 years, it would also be $249,258.16 as above. To have the equivalent $249,258.16 because of a better job for 34 years, it will be necessary to earn an extra $295.21 a month, more than six times the $44.64 from above. An additional $100 a month would be a negative return that would not earn the initial investment.

The chances remain good that college will pay, but individual decisions matter more than ever. I can find 65 occupations in the Occupational Employment Survey requiring no more than high school skills with employment just over 11 million people that have a median wage greater than $50,000. I expect some of the people in those jobs have college degrees, but it is likely their tuition money would be earning a higher return in the stock market. Allow me to repeat, a good financial return for a college education should not be assumed.

Notes
1) Tuition data is from the College Board
2) Occupational Employment Survey, BLS
3) Degree data from the Center for Education Statistics, US Department of Education

The Choice of a Masters Degree

There were 693,025 MA degree graduates for the year ending June 2010, the last year of complete data. The MA is still relatively small compared to 1.6 million BA degree candidates but the MA degree has the highest growth rate of degrees including the AA, BA, and Ph.D. From 1990 to 2010 it was 3.87 percent a year compared to the average for all degrees at 2.78 percent.

Completing a master’s degree can be a smart choice, but it is a different choice than entering and completing a BA degree. There are general benefits for the BA degree for all degree programs, but much less so for a master’s degree. The benefit of a master’s degree tends to be specific and attach to a career, and typically after a career is underway.

Education may be the best example because elementary and secondary teachers can begin a career with a BA degree, but most school districts publish pay schedules with step increases that depend on years of experience and education. Finishing an MA degree moves teachers to a higher pay scale and makes it easy to compare financial benefits with tuition. A master’s degree typically opens up other positions in education administration, counseling, and curriculum development as well. These advantages help explain why more than 26.3 percent of the 693 thousand master’s degrees for 2010 are in education.

The Masters in Business Administration ranks second with 25.6 percent of 2010 master’s degrees, just behind education. The MBA degree will surpass education in the near future because MBA growth rates exceed the master’s in education by a wide margin. The average annual increase reached 7,013 for the five years from 2005-2010, the highest increase for major degree categories.

Many start a career with a BA in business or in professions like engineering, information systems, architecture and design but return for an MBA degree after getting some on-the-job experience. However, part of the growth in the MBA results from the growth of the business BA degree itself, which reached 358 thousand in 2010. With so many BA business candidates compared to new jobs, finishing an MBA has become a strategy for narrowing the field of job applicants in the corporate job market.

Allied health professions hold third place with 69 thousand master’s degrees, 10.0 percent of the master’s total. A master’s degree in any health profession assures benefits in a health care career but even more than most master’s degrees the benefits do not transfer to careers outside the health care industry.

Master’s degrees in advanced nursing specialties had over 20 thousand master’s degrees in 2010, more than any other health profession. Nursing does not require a master’s degree, but nursing has a long career ladder with nursing specialties to pursue with master’s training: maternal nurse, pediatric nurse, critical care nurse, geriatric nurse and quite a few more. Other popular master’s degrees in allied health are 5,687 MA degrees in public health, 5,293 in health care administration and management, 4,244 in occupational therapy, 2,437 in audiology, and 2,056 in speech pathology.

Combined counseling and social work have just under 50 thousand master’s degrees, equal to 6.7 percent of the 2010 total. A career in a counseling specialty like mental health, education or family counseling requires a master’s degree and state license, which makes the master’s an entry degree. There were almost 24 thousand master’s degrees in psychology including over 7 thousand in just the counseling psychology specialty. Mental health counseling offered as part of allied health programs have another 6 thousand degrees.

Counseling work overlaps some with social work, an area where there were more social work master’s degrees than BA degrees: 19.6 thousand master’s degrees, 14.6 thousand BA degrees. Social workers provide support and assistance obtaining aid more than therapy or counseling, which lets the states be more flexible about license and credentials, but those planning a career in social work should expect to finish a master’s degree.

The four degree fields mentioned so far, education, business, allied health, counseling and social work, account for just over 68 percent of the master’s degrees in 2010. For people with careers in these fields a master’s degree will almost certainly be a smart choice.

Not all of the remaining 32 percent of degrees are as obviously connected to a career. These include 45 thousand master’s degrees in area, ethnic and cultural studies, multidisciplinary science, philosophy, history, social science, and visual and performing arts. There are another 17 thousand MA’s in English language and literature, foreign languages and literatures, liberal arts and sciences, general studies and humanities.

The 85 thousand master’s degree in the sciences: biology, life science, natural science, chemistry, physics, and in the professions: architecture, engineering, information systems, need the basic knowledge implied by a BA degree to enter these programs. For example, someone pursuing a master’s degree in engineering probably already has a BA in engineering and some work experience, which suggests they know what an MA can do for them.

A few master’s degree programs are tailored to those switching careers. Library science had 85 BA degrees and 7,448 master’s degrees for 2010, which makes it ideal for people from many other careers to start another. Public administration with almost 36 thousand MA degrees and theology with almost 13 thousand MA degrees have more master’s degrees than BA degrees also suggesting people enter these programs from other careers and backgrounds.

In the last few years many have finished BA degrees only to be plagued by delays moving into career employment. Some decide “I might as well go on for a master’s degree now while I wait to start a career.” That has a high risk to be a bad choice. It is not only expensive and diverts time and energy away from a job search, the many specialties and sub-specialties in master’s programs make it less likely that degree skills will match job needs, or advance a career to come in the future. To make a master’s degree pay and advance a career the evidence suggests the best choice is a career first, and a master’s degree later.

The Chicago Teacher’s Strike

Growing opinion from outside of teaching expects teachers to produce a quality product measured by student test scores. The use of test scores in teacher evaluation was a primary contention for teachers in the Chicago teacher strike.

Manufactured products fail as a result of defective materials and workmanship and so the logic follows that students must fail from defective teaching and poor teachers. The solution reformers want will adjust teacher salary to be in proportion to their student’s test scores: a merit pay plan.

Close to 100 percent of career teachers understand that merit pay plans introduce personal competition into teaching which will detract and harm their efforts to collaborate and work together. Second grade teachers realize their students are last year’s first graders and next year’s third graders. Third grade teachers realize their students are last year’s second graders and so on. If they all work together and help each other, and the new teachers, then the skills and test scores of all students might rise as students go from teacher to teacher and grade to grade.

However, some test scores will always be higher than others. Merit pay proposals and plans that reward faculty based on the highest test scores are like sports competition where there is a winner and a loser, but no incentive to work together. Pay plans that help education and improve test scores will need to recognize that teachers do not work in isolation and should not be treated as if they do.

