Does going to college enable one to get a higher-paying job? This question is at the crux of a dilemma faced by many young adults, who must choose to either sacrifice time and money to attend college, or immediately enter the workforce. Although extensive research exists on this topic, and there are many diverging opinions, the purpose of this article is to put the facts on paper.
In economics, capital is defined as something used to yield production. While objects such as machinery and supplies are classified as physical capital, there is the additional abstract idea of human capital – comprised of educational and intellectual strengths. Education is delineated as human capital, because in order for one to educate and produce, they need to have been educated. Thus, in a theoretical sense, the more educated one is, the more valuable they are as a member of the workforce.
With the advent of hi-tech manufacturing and cheap overseas labor, educational attainment becomes that much more important. Many American businesses have outsourced unskilled labor jobs to emerging countries such as China, India, and Taiwan for the simple reason that American workers cost more money and labor regulations render profitability a herculean endeavor. This has been problematic for many Americans, especially those in the manufacturing sector, whose jobs have been shipped overseas. With the demand for skilled labor going up, and demanding large amounts of human capital, it is incumbent on young Americans to attend college, despite the drastic increase in costs and debts.
The renowned economist, N. Gregory Mankiw, provides data showing the difference in income between those who have attended college and those who immediately entered the workforce. With the need for unskilled labor decreasing and the need for skilled labor increasing, it is much more lucrative in the long run to attend college than to simply start working. While in 1980 an unskilled male laborer made $45,310, 44 percent less than a skilled male laborer with a $65,287 salary, this difference doubled in 2008, with unskilled laborers making $43,493 on average and college educated males making $81,000.
Similarly, in 1980, an unskilled female laborer made approximately $27,324 and skilled female laborers made 35 percent more money at $36,894. While women’s salaries did not increase as drastically as men’s, they still rose, with an unskilled female laborer making $31,666 – 71 percent less than a skilled laborer making $54,207.
When this math is simplified, the average salary of a college graduate in 1980 was only 29 percent higher than those who entered the workforce immediately following high school. In 2008, with the need for unskilled labor in the United States diminishing, there was a 45 percent salary difference between those who attended college and those who did not. Receiving a college education seems imperative for landing a lucrative job.
However, there are those who disagree and feel that college is an unnecessary hindrance towards entering the workforce. Prominent among them is author Charles Murray, whose theories are outlined in his controversial 2008 book Real Education: Four Simple Truths for Bringing America’s Schools Back to Reality. According to Murray, the model of a traditional four-year liberal arts college should be discarded for a system of competency tests. In doing so, students will have less restrictions on where they can be hired. One example, excerpted from a 2008 article corresponding to Real Education entitled “Down with the Four Year College Degree,” Murray presents the following:
“If I am an employer of accountants and am given the choice between an applicant with a mediocre CPA score but a BA in accounting and another who studied accounting on-line, has no degree, but does have a terrific CPA score, explain to me why should I be more attracted to the applicant with the BA?”
Deserving job candidates often do not receive enough credit for their immense intellectual and vocational talents because of some limitation on paper, such as where they went to school, or, in the case above, if they went to school altogether. If this example is an accurate portrayal of what occurs in the workforce (it somewhat resembles the storyline on the popular television show “Suits”), it would seemingly indicate that college attendance and intelligence do not correlate. According to Murray, the IQ level that rendered someone “prime college material” is 115, a level held by approximately 16 percent of the population. Considering that 28 percent of all adults have bachelors degrees, something is incorrect. Either students are getting smarter, or colleges’ standards have been lowered. Instead, Murray advocates for a system where students’ careers are determined by their performance on standardized career tests. This provocative theory essentially allows for the top 20 percent of society to live predetermined lives of great wealth and vocational success, while the rest of society hovers around a job market with a more menial core. This theory is almost comparable to intellectual eugenics; promoting an educational environment which, in the words of New York Times book critic Charles McGrath, resembles, “an Aldous Huxley world where our place in the pecking order is more or less predetermined.”
In order to find a balanced perspective on the economics of a college education, this article has provided sources and statistics which both advocate for the necessity of a college education as well as its shortcomings. On the one hand the data supplanted by N. Gregory Mankiw provides an obvious glimpse into why college is important from a numbers perspective. On the other hand, Murray’s theory, albeit controversial, raises tenable objections to the current system and how young adults spend their most formative years. Notwithstanding both views, as the famous verse in Isaiah 33:6 proclaims: “Wisdom and knowledge are the stability of the times.” Indeed, only strong education and intellect can keep society on a smooth road towards prosperity and growth.