Do college degrees get you anywhere?

Do college degrees get you anywhere?

Summary: A lower return on investment for undergraduate degrees is manifesting itself in the forms of salary stagnation and underemployment.

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TOPICS: CXO, IT Employment
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Doesn't take you as far as it used to.
An article in the Wall Street Journal last week pointed to the declining value of your college degree, and they may indeed mean "yours" as the very first example given is of a woman who, after receiving a computer science degree from Maryland's Frostburg State University in 1986 and doing well for several years--peaking with an $89,000 salary as a data modeler for Sprint in Lawrence, Kansas--was laid off in 2002.

From there, things only got worse, with her spending six years in a "career wilderness" of temporary and low-end data processing jobs with a nadir in 2004 when Sprint called to fill a position that sounded remarkably like her former one--paying less than one-third of her old salary.

A degree, the underemployed techie tells the WSJ, "isn't any big guarantee of employment, it's a basic requirement, a step you have to take to even be considered for many professional jobs."

What the WSJ discusses has been documented elsewhere: degrees aren't worth what they once were, but they are still the price of admission to many fields. However, there are more factors coming into play than just a lower ROI on undergraduate degrees.

One piece is salary stagnation. The typical salary of a worker with a bachelor's degree, when adjusted for inflation, didn't rise between 2006 and 2007, and were below--by nearly two percent--their 2001 level, according to the Census Bureau.

But an even bigger piece, as pointed out by Greg Ip, the WSJ columnist, are the ways that globalization and technology innovation have changed the economy. Now more so than ever before, the highest-paying jobs are being landed with an elite group with a particular set of skills--skills that have little to do with a college degree. Those on the other side of the wage gap are finding themselves competing for jobs with employees outsourcing firms have brought in or temporary workers on H-1Bs.

Jay Vegso, manager of membership and information services for CRA (Computing Research Associaiton), a trade group for the computing industry, doesn't wholly agree. Though wages have been flat for the last few years, arguments that place the blame on offshoring and importing foreign labor are largely anecdotal, he notes, and will continue to be until more thorough research is out there.

"While offshoring and foreign workers play roles in what is going on with the IT workforce, I have not seen evidence that they have had a significant impact. It is even harder to prove that they are responsible for impacting the overall workforce and underemployment, which is very difficult to track," Vegso explained.

Research released in March by the NSF (National Science Foundation) noted that most people with undergraduate degrees in computer science were doing quite well. Recent graduates (2003, 2004 and 2005) with degrees in computer and information science, when compared to several other majors, were tied with health majors for the highest median salary at the undegraduate level--$45,000.

Topics: CXO, IT Employment

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  • Just another thought...

    In the sector of work I'm in, I think IT is losing it's "elite" status as a job. With basic IT skills being aquirable with just a few certifications it is becoming less elite and more like a tradeskill not unlike an electrician or auto mechanic. Unless you are capable of turning your programming into something innovative to earn megabucks, there really isn't any reason to expect extraordinary salaries for doing what some executives call simply "computer work."
    slowbox
    • Bullseye

      It may offend your ego, but the fact is, if a 16-year old can do it,
      it isn't that hard and doesn't merit a $70,000 a year salary.
      frgough
      • Narrowed focus?

        I'll assume you are referring to programming in newer languages. There's more to IT than just programming in newer languages. There are still a pile of older languages in use, not to mention the oodles and oodles of hardware that's still being used that a 16 year old would never have seen, let alone worked with or know how to repair/troubleshoot. And, the average 16 year old is more akin to the average 26 year old. They may have mad skills at computer games and IM's, but they're useless at the nuts and bolts of things.

        I'm sorry, but I'm going to have to call BS on your statement.
        Dr. John
  • Anecdotal does not equal false

    An easy way to dismiss information is to characterize it as "anecdotal". That does not make it any less true. Awhile back I was speaking with a woman from Iran who had been in the U.S. many years and worked as a programmer. She was complaining about ... foreign workers! She said her employer was basically employing young male Indian programmers who just program, eat and sleep. They were paid far less than their American counterparts and they worked 70 hours per week. No social life, etc. She was being told [b][i]she[/i][/b] was "not a team player" because she wanted to work [b][i]40[/i][/b] hours per week--"[b][i]I[/i][/b] have a [b][i]life[/i][/b]."