Low entry salaries for teachers help school systems conserve funds while new teachers decide if they will take the time and make the effort to learn teaching and become professionals. Many do not, but those who do find that salary schedules reward experience and evidence of continuing education. Close to a 100 percent of teachers support evaluations based on their education and their easily assessable effort to use and develop class material, and to work and collaborate with other teachers to improve student learning across all grades and classes. Those who stay under this system can expect to earn a middle class salary by the middle of their career and more if they complete a master’s degree.

Chicago Mayor Rahm Emanuel wants to change that and make forty percent of teacher evaluations based on test scores. In a massive school system like Chicago test scores will vary by attendance and drop out rates, parental involvement, family income and some by teacher skill and experience. Teachers know the forty percent of their evaluation based on test scores is high enough to threaten the economic status and professional standing as teachers. It also happens to be bad for education.

Jobs for PhD's

I continue to see articles describing the grim job market for those pursing and finishing PhDs. A recent article from the Washington Post from July 7, 2012 (“U.S. pushes for more scientists, but the jobs aren’t there”) describes a surplus of science doctorates looking for research positions. The article uses examples of four people: a new neuroscientist yet to find work, two chemists laid off from pharmacy research, and a geneticist who spent 7 years as a low paid post doctoral research apprentice before leaving research entirely. It makes sober reading, especially when the politicians still talk about a future with new jobs in “high tech.” However, the bigger picture of jobs for doctorates in all fields gets worse day by day.

The accelerating growth of new PhDs in all fields is the first source of job problems for new graduates. In the year ending June 2000, 44.8 thousand finished doctorates. The number increased every single year until 70.2 thousand finished degrees in the year ending June 2010. (1) The totals come from the National Center for Education Statistics at the U.S. Department of Education. In the years from June 2000 to June 2010, 599.1 thousand new PhD’s were added to the supply of existing PhD holders.

No one pursing a PhD can afford to ignore the college teaching market which has over 80 percent of the jobs certain to require a PhD. From the years 2000 to 2010 the Bureau of Labor Statistics reports college faculty increased from nearly 1.31 million to 1.46 million, or about 150 thousand new jobs. A job market with potentially 599.1 thousand new PhD’s looking for 150 thousand new jobs guarantees some very difficult job hunting. Retirements in any field can help generate job openings even if job growth is slow, except that tenured college faculty have a well earned reputation for retiring later rather than sooner.

Any American thinking of a PhD should remember that up to a third of science and engineering PhDs in selected years are foreign nationals, especially over the last 20 years. Many foreign nationals started careers in the United States but more and more they return home to start new companies and work in research and teaching in their native universities. Americans with doctorates need to accept that the job market for doctorates looks more and more like a global market.

Optimists and pessimists both know that some fields are better than others. Take chemistry, a field where chemistry faculty in postsecondary education increased from 16 thousand in 2000 to 21.1 thousand in 2010, or 5.1 thousand more faculty jobs. Nearly 2.5 thousand finished chemistry doctorates in 2010 alone with over 20 thousand new chemistry doctorates reported from 2000 to 2010.

As a science field, it helps that chemists have more opportunities outside of teaching than other fields in social sciences and literature. The chemical manufacturing industry, especially the pharmaceutical industry and also the plastics, rubber, paint, and fertilizer industries, hires chemists. Firms specializing in engineering services and firms doing basic research also employ chemists. The Bureau of Labor Statistics reports jobs for just over 80 thousand chemists and 27 thousand chemical engineers in 2011.

Some of the jobs for chemists in research and manufacturing need a PhD, but the credential itself is not as important in business and research the way it is for academia. Management decides which jobs can be done without PhD skills, which puts PhD holders in competition with a plentiful supply of chemistry baccalaureate and master degree holders. Worse, jobs for chemists and chemical engineers are both down since 2000. The decline is small but there are thousands of new BA, MA as well as PhD degrees in chemistry, and similarly in other fields.

The surplus of doctorates and their dominant employment as college faculty has generated a dual job market where established faculty with tenure operate separately from new PhD’s. New PhD’s might find post doctoral research in the sciences or adjunct positions with a course by course salary or a temporary appointment, but those positions go for expansion or to replace retiring faculty. Tenured faculty do not lose their jobs or accept lower salaries to hire and pay new faculty. The burden of the surplus falls entirely on new PhDs to accept low salaries for an indefinite period.

Dual markets and the risk of long delays working at low wages make it difficult to forecast a rate of return to funds invested in a Ph.D. Where people leave their chosen field for other work the return drops to zero, but long delays on top of four to seven years in a graduate program suggests minimal returns on a large investment of tuition, time and effort. Those thinking of a PhD should think carefully.

Note (1) The total excludes law, pharmacy, medicine (MD) and veterinary degrees.

College Degree Round UP

College Degree Round Up

Revised with the newest data July 20, 2017


American colleges and universities continue to turn out graduates, and in ever increasing numbers. In the year ending June 2015, the last year of complete data, the National Center for Education Statistics at the United States Department of Education reported 1,013,971 graduates receiving associates degrees, 1,894,934 receiving Baccalaureate degrees, 758,708 receiving master's degrees, 87,302 receiving doctoral degrees, and 91,245 receiving professional degrees. Professional degrees include medical, pharmacy, veterinary, and law. This year the total of first time professional degrees was down slightly, primarily due to a drop in law degrees.

In 1900 the decennial census counted that year's college graduates; 27,410 received Baccalaureate Degrees from degree granting colleges. After reaching 186,500 in 1940, BA degrees climbed to 432,048 in 1950 when WWII veterans began taking advantage of the GI Bill of Rights and entered college in large numbers. Earned degrees declined some later in the 1950's; but surpassed all earlier numbers by 1964. Earned baccalaureate degrees jumped to 792,316 in June of 1970; 900 thousand in 1973; 1 million in 1989. In June 2000, 1,237,875 earned Baccalaureate degrees from accredited degree granting colleges and universities. The total of 2015 degrees, associate, masters, doctorate, and first-time professional in addition to the 1,894,934 BA degrees mentioned above came to 3,846,130 for the year ending June 2015.


Growth Rates

The numbers receiving United State College degrees continue to grow at a 2.60 percent annual average rate over the last 25 years; more than double the growth rate for the adult population and more than double the growth rate of the civilian labor force. The rate applies to the total of degrees granted from U.S. colleges and universities: associate, baccalaureate, masters, doctorates and first professional degrees. In this way America is getting better educated with a better educated workforce.

