Bohanon: Competition Aids Clients of Education
by Cecil Bohanon, Ph.D.
The president of Ivy Tech threw down the gauntlet: “A four year liberal-arts education is a poor investment for America’s middle-class.” He went on to suggest that a two-year degree provided a more secure path to a job. The provost of Ball State took up the challenge and responded, “The data is clear: A four-year degree is better than a two-year degree, which is better than a high-school degree,” and argued that a university degree prepares the student for a career, not just a job.
Oh, how things have changed in higher education. In my day, college marketing consisted of representatives visiting high schools and sending brochures to interested students. Today it has expanded to television campaigns, freeway billboards and event sponsorships. The genteel academy is sullied by competitive capitalism, and I say all power to it.
Prospective students of higher education, their parents and taxpayers should pay attention to these robust discussions and join in. They should ask questions and collect information. Decisions about whether, what and where to pursue a degree should be carefully considered.
Fortunately, increased competition generates more information on college choices.
All prospective college students and their families should examine the website Payscale.com/College-Salary-Report-2013. It provides an annually updated survey of actual earnings of graduates from four-year colleges from a number of perspectives, including academic major.
The data include the median salary of full-time workers with 10 years+ of work experience with an undergraduate degree in a specific discipline. It is restricted to those who have an undergraduate degree only and includes those who are working in a field outside their major — so the undergraduate theology major in a marketing job counts for the theology average. It excludes the self-employed. I find the data on the median earnings of the 130 various majors at mid-career fascinating.
First: There are enormous variations between the medians. The median mid-career petroleum engineer major makes $163K a year, while the median mid-career child and family studies major makes $37.7K — a differential of more than 4 to 1. This difference is larger than the difference between two-year and four-year degrees.
Second, the median is just that — a middle point; half the earners are above and half below the median. It is likely that the highest paid child and family studies major earns more than the least paid petroleum engineering major.
As there are 130 majors examined, it is convenient to divide the data into five groups of 26 from top earners to lowest earners. The top 26 majors yield the mid-career median earnings of $86.9-$163K. It is dominated by engineering degrees and includes my favorite major — economics — ($94.5K). Of the top 26 degrees, 24 require significant use of advanced mathematics. The bottom 26 majors yield mid-career median earnings of $37.7- $55.5K and only a few require much mathematics. This bottom tier includes theology ($50.7K), biblical studies ($51K) and music ($51.1K) as well as social work ($45.3K) and education ($55K).
The three middle tiers range from $55.6K to $86.7K with applied business and science majors in the upper ranges — finance ($85.4K) and biotechnology ($82.8K); liberal arts majors in the middle — philosophy ($72.6K), geography ($67.4 K) and English ($65.5); with the lower ranges including an eclectic group of majors such as sports management ($57.6 K), sociology ($56.7K) and theater ($55.6K).
A number of surprises, at least to me, emerge — film production ($76.7K) and telecommunications majors ($76.6) beat out organizational management ($58.4K) and health-care administration majors ($57.8K).
Are dollars earnings the end all and be all of college, major and career choice? Of course not, but they are clearly a factor to consider.
Cecil Bohanon, Ph.D., an adjunct scholar of the Indiana Policy Review Foundation, is a professor of economics at Ball State University.
(NEXT: The economic reasons for the wide variation in compensation for college graduates.)