    Reality is that a lot of people both in and outside of tech are now telling up-and-coming students DON'T go into tech. It is in a decline that will only get worse. Yes, salaries are still relatively higher than many other fields. But "fair trade", "globalization", and similar terminology is being used as an excuse for exploiting foreign workers, both here and abroad, with low wages, and ultimately that will pull the rug out from under the people in the U.S. doing those jobs. One reason there is no "systematic data" is that many people leave such fields permanently and therefore are no longer counted.
    Rick_R
    • Anecdotal means unreliable

      In other words, there is no way to determine if the woman you
      spoke with was isolated or characteristic.

      So, yes, anecdotal does not equal false. Neither does it equal true.
      frgough
      • .....

        Actually his story is pretty dead balls on accurate of the market out there. I have a family and a life and 40 hours a week is all I want to work. The one corporation I did work for... briefly kept using the "your not a team player" line because I would question the logic of having people come in on weekends over a speculation. Or that I insisted on taking my full lunch hour and NEVER would work through it but would go work out and eat instead.

        Bottom line even though I met my deadlines (actually I beat them 60% of the time) had fewer reworks and got more done in my 40 hours than my fellow co-workers at 60+ hours, I was not a team player. And when my reviews came out I always scored well, and again even though I performed faster and more efficiently and accurately than my co-workers, the ones that put in the 60+ willingly always got the raises. I never understood why mediocrity was rewarded... kind of like Microsoft contracts I suppose.

        Anyhow my observation of people that work 60-70+ hours a week are generally unhealthy, unhappy and have a miserable family life... if they even have a family at all. They lack any social skills what so ever and what's the point? Really whats the point of laboring away so many years of ones life to still only hit below the quality level of what others with a healthier life style can produce in 40 hours a week. What kind of quality of life is that?

        The bottom line is clear and simple, computers and all this wonderful technology we have was SUPPOSED to make our jobs easier and reduce the need for working long hours (like our parents and grandparents did when things were done manually). And yet we "work" more but produce less and the bug counts are climbing. The number errors and design flaws are increasing that requires even more time to get something simple (or what should be in essence) to work, to work.

        There is no need really for an efficient business to work it's staff more than 40 hours a week. Not in todays world of technology. I think that instead of helping it's starting to have a reverse effect on productivity. And that's based on what I see day to day... ]:)
        Linux User 147560
    • The nature of the industry...

      If someone wants to work 40 hours a week, better get a job with government and start punching a clock somewhere. The leading edge of the IT industry has never worked like that.

      Look at everyone's darling Google -- you think they provide everything from babysitters to laundry service and free meals just for fun? No, they do it EXACTLY so that people never have a reason to go home.

      Google is also one of the biggest recruiters of offshore workers as well -- even to the point of setting up offshroe development centers.

      Most uninformed people think that foreigner workers are somehow 'exploited' and paid unfairly low wages -- but that argument is not based on any kind of truth whatsoever.

      In India, if someone makes $20 per hour, they can afford to have servants to wash their clothes, clean their homes and cook their meals. If that's exploitation -- where do I sign up?

      Globalization puts everybody on a level playing field in terms of salaries. The fact that it costs more to live in the USA than in India or China or the fact that Americans expect such a high standard of living compared to anyone else speaks more about unrealistic expectations rather than anything else.
      Marty R. Milette
  • Time to retrench!!

    "Those on the other side of the wage gap are finding themselves competing for jobs with employees outsourcing firms have brought in or temporary workers on H-1Bs."

    High time we all got back to buying American, and that includes American labor!
    Techboy_z
    • Retrenching...