Growth rates vary widely by sex and by level of degree. Women have higher growth rates in all degree levels going back to 1990. Women were 41 percent of BA degrees in 1970 but they make up 57.1 percent of the degrees in 2015 leaving 42.9 percent to men. In 2015, women graduates out numbered the men in associates, baccalaureate, masters, doctorate degrees and professional degrees. For the past twenty years the growth rate of women degree candidates in professions, primarily law and medicine, was 4 times that of men. Women will become the majority in the professions.

The master's degree has the highest annual growth rate at 3.30 percent starting from June 1990. The rate for women is 3.74 percent; for men 2.73 percent. Doctorate degrees are second with a growth rate of 3.24 percent a year, but the growth rate is the combination of a 1.95 percent for men and a 4.82 percent women. The 87,302 who received doctoral degrees is the highest ever. Women doctorates were just slightly over a thousand a year in 1960, but women passed men in 2007 and every year since with 47,173 in 2015.

The associate’s degree holds third place with an annual average growth rate of 3.02 percent. Not only is the growth rate higher for women but women had 617,358 degrees compared to only 396,613 for men. Baccalaureate degrees hold fourth place at an annual growth rate 2.22 percent. That means 800,396 more BA degrees in 2015 than 1990. Again growth rates for women are higher than men: 2.45 percent for women, 1.93 percent for men.

The slowest annual growth rates come in first professional degrees with an annual growth rate of only 1.20 percent. Medical Doctor, also known as the MD degree, has the lowest growth rate of professional degrees: .79 percent. Among other medical specialties podiatry and chiropractic medicine have negative growth, and optometry have low growth: 1.22 percent. Osteopathic medicine had 5,355 graduates and a growth rate of 5.34 percent since 1990. None of these other medical degrees are as important to the country as the MD degree where America's medical schools turned out just 18,302 graduates in 2015, 2,364 more than 1985-86. Veterinary medicine has higher growth than the MD degree, 1.31 percent, although lower numbers. Pharmacy degrees have the highest growth rate among first professional degrees. Pharmacy is the third leading first time professional degree with 14,304 thousand graduates in 2015 compared to 1,244 in 1990. Outside of medicine, law degrees continue to grow at a slow pace of .21 percent a year with 40,024 graduates in 2015, down from 43,772 in June 2014, but still 44.4 percent of professional degrees.


Degree Program Details 2015

The National Center for Education Statistics defines individual degree programs within a hierarchy of programs defined as part of its Classification of Instructional Programs, or CIP for short. Individual degrees are grouped as part of related degrees in a broader group of functional levels. For example, civil engineering is an instructional degree program within the broader functional level, engineering. Political science is an instructional degree program within the broader functional level, social science.

Associates degrees, were up slightly to 1,013,971 in 2015. The National Center for Education Statistics first started reporting associates degrees in June of 1966 when they were 111,607 graduates. They have increased with almost every year bigger than the last. Degrees in liberal arts and science, general studies and humanities continue to grow with 367,626 degrees in 2015, which was 36.3 percent of associates degrees and more than any other field of study. Health professions hold second place with 199,991; business degrees have third place with 113,630 degrees. Many with associate’s degrees go on to finish baccalaureate degrees but many associates degree have career oriented degrees that could be terminal degrees for entry level training. Personal and culinary services, criminal justice and corrections, mechanics and repairers are three degrees with 76,495 graduates in 2015 and specific entry skills to begin a career. Computer and information sciences and support services continued a fifth year of increase with 36,401 degrees, 79 percent men. The total remains below the 46.2 thousand degrees of 2003. Many of the technical programs in nursing, health, engineering and architecture provide entry skills, but also a beginning path to baccalaureate or advanced degree training.

Baccalaureate degrees were up to 1,894,934 for the year ending June 2015. The National Center for Education Statistics reports data for Baccalaureate instructional degree programs, also known as fields of study, or majors. Business baccalaureate programs had 366,799 degrees, the highest percentage of total BA degrees: 19.2 percent. Health care and related professions has second place in 2015 with 216,228 degrees and a 5 year average increase with 17,319 degrees, the highest increase of the broad BA degree fields of study. Social science degrees including history, political science, sociology, economics and history dropped in 2015 but still holds third place with 166,944 degrees, or 8.81 percent of BA degrees. Social Science degrees have a 5-year average decrease of 1,167 degrees.

No other field of study with BA degrees has as much as 7 percent of degrees. Psychology has 117,557 degree candidates at 6.20 percent of degrees. Biology and life sciences, and visual and performing arts have over 5 percent, and communications, journalism and related studies have 4.78 percent. Education has 91,623 graduates at 4.84 percent, primarily elementary education. Important degrees in computer and information sciences did increase from 50,962 in 2013 to 59,581 BA degrees in 2015. Computer and information sciences have a 5-year average increase of 3,998. Engineering did better with a 5-year average increase of 5,041 and 97,858 BA degrees in 2015, a 5.16 percent share. Several BA fields of study show a decline since 1990: English language and literature, social sciences and history, and liberal arts and sciences, general studies, and humanities have a negative five year average change.

Masters degrees were up for the second year to 758,708 in 2015. The National Center for Education Statistics reports master’s degree data, which tends to be concentrated in a few fields. Like the Baccalaureate degree the masters degree in business holds first place with 185,222 master’s degrees and 133,896 of the degrees in the single program, the MBA degree. Business has 24.4 percent of master’s degrees. Education master’s degrees hold second place with 146,561 education degrees. All masters degrees in educational specialties are 19.3 percent of master’s degrees for the year ending June 2015. However, education masters degrees have a 5-year average decrease of 7,116.

Education is a degree level where there are more master’s degrees than baccalaureate degrees. Library science, social work, and counseling also have more masters than baccalaureate degrees. Library science had 99 BA degrees; 5,259 masters degrees for 2015. In education for nearly all the public schools teachers that earn masters degree in educational specialties open career opportunities teaching in specialized programs and move to a higher pay scale. The master degree is often directly tied with career opportunity and advancement.

Health professions hold third place with 102,897 masters degrees, 13.6 percent of the total. The largest master’s degree training occurs in nursing with 15,349 MSN degrees compared to 121,810 at the BA degree level. Public health is next with 8,482 degrees and health care administration and management is third place with 8,152 degrees.

There were 46,114 masters degrees reported for engineering masters programs. Computer and information services specialties had 31,474 master’s degrees for 2015, up almost 6 thousand from 2014. It has a five year average increase of 2,704, a modest increase compared to excellent job prospects. Chemistry leads physical science degrees, but with only 2,309 degrees. Mathematics had 7,589 master’s degrees but both math and science are small compared to business, education and health professions masters degrees.

