A Degree from an Elite College is No Guarantee of Higher Wages

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*** Pity the working man. Last week, we pointed out that the average working stiff in America now earns less than his counterpart in France – $38,000 in the United States as compared to $41,000 in France. Presidential candidate Barack Obama says the masses in Pennsylvania are “bitter” about it.

Pennsylvania is an industrial state with plenty of unions. We remember visiting our Pennsylvania cousins in the ’50s. They worked in the steel mills south of Pittsburgh and enjoyed a lifestyle that seemed luxurious compared to our own. At the age of 10, it appeared to us that there was a lot more money in factory work in Pennsylvania than there was in the tobacco fields of Maryland.

But factory work peaked out in the late ’70s…says the New York Times, when an hourly manufacturing worker could expect a wage of $20 an hour (adjusted to ’07 dollars). Ever since, factory wages have been going down. So have hourly wages generally. Now, a factory worker cannot really expect to live a middle class life, reports the NYT, unless he brings home $41,600 (about $20 an hour). But fewer than 20% of them do.

*** Seeing the handwriting on the wall, people flooded the colleges and universities in the last half of the 20th century. If you got a degree, you wouldn’t have to work in the mills, threatened parents. You could go to work in the office – where it was air-conditioned and you got to flirt with the secretaries. But now comes news that even people with four years of college often do not earn enough for middle-class status. And worse – a study reported in the NYT says that even a degree from an elite college is no guarantee of higher wages.

Which raises a good question – why bother to pay for an expensive college…or even, why bother to go to college at all?

We raised the issue with Henry – our 17-year-old.

“What would I do if I didn’t go to college?” he answered. “And besides, if I want to be a doctor, I have to go to college. And if I do go to college and discover I don’t want to be a doctor, at least I’ll have the choice to not become a doctor. But if I don’t go to college I won’t have the choice to become a doctor.”

Good point.

But what about the people who have to scrimp and save to send their children to college? Student lenders are becoming tight, say the papers. And the old Bank of Home Equity has closed its doors.

Wherever they get the money, there will surely be some disappointments in the results. The New York Times mentions a couple whose boy wanted to go to a private college rather than the State U., because the private school had a “good pre-law program.” For that, the family was willing to pay an extra $80,000 – over the four-year program.

We don’t know what they think they got for their money. But we have a strong hunch it was – zero. We spent three years in law school. As far as we can tell, there is no such thing as “pre-law.” In the beginning it’s all reading, writing and thinking – which any education should prepare you for – then, you move on to advanced hoodwinking, contractual obfuscation and ambulance chasing.

“Do you deny the allegations?” the judge once asked The Kingfish in an episode of the ’50s TV show, ‘Amos & Andy.’

‘Not only does I deny the allegations,” replied The Kingfish. “I resents the alligator.”

Bill Bonner
The Daily Reckoning Australia

Bill Bonner

Bill Bonner

Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
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8 Comments on "A Degree from an Elite College is No Guarantee of Higher Wages"

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justin
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Of course having a degree from an elite college is no guarantee of higher wages, just like banknotes, the more of them that are around the less value they represent.

christina
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The best university to go to is the school of hard knocks. All the multimillionaires I know went there

christina
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The best way to learn is to find yourself a model and a mentor- someone who is already doing in the real world what you want to do. and doing it well. Then ask them to be your mentor.

Smack MacDougal
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The “Get a College Degree” scam from the Church of Academia has kept many High Priests living a plush lifestyle of big houses, conferences in Davos, secretaries and reading time.

Unless you need licensure — medicial doctor, lawyer, CPA, civil engineer, dentist, merchant marine, combat pilot, — there is little call for anyone to attend a University.

You must earn college degrees to gain a job as a lawyer, accountant, engineer, doctor, dentist, college professor or government bureaucrat.

Yet, college degrees amount to nothing more than rites of passage in the Church of Academia, which allows you to join its Priesthood.

Peter
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I agree with Smack. The vast number of uni degrees are simply union tickets. They open doors to jobs in private and public service that are not open unless you have one of the required type. How many businesses or government departments realistically believe that a freshly degreed person can walk in and start a job immediately. Many professions of course need and require tertiary study but many would suffice with trainee ships and quality in company training for current employees seeking a new career or advancement.

Pete
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How many degrees do you have Smack? Universities can actually teach things. Theories, reasoning, different approaches to situations. Some things are not easily or readily learned through experience alone. From an employment perspective, University study can benefit in two other ways: 1) A degree (not a fake one) is essentially a certificate that says you have attained a certain level of skills in a field. So when industries have a ‘skills’ shortage, what do you think they mean? It doesn’t necessarily mean lack of population willing to work. If we wanted an entire nation of skill-less dropouts then we’d have… Read more »
Smack MacDougal
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The Psychology of Web Posting proves fruitful for the study of men. You see the effects of indoctrination-induced deep psychosis in many whose fear drives them into enraged action. When these folks read words of truth that conflict with their indoctrinated false belief, cognitive dissonance takes over. See “Pete”, whipped into frenetic action when he demands “How many degrees do you have Smack?” Pete goes forth with a claim rooted in false beliefs — “From an employment perspective, [a] University degree … is … a certificate that says you have attained a certain level of skills in a field.” No.… Read more »
John
Guest

“You must earn college degrees to gain a job as a lawyer, accountant, engineer, medical doctor, dentist, college professor or government bureaucrat. This exists to limit supply of potential workers in said jobs.”

What?

Most of those occupations you listed require specific knowledge gained precisely in school, such as law or medicine. Do you want a lawyer representing you that doesn’t know the law, or a doctor treating you that never went to med school, because those pesky degrees “just exist to limit supply of potential workers”?!?

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