      AMEN TO THAT! We need some economic patriotism in this country.... or we'll just turn into another Europe. What a waste!
      NorCalMike
      • Nonsense...

        There are several serious gaps in your logic.

        First, the US dollar has spiraled into the toilet against every other major currency in the world -- most notably, the Euro.

        In 2001 the Euro was worth 85 cents. Now, thanks to George W. Bush and his 'friends and family' program -- it takes over $1.56 to buy a Euro.

        Even with the limited mathematics skills they teach in US schools now, it doesn't take a rocket scientist to do the math on these numbers.

        Europe indeed... At least there will be less Americans there in the coming years -- they won't be able to afford to go there.

        Other major logic flaw -- NOBODY is going to "buy American" anything. Why would anyone pay twice as much as they need to for anything?

        Maybe you'd be happier if all the American companies who currently take advantage of more affordable workers to just go out of business and leave NOBODY with a job?

        Own any stocks? A lot of people have their entire retirement savings in stocks. So if the companies can't make a profit -- what happens to the savings of all those folks?

        Ranting and raving 'buy American' isn't going to solve anything. Globalization tends to level the playing field -- so naturally the people who have the most to lose are the ones most exploitive of the old way.
        Marty R. Milette
  • College degrees and certifications do not...

    provide you with what you need to be good at a job. ONLY experience in the real world can do that. There is such a huge divide between academia and the real world that it takes years in the real world to cross this divide. Education teaches you the mechanics, experience teaches you the skill to implement those mechanics.

    When it comes to IT, the best people I have come in contact with are self taught with 10 years or more experience. They learned it in the real world and they can apply it in the real world. They make IT work.
    bjbrock
    • .....

      I agree, Apprenticeship programs are far more valuable than a college degree any day. That's why I took the Naval Engineering Apprenticeship Program for stationary power plant operations. It gave me a journeyman license upon completion of 8,000 hours that were documented and certified by several overseeing authority's. That journeyman's license is going to pay off here soon... in that once we get our gas turbine co-gen plants built I will move in as lead operator (since I am a gas turbine experienced engineer for propulsion and electrical power generation and maintenance) at more than double the pay I make now. And that is because of my license, if I didn't have that license but an engineering degree... maybe a 1/3 more than what I am making now.

      Apprenticeship programs are as old as industry itself and actually older. So it's not like it's something new. ]:)
      Linux User 147560
      • Apprenticeship vs College Education

        Both paths to employment are valid and offer different opportunities.

        BUT - Please don't confuse a trades person's license with a Professional Engineer's license. In order to obtain a Professional Engineer (PE) license, one must complete at least 4 years of internship under the tutelage of an experienced PE after college. Very few are able to skip the college portion of the program and a much longer internship is required. After internship, one must apply for and pass the PE exam prior to being licensed. A PE license is required to sign and seal design work.

        I have a great deal of respect for those who choose tech college or apprenticeship programs - trades people turn my designs into reality. A few have been known to suggest improvements, which made their lives easier and did not affect the integrity of the design.

        They also make my office work. Some of the best IT personnel I've come across were those who trained as CAD drafters and took the IT courses also offered at the local Tech college. These individuals could not only put my designs on "paper", but could also wire the office network and trouble shoot the latest computer glitch. These individuals have also been trusted to research (and sometimes test) new hardware & software prior to purchase and implementation into the office environment.

        I own a small structural engineering office and can not afford to hire several single-tasking employees - especially when one multi-talented person will do. Flexibility and good phone skills are a plus.
        Lila M
    • College degrees or not

      I have been in IT for 20 years, have a 4 year law degree (practised law outside America for 2 years) and have a MBA. I am in IT and earn the same as my fellow employees with no degree or an associate degree.
      Money is NOT my motivation for studying. I like knowing things. I want to read an in-depth article on economics or law or business strategy or on hedge funds etc and understand what I am reading and discuss it with my friends. I do not think I am better or more intelligent than anyone else but I want to be able to form my own point of view. Too many people are 'intellectually lazy' and just follow the popular opinion of the day - like lemmings. Many people have nothing to talk about except everyday titbits of useless information that they picked out of equally useless magazines.
      I respect people who go to the trouble of bettering themselves through education because that is after all what education is all about. It shows an interest in life around you and perserverance - all excellent character traits. It is a humbling experience as well when you realize how little you know in the big scheme of things. I want my superiors to have a good education as there is so much more to a job than just knowing how to do it.
      Life is a journey and I want to experience it and understand the landmarks that I stop at and know the history behind the things I come across along the way.