Doctoral degrees were up to 87,302 for the year ending June 2015. Annual growth rates continue to be very high with a five year average increase of 3,415 doctorates. Doctoral candidates are up every year for over a decade. The health professions had 19,782 doctorates or 19.4 percent of doctorates for the year. The total does not include the MD degree, which is a professional degree. Second place goes to education with 11,772 doctorates and 12.1 percent of the total. Engineering had 10,239 PhD’s, or 10.7 percent of doctorates. Biology and biomedical sciences 8,053 degrees, or 9.1 percent; physical sciences 5,823 degrees, or 6.3 percent of doctorates. The biological and physical sciences have a higher share of doctorates than they do for baccalaureate degree programs. Specialties in psychology in 27 programs totaled 6,583 doctorates. In the social sciences, economics, political science, sociology and history have the largest share of the 4,828 social science doctorates. Business has only 3,116 doctorates, mostly the DBA. English language and literature shows a decline since 1970, but small growth after 1990 with 1,056 doctorates in 1990 and 1,418 in 2015.

Percentage Distribution of All Degrees Granted for the Year Ending June 2012

1. Business, management, marketing - - - makes up 20.1% of all degrees
2. Social Sciences, and history, lib-arts, general-studies, multi-disciplinary - - - 10.8%
3. Health Professions - - - 12.4%
4. Education - - - makes up 9.1% of all degrees
5. Physical sciences, Biological and Biomedical sciences - - - 6.4%
6. Psychology - - - 5.5%
7. Engineering - - - 5.6%
8. Visual and performing arts - - - 4.2%
9. English language/literature/letters, Area & ethnic stud, Foreign languages - - - 3.3%
10. Communication, journalism, and related programs - - - 3.7%
11. Public administration and social service professions - - - 3.0%
12. Computer science - - - 3.4%
13. Homeland security, law enforcement, and firefighting - - - 2.7%
14. Parks, recreation, leisure and fitness studies - - - 2.1%
15. Natural resources and Agriculture - - - 1.6%
16. Philosophy and religious studies, Theology and Religious Vocations - - - 1.5%
17. Family and consumer sciences/human sciences - - - 1.0%
18. Mathematics and Statistics - - - 1.1%
19. Engineering technologies/technicians - - - .8%
20. Architecture - - - .6%
21. Law and Legal studies - - - .5%
22. Library science - - - .2%
23. Communications technologies/technicians and support services - - -.2%
24. Transportation and materials moving technologies - - -.2%

Job Training and Public Policy

Free traders, privatizers and devoted deregulators everywhere know job losses in manufacturing make up bad news, which is why they forecast new investment and expansion into sectors with higher productivity and more jobs for the future. They talk vaguely of new high tech jobs, always careful to mention computers and computer technology. They warn these new jobs take college degrees and so they advise, “Get some training.”

Holding out training and education as the path to better jobs shifts the responsibility for failure, or a menial job with low pay, on to the individual and away from business and government policy. Alan Greenspan, the former Federal Reserve Chairman, was very cleaver doing that. When he would testify on Capital Hill an inquiring committee member would ask why America has so many low paid jobs. He would answer people need to get some training so they are ready for today’s new high tech jobs. Today’s jobs require high skills, he would say. In other words, people could have better jobs if they would only take the initiative to get that training; Mr. Greenspan cannot be held to blame.

Committee members would usually stop their questions following his “Get some training” answer. After all making college pay depends on a financial return, which requires complicated calculations. The need for calculating compound interest gives the impression that investment returns are precise and use only one procedure. However, there are different procedures, even though the actual arithmetic is always precise.

Economists, for example, like to include time in college as time away from work. If time in college is time away from work then lost or foregone wages as well as tuition payments will be a cost of college and included in calculations. Those less devoted to the economist’s way might wonder why time in college is time away from work. Many go to college and work. The time in college might come from leisure or free time instead of work. The matter is in doubt and depends partly on preference.

Despite the need for choice in computing educational returns a common procedure compares interest adjusted wage differences over time with interest adjusted tuition and fees over the same time. The process requires interest calculations because money paid for college tuition and expenses could be used to buy stocks and bonds or other interest earning assets. Tuition and expenses amounts to an investment in a higher paying job, even though college students may want to go to college for other reasons. Millions of America’s jobs like cashier need only general workforce skills whereas jobs needing college degree skills like nurse, accountant or teacher earn a higher wage that allows estimating a financial return for the wage difference.

Another method converts college tuition and expenses into an estimate of the minimum salary increase that will make college a paying investment. Suppose in-state tuition at public college is $8,000 per year each year for four years. In some states like North Carolina, the state tuition is reported as $7,008, while in others like Michigan it is $12,634. Some are above, some below $8,000, but we let $8,000 be a representative tuition for 2010. In the first year $8,000 invested in stocks and bonds would earn interest or dividends. Similarly in the second year, except $16,000 would be invested and the second year earns interest or dividends on $16,000. At the end of four years at the time of graduation the principal invested and the interest earned is a total amount, which will equal $36,307.77 at 5 percent interest. Our thanks for the $36,307.77 total go to the built in spreadsheet functions on MS Excel.

Borrowing the tuition does not change the calculation unless interest rates differ between borrowing and investing. To have the college investment pay, a higher income stream from a higher paying job must be equal to, or greater than, monthly earnings on $36,307.77. If we presume the same 5 percent interest rate, then borrowing only changes $36,307.77 of equity investment into $36,307.77 of debt. Either way the college investment amount is $36,307.77 after four years.

The principal amount of $36,307.77 earning 5 percent interest over the next 10 years and compounding monthly will be equal to $59,799.24. Start at graduation and $384.97 of extra income each month over the next 10 years using 5 percent interest will be $59,799.02. The $384.97 equals the minimum extra monthly earnings necessary to pay for a college education at an interest rate of 5 percent. A lower interest rate will lower the amount of necessary earnings; higher interest rate will raise the amount. Using a 2,080 hour year means $4,619.64 a year of extra wage and salary makes college a paying investment. Experiment yourself. Use the Excel help file under FV, which stands for future value. The spreadsheet entries above are =FV(.05/12,120,0,- 36,307.77,1) and =FV(.05/12,120,-384.97,0,0).

Remember that graduation from college for the many who attend college right after high school implies entry into the labor force at age 22. The social security retirement age is 67 years. Congress and the country are expecting 45 years of work. Forty-five years of work means that all the BA graduates since 1965 to the present have not reached retirement age. The total comes to 47.2 million. (1)

The education and skills training necessary to fill America’s occupations varies widely but the Bureau of Labor Statistics developed a skills classification to reflect the current education and training needed for jobs reported within its occupational categories. The BLS categories include occupations that typically require college degree training: baccalaureate degree, masters, doctorate, and professional degree. The term required has a broad use because in some occupations the degree is absolutely necessary to be considered, where in other occupations a college degree is not strictly required but the skills needed for entry are such that candidates without a degree are much less likely to be considered, much less employed.

In 2010, 27.5 million jobs in the U.S. economy needed a BA degree or above for jobs reported from Bureau of Labor Statistics occupational data using the Bureau of Labor Statistics skills classification. Because those with professional, doctorate or masters degree usually have a baccalaureate degree before starting a graduate program, the 47.2 million eligible BA degree holders reported by the National Center for Educational Statistics can be directly compared to 27.5 million jobs that need a BA degree or above. The difference suggests plenty of qualified candidates for America’s jobs that need college degree skills, or conversely that many people with college degrees take jobs that do not need college degree skills.

Making college pay is a financial matter, not a matter of degrees, job title or status. People with college degrees take jobs that do not need college degree skills, but college will pay as long as those with a college degree earn more than a high school graduate in the same job. If college does not pay, it would be necessary to have a college graduate in a high school job and earning no more than high school graduates.

In the present circumstance of jobs, tuition and interest rates, “Get some training” remains good advice, but only for individuals. What works for individuals does not make a public policy applied to the larger society. The number in the labor force with BA degrees keeps going up because new BA degree graduates now exceed 1.5 million a year which is nearly triple the graduates from 45 years ago who are leaving the labor force. More are already attending and finishing college, but jobs needing college degree skills remain stuck under 28 million and continue to be 19 to 22 percent of employment reported in the occupational employment survey.

There is no increase in Americans attending college that will relieve America from low wage jobs and unemployment. Increasing the supply of well trained job applicants does not create the demand to employ them, nor assure them a higher wage to make that training pay. Politicians who want you to “Get some training” give you good personal advice for now, but they are really changing the subject.

Note (1) National Center for Education Statistics, U.S. Dept. of Education

Returns to Education

Returns to a College Education

"Seven years of college down the drain."
-John Blutarsky

Mr. Blutarsky, as many will remember, offered the conclusion above to his Delta house frat brothers following their especially memorable meeting with Dean Wormer. The statement is correct. Anyone who attends college for seven years only to be expelled without a degree, and with Mr. Blutarsky's zero point zero GPA will not earn any return on their college investment. Otherwise though, expect college to pay.

Occasionally in the popular press there will be an article discussing the trials and troubles of college graduates in the market place. Someone's promising son with a BA degree in management science cannot find a job and after hundreds and hundreds of unsuccessful applications he takes a job with a gutter cleaning company. He cleans gutters. A quotation from the hang wringing parents usually includes "Our college investment was a waste. It's not like it was in the good old days."

Let’s not be too sure. Remember that graduation from college for the many who attend college right after high school implies entry into the labor force at age 22. The social security retirement age is 67 years. Congress and the country are expecting 45 years of work. One bad year does not assure ruination and a life hanging on the eves. If we can presume that a management science degree means a person with some skills and curiosity, it is quite possible that advancement to gutter crew supervisor and then perhaps gutter manager is in the future. Maybe college skills give him the ability to start a gutter cleaning firm and then a gutter cleaning franchise. Millions earned as a franchise tycoon could be the future, it is hard to tell because figuring an accurate investment return for 45 years requires knowledge of interest rates, inflation and future salaries. Past trends give some ability to know these things, but the key components can only be estimated over such a long period of time. It is better to focus on the near term, which usually gives the correct answer anyway.

There are several ways to estimate returns on investments in education, or other types of investments for that matter. The need for calculations of compound interest gives the impression that investment returns are precise and use only one procedure. However, there are different procedures, even though the actual arithmetic is always precise. Economists, for example, like to include the time in college as time away from work. If time in college is time away from work then lost or foregone wages as well as tuition payments will be a cost of college and included in calculations. Those less devoted to the economist’s way might wonder why time in college is time away from work. Many go to college and work. The time in college might come from leisure or free time instead of work. The matter is in doubt and depends partly on preference.

Despite the need for choice in computing educational return a few comparisons can give meaning and substance to the great American cry "Get some training." High school degree or GED skills are general workforce skills. Millions of America’s jobs need only on the job training and general workforce skills. If we look at wages for some of the jobs with general workforce skills and compare them to other positions requiring college degree skills we can make some easy comparisons.
Suppose a brokerage clerk earns the median wage reported for brokerage clerks, but wants to go to college to become a personal financial advisor. The median wage reported for brokerage clerks is $36,390; the median wage for personal financial advisors is $66,120. If the difference of annual income is more than a year of college tuition, expect college to pay.

Suppose a bookkeeper earns the median wage reported for bookkeepers, but wants to go to college and become an accountant. The median wage for bookkeeping is $30,560; the median wage for accountants and auditors is $54,630.
Suppose a teaching assistant earns the median wage reported for teaching assistants but wants to go to college to become a certified teacher. Teaching assistants earn a median salary of $20,740; certified public and private school teachers have a median wage of $45,000 to $47,000.

Check wages between civil engineers and civil engineering assistants, or architects and architectural and civil drafters, or physical therapists and physical therapists aides and so on. For the many jobs where annual wages jump more than a year’s tuition, compound interest calculations are not important.

Rather than comparing reported wages it is possible to convert college tuition and expenses into an estimate of a minimum wage or minimum salary increase that will make college a paying investment. The process requires interest calculations because money paid for college tuition and expenses could be used to buy stocks and bonds or other interest earning assets. Tuition and expenses amounts to an investment in a higher paying job, even though college students may want to go to college for other reasons.

Suppose in-state tuition at public college is $6,000 per year each year for four years. In some states like North Carolina, the state tuition is reported as $3,886, while in others like Michigan it is $7,115. Some are above, some below $6,000, but we let $6,000 be a representative tuition for 2007. In the first year $6,000 invested in stocks and bonds would earn interest or dividends. Similarly in the second year, except $12,000 would be invested and the second year earns interest or dividends on $12,000. At the end of four years at the time of graduation the principal invested and the interest earned is a total amount, which will equal $27,230.82 at 5 percent interest. Our thanks for the $27,230.82 total goes to the built in spreadsheet functions on MS Excel.

Suppose instead it is necessary to borrow the $6,000 each year to pay tuition. Not every one has $6,000 a year to invest in anything, much less a college education. Borrowing the money does not change the calculation unless interest rates differ between borrowing and investing. To have the college investment pay, a higher income stream from a higher paying job must be equal to, or greater than, monthly earnings on $27,230.82. If we presume the same 5 percent interest rate, then borrowing only changes $27,230.82 of equity investment into $27,230.82 of debt. Either way the college investment amount is $27,230.82 after four years.

The principal amount of $27,230.82 earning 5 percent interest over the next 10 years and compounding monthly will be equal to $44,849.42. Start at graduation and $288.82 of extra income each month over the next 10 years using 5 percent interest will also be the same $44,848.63. The $288.82 equals the minimum extra monthly earnings necessary to pay for a college education at an interest rate of 5 percent. A lower interest rate will lower the amount of necessary earnings; higher interest rate will raise the amount. Using a forty-hour week and 160 hours a month it is less than $2.00 an hour of extra wage and salary that pays for college. Experiment yourself. Use the Excel help file under FV, which stands for future value. The spreadsheet entries above are =FV(.05/12,120,0,-27230.82,1) and =FV(.05/12,120,-288.82,0,0).

The $288.82 a month could go up or down depending on a number of variables and there is some additional risk using debt to pay for college. There is a difference of risk between debt and equity financing college because there can be a delay in getting a better job. Delays leading to missed loan payments mean unpaid interest added to principal, making it quite possible to be overwhelmed with rising payments. This could be true even though a delay may not make the investment unprofitable over the long term.

Bad timing could ruin an otherwise paying investment, but even long delays getting a better job or periods of no additional earnings will probably not eliminate the financial advantage of a college degree. Maybe our management science major above waits 10 years to get a job with a raise. After 10 years he has nothing to compare against the $44,849.42 mentioned above. But suppose he lands the right job and makes extra income for the next twenty years. The $44,849.42 at 5 percent interest will be $121,660.74 after twenty more years, but extra earnings of just $295.98 a month for those same twenty years will equal $121,657.75. Any amount of additional earnings over $295.98 a month at 5 percent interest over those twenty years and college pays.

Suppose interest rates go from 5 to 10 percent in the example above where tuition was $6,000 per year. The same $6,000 per year for four years goes up to $30,975.84 from $27,230.82. The higher principal will increase much faster at 10 percent over the next 10 years and compounding monthly will be equal to $83,852.88 instead of $44,849.42. The minimum monthly wage and salary increase necessary to pay for college tuition at 10 percent over the next 10 years jumps to $409.34 per month instead of $288.82. Higher interest rates make college a less attractive investment, but millions of jobs open up to college graduates that will cover a salary increase of $409.34 a month for 10 years.

In the present circumstance of education, jobs and interest rates, the extra monthly earnings necessary to pay for college is low enough to expect college to pay. It is not a guarantee, but comparing current graduation with job growth and job openings further suggests that college graduates will earn at least the minimum salary increase to make college pay.

Baccalaureate degrees were 1.4 million for the year ending June 2005 with degrees up every year since 1994 when the baccalaureate total was 1.1 million. The Bureau of the Census, Current Population Survey reports educational attainment for adults over age 25. Those employed with a BA degree or higher are up and although the increase has been fluctuating in recent years, the increase averages 1 million to 1.1 million a year in the years leading up to 2007.

The Current Population Survey counts people employed and not specifically their jobs. It does not tell us if the increase of people with new degrees also find jobs using college degree skills, only that they are finding jobs. Other surveys of the Bureau of Labor Statistics count jobs and occupations for establishments. Establishment jobs ended the calendar year 2005 with 2.3 million more jobs than 2004, but we should expect new graduates to be looking for new jobs using their college degree skills. There is help in counting the jobs using college degree skills because the Bureau of Labor Statistics publishes a skills taxonomy that gives a clear assessment of the jobs that need college degree skills, along with those that do not. In 2004, establishment jobs with a Bureau of Labor Statistics skills classification needing a BA degree, masters, doctorate, or professional degree came to 26.4 million. The number of college degree jobs increased an average of 950 thousand for the years from 2004 to 2006, when the new total is 28.3 million.

If you are paying close attention, you noticed new degrees outnumber new jobs using college degree skills, but chances for a new job improve the more current job holders leave the workforce to retire or for other reason. People who retire need to be replaced before there can be growth. Replacing people in addition to job growth is defined by the Bureau of Labor Statistics as job openings. Openings in any occupation that has job growth will be greater than job growth. If jobs are declining, openings will be limited to replacement jobs, but otherwise openings are greater than job growth. Openings for jobs using college degree skills are forecast by BLS to increase at 1.2 million a year through 2016.

Even though college graduates are increasing faster than jobs and openings in the Bureau of Labor Statistics college degree categories, the difference is modest. However, it is not necessary to have a job using college degree skills to make college pay. Moving from a job as bookkeeper to an accountant with a college degree makes it easy to establish cause and effect for higher pay and a college degree. That is important because making college pay depends on a higher wage because of a college degree. Often it is easy to establish cause and effect like the bookkeeper who becomes an accountant, but not always.

Sometimes people with college degrees take jobs that do not need college degree skills. Employers might prefer people with college degrees even though they might be over qualified for the work. They might pay someone with a college degree more than a high school graduate in the same job. Cause and effect is hard to establish, but it would be necessary to have a college graduate in a high school job and earning no more than high school graduates if college does not pay. Making college pay is a financial matter, not a matter of job title or status. As of 2007, the financial evidence is clear enough to predict college will pay.

Education and Skill Categories

Free traders, privatizers and devoted deregulators everywhere know job losses in manufacturing make up bad news, which is why they forecast new investment and expansion into sectors with higher productivity and more jobs for the future. They talk vaguely of new high tech jobs, always careful to mention computers and computer technology. They warn these new jobs require technical knowledge or college degrees and so they advise, “Get some training.”

Holding out training and education as the path to better jobs shifts the responsibility for failure, or a menial job with low pay, on to the individual and away from business and government policy. Alan Greenspan, the former Federal Reserve Chairman, was very clever doing that. When he would testify on Capital Hill an inquiring committee member would ask why America has so many low paid jobs. He would answer people need to prepare themselves for today’s new high tech economy. Today’s jobs require high skills, he would say. In other words, people could have better jobs if they would take the initiative to get that training, which means Mr. Greenspan cannot be held to blame for those low paid jobs. Committee members would usually stop their questions following his “Get some training” answer. I cannot recall any time when anyone asked him to provide a count of these high tech jobs, or some data, to go with his optimistic answer. It is time to make a count.

Over the years the inquiring minds at the Bureau of Labor Statistics started to wonder what skills and what training go with what jobs? They decided it was an important topic because they assigned many of their staff to study skill levels for the more than 700 United States standard occupations. They interviewed employers and employees to find out what someone has to know and do to qualify for employment in each occupation. They went to colleges and universities to learn about the curriculum for degree training. They studied state regulations to know licensing or certification requirements.

Categorizing education and skills training for occupations is on going work, but the BLS skills taxonomy reflects the current education and training associated with data reported within its occupational categories. This taxonomy appears in the Table below. The first six BLS categories give the minimum of formal college degree education that is required for entry and work in an occupation.

List – BLS Educational Training and Skills Categories
1. First Professional Degree-Entry into a job in this skill category requires 2 to 4 years of degree study beyond a baccalaureate degree. Almost all professionals must pass state licensing exams or private board certification exams to enter practice. Physicians, veterinarians, dentists, lawyers, pharmacists are all examples. Ministers are generally included here although there is not ordinarily board or state certification.

2. Doctorate Degree-Entry into a job in this skill category requires a doctorate following completion of a baccalaureate degree as minimum education for entry. College teaching at four year colleges is an example. A doctorate is also required for many science and medical research positions. Many require licenses and board exams. Medical and biological researchers, physicists, and astronomers are other examples because employment is mostly in research and these require doctorates.

3. Master's Degree-Entry into a job in this skill category typically requires license, certification, credentials or registry in a specialized skill area that requires work beyond a BA degree, leading to a master's degree. Health care professions such as physical therapists, speech-language audiology or pathology, counseling are examples. Librarians are now also included.

4. Master's or Bachelor's degree combined with previous experience-Entry into a job in this skill category requires formal education, but these jobs are usually not accessible without experienced practice in the field at an entry job. Health Services managers usually have experience working in health care in addition to degrees and credentials. Some businesses now require work experience and an MBA before jobs are accessible for entry. Almost all of these jobs have manager in the SOC title.

5. Bachelor's Degree-Entry into a job in this skill category requires a BA or BS degree. In some cases a BA degree in any field is satisfactory to establish reading and computational skills necessary to begin a job. Other jobs need a BA in a particular major to establish skills, credentials or obtain a license.

6. Associate Degree-Entry into a job in this skill category usually requires some formal education such as an educational internship, or co-op program, but leading to an associate's degree. Some employers require graduation from an accredited two year community or junior college program in order to take required licensing exams. Health technician occupations are examples. Some skill types have professional associations with certification or accreditation to help establish skill levels for job entrants. Dental hygienists, licensed practical nursing are examples.

7. Post-secondary vocational training-Entry into a job in this skill category requires pre-employment skill training and often a license from a state agency. Barbers, hairstylists, office machine repairers, computer repair specialists and technicians are examples. Employers may provide some on-the-training but entrants must arrive with the skills and certification to do their job.

8. Work Experience in a Related Occupation-Entry into these jobs usually requires that applicants show a high level of skills. These skills can be acquired through degree training, but long term practice, and specialized talents acquired as part of a career in the field are necessary. It is a separate category because degrees and training do not assure entry into these occupations. First line supervisors, police detectives and investigators, adult education instructors are examples.

9. Long-term on the Job Training-Entry into a job in this skill category typically requires skills acquired from work experience that takes longer than one year. The additional skills needed for the job are taught on the job, through an apprenticeship or employer sponsored classroom instruction or training, and the skills required take a long time or a lot of effort to learn with training of over a year. Actors, athletes, dancers, electricians, carpenters and mechanics are examples. Entry into these jobs are not open to those leaving a degree program or skills training. Prior job relevant skills are necessary for advancement into these positions. For many of these positions a high school degree maybe sufficient but entry is not available to high school graduates. Entry skills are high school plus on the job skills and experience.

10. Moderate-term on the job Training-Entry into these jobs usually requires basic reading and language skills learned in high school or a GED program, but additional on-the-job training is usually necessary. Additional skills can be learned quickly, but 1 to 12 months can be needed to acquire additional skills. Medical assistants, dental assistants, social and human resource assistants are examples.

11. Short-term on the job Training-Entry into these jobs usually requires basic reading and language skills learned in high school or a GED program. Work that can be learned from written or verbal instructions, or carried out successfully after a demonstration are classified as high school skills. Additional skills can be learned quickly, typically a month or less of on-the-job experience or instruction. High school degree skills can also be thought of as general skills employment.

The term required has a broad use. In some occupations the degree is absolutely necessary and a candidate will not be considered without the required degree. These include occupations where licensing is required by the state or by a private association empowered by the state. Registered nurses must have at least an associate's degree from an approved nursing program to be able to take required state exams. Without this credential entry is blocked.

In other occupations, a college degree is not strictly required but the skills needed before entry are such that a degree is strongly preferred by employers and candidates without a degree are much less likely to be considered, much less employed. Categories emphasize the sources and length of training preferred by employers. Training might be post-secondary vocational, college, postgraduate or professional education. The duration of training could range from a week or two to many years.

Prior experience and on the job training are part of the skills taxonomy. Category four is work experience plus a bachelor's or higher degree, an MBA degree for example. Someone with an MBA in finance will probably be expected to have employment experience before being considered for a managerial position. The bachelor degree plus work experience skill category amounts to a managerial skill category. Add up all management jobs at all establishments across the whole economy, and be sure to include management analysts, business agents and managers of artists, performers and athletes, producers and directors of artists, performers and musicians, judges and magistrates and the total comes to 97 percent of jobs requiring a bachelor degree plus work experience in the skills taxonomy.

The people at BLS who study jobs and skills and maintain the skills taxonomy appear to have a general consensus that managers should have work experience before they become managers. They nearly agree that a BA degree is required. I say nearly because a few managerial types – lodging manager, gaming manager, food service manager – fall in skill category 8, which is work experience in related occupation. A BA degree is not considered necessary for management in these industries.

Categories eight and nine describe skills learned through long-term on-the-job training, or work experience in a similar or related occupation. These jobs do not require a degree beyond high school, but are generally not entry-level jobs. For example, a first line supervisor of retail sales workers, or a supervisor of construction workers will need experience in retail sales or construction to be eligible for a job as a supervisor. These jobs require long term on the job training, meaning more than 12 months of experience. Therefore, entry level skills are a high school degree plus skills learned in another job or lower level job.

Categories 10 and 11 are moderate term and short-term on-the-job training. Moderate term on the job training is classified as skills which take 1 to 12 months to learn on the job while short term on the job training is classified as skills which take up to 1 month, but might be less. Moderate term and short term on the job training skills can be classified as general workforce employment. Therefore, entry-level skills into these occupations are a high school degree.

In the government’s Standard Occupational Classifications professional employment is separate from managerial employment. A civil engineer does professional work in a professional career but a manager of civil engineers has managerial employment and not professional employment, at least if we use the terms and definitions applied at BLS.

Despite the official terminology, we have to expect civil engineers who are managers of civil engineers will think of themselves as professionals. Suppose we asked a civil engineer working as a manager of civil engineers, “What is your profession?” He or she would be likely to say they are engineers rather than managers. If we ask the same person, “What is your job?” they would be likely say they are managers of a department of civil engineers. Their profession is engineer; their job is manager.

Lots of managerial jobs are filled with people moving up from professional jobs. Not always and American does have career managers, but moving up from below is an important way to enter the management ranks. The more managers promoted from the professions, the more professional openings there will be for entry positions in the professions: engineering, architecture, law and so on. As graduates from America’s colleges enter the workforce they will want to find jobs using their degree skills. If all or most of those with professional skills and experience stay in their jobs until retirement it would be harder than it already is for new college graduates in the professions to start a career. Openings come sooner when older professionals move into management ranks.

Almost all of America’s jobs that use college degree skills are in the professions or management. If we total all of the jobs where a four year college degree or master’s, doctorate or professional degree are required in the BLS skills taxonomy, the total comes to 25.3 million, which is 19.4 percent of the May 2005 Occupational Employment Survey total of over 130 million jobs. If we subtract all the managerial jobs that require college degree skills so that we have non-managerial jobs needing college degrees the total is 20 million, which is 15.4 percent of the May 2005 Occupational Employment Survey total.

Suppose we add up jobs for a list of professions. Take a list with teachers, professors, lawyers, engineers, architects including landscape architects, doctors including physicians and surgeons, dentists, pharmacists, and optometrists. Lets not forget accountants and auditors jobs that need CPA’s and all the professional counseling and social work jobs that require master’s degrees. Add all the professional computer jobs that require BA or higher degree skills. These are software engineer and hardware engineer, database manager jobs and a few others. All of these together total 12.5 million jobs. The total is a count of jobs, not people. Lawyers working as managers or politicians, or retired are not counted in the total of lawyers, just lawyers working at jobs that require lawyer skills. Neither is it a count of all the people who can rightfully call themselves engineers or architects because they have an engineering or architect degree. It includes only engineering jobs that require the skills of an engineer or architect.

The teaching and education professions have the largest number of U.S. professional jobs requiring college degree training. Add just the professional staffs, and total college professors, primary and secondary public, private and parochial school teachers, nearly 390 thousand educational administrators, more than 200 thousand counselors and 90 thousand school librarians. The total comes to 6.2 million. No industry or profession has anything close to the number of professional jobs in education, but the 6.2 million is out of over 130 million jobs.

Get some training makes terrific advice for you, your brother and your uncle Dwight. At current rates of college enrollment, college degrees will pay. Just hope that not too many of the 20 million working in jobs with 90th percentile annual wages less than $30,000 get the same idea. It might not be good either if large numbers of the 16 million working as cashiers, security guards, fast food cooks, servers, waiters, waitresses, dishwashers, janitors, maids, landscapers, grounds keepers, child care workers, tellers, receptionists, and parking lot attendants decide to up grade their skills along with you. Get some training. Now you know.

College Tuition

College Tuition

Every fall U.S. News and World Report does its annual review of America's Colleges. Their regular listing of information about America's colleges includes current tuition and fees. This and other college guides are excellent sources of tuition information but college guides are publishing what is really the sticker price. Your tuition could be quite different; it depends on your opportunities for bargaining.

When it comes to tuition the most important schools to watch are the state's flagship public universites. In Virginia, that is the University of Virginia; in Michigan it is the University of Michigan; in California it is UC Berkeley. Each state has at least one well respected state supported university. Every state's best students apply to these schools even though they are likely to apply to other colleges, both public and private. At the University of Virginia, 2006-2007 full time tuition for undergraduate students is $7,845.00. It is well below private colleges, and that includes private colleges with and without UVA's reputation of academic excellence.

Private schools must have higher tuition than UVA to meet their budgets, but they are at a disadvantage to get the best student's when they can decide to attend UVA at much lower tuition. To attract the kinds of students that can attend UVA, private colleges are often willing to offer discounted tuition to these students. Applicants who apply to private colleges are now routinely asked to list other colleges where they have applied. For the high gpa student it is an excellent idea to answer that question and include their state's flagship university. Private colleges want some students with the highest grades to keep up their reputation, which makes it likely they will offer a combination of options that sound like scholarships or grants, but amounts to a tuition cut. If they want someone enough, their package offer will reduce tuition to roughly the same amount as the best public colleges. They still accept other students with good academic records, but they do not offer much in the way of discounts for those with a 3 or 3.25 grade point average and without a number of AP courses.

The reality of competition for students in today's college market makes the flagship state colleges especially important in determining yearly tuition changes for all of America's colleges and Universities. For the renowned private colleges - Harvard, Yale, Princeton - they have enough applicants with the highest academic records that they can do whatever they want in offering tuition discounts. For the many fine private colleges without national name recognition there are not enough of the academic high achievers to go around and they literally have to compete for the best students. Because these colleges will try to match tuition at UVA for Virginia students, higher tuition at UVA and similar state universities allows private colleges to increase their tuition and decrease their discounts.

The importance of the flagship college shows up in a comparison of tuition for UVA and the College of William and Mary compared to the other state colleges in Virginia. The University of Virginia and the College of William and Mary are always toward the top of state tuition ranges. Both of these colleges have tuition above $7,000 a year in 2006. The State Council of Higher Education for Virginia website lists William and Mary tuition at $8,490, but the Univerity of Mary Washington tuition is $6,084 and George Mason University is listed at $6,408. The other state colleges keep their tuition below UVA and William and Mary by $1,000 and maybe a little more. All the Virginia colleges employ faculty from the same pool of available Ph.D's,and it is unfair to conclude that one of Virginia's colleges really offers better courses or classes than another, but the public perception is that UVA and William and Mary are the academic allstars of Virginia Colleges. For the other state colleges to have a chance to get some of the best applicants, which they certainly do, they need to offer tuition a little less than the flagship colleges. This means that tuition increases at UVA and William and Mary give room for tuition increases at the other state colleges, but still allows for the continued tuition difference of $1,000 or a little more.

In sum, Tuition changes at the University of Virginia and other flagship state universities is a signal of tuition changes for all of America's colleges.