      PS.
      Legal immigrants coming into this country are required to have a 3 or 4 year degree - there is a reason for that.
      catsloveme
  • The last paragraph missed the mark and other comments

    No one was contesting that IT graduates don't start off well. The issue that many IT professionals are encountering is that the ceiling on salary and wages seems to be falling quite rapidly, and this is exacerbated when taken in the context of productivity.

    Like many of the project failure related articles on ZDnet, managers have not improved their ability or willingness to set realistic project scheduels and timelines. Therefore there is a natural political bias to favor less expensive workers to increase heads (to complete those mythical man-months on the Project schedule) and /or to favor workers who are willing to work extremely long hours (Absolute quantity of work completed is often more easily understood and rewarded by non-technical managers than quality or productivity per hour)

    Now on the flip side, I think it is true that as we progress through the information age, "programming" and IT related jobs are slowly becoming commoditized. Programming today is often just Software Manufacturing (Although without adequate designs and specifications usually!) Just as the carpenters, metalworkers and other tradesmen were the backbone of the industrial revolution, programmers and IT workers are becoming the typical job for the information age and not subject to any special bonus in income that was accorded during the transational ramp-up from 1985-2001. I think this trend will continue over the next few decades to the point were the combined pressures on wages + inflation will result in most IT related jobs to drifting toward the average middle-class income.

    Sorry my mood has been so negative lately.

    J
    jmondanaro
    • More likely

      is that salaries are coming into line with abilities. As much as it
      may shatter your ego, if more than a few 16-year olds can do
      your job, your job ain't that hard.
      frgough
  • RE: Do college degrees get you anywhere?

    I got hired to do a job that I don;t have a degree for. I went to college for 2 years dropped out and now have a job that I could keep for a very long time. And, instead of me paying to learn how to do the job they are paying for all of my study materials.Once i finish my license tests I'll be making twice what I make now and more than I would have if I actually finished college and became a graphic designer, which i do on the side for decent money as well!

    I think the only degrees that matter at this point are the ones pertaining to medicine. Most companies from what I experienced in my job search care more about what you can actually prove do rather than if you have a piece of paper that says you do. That's not to say that all people with degrees don't know what they're doing. That's not what I'm saying at all. However I know several people personally who went to college for years and when the got out and it was time to find a job, they had no idea how to do that job.
    NamelessFor Now
  • Why Doesn't CRA Collect Data?

    The obvious question for Mr. Vegso is why CRA hasn't bothered collecting data on the impact of foreign workers and offshoring on opportunities for US workers? He's got access to some of the largest firms. Why doesn't he measure trends like offer-acceptance rates, salaries, benefits packages, signing bonuses, etc.

    Is the fact that IBM now has 75k workers in India, up from 6k in 2003, an "anecdote"? Is the fact that Accenture has more workers in India than the US an anecdote?

    Why doesn't CRA measure how much IT R&D is moving offshore? It has the ability and access. Does it have the will?

    Ron Hira
    Rochester Institute of Technology
    rhira
  • We'll find out soon

    This is a good article for me cause it hits home. I'm actually a highschool dropout that got a job at a mail order business. Over the past 8 years though I've been working my way up from basically being a person that stuffs and sends out envelopes to filling company needs such as setting up shipping accounts and negotiating discounts, to learning Photoshop and Illustrator to handle all our graphic design, and also creating 4 versions of our website. I've been given the opportunity to interview by phone with a large well known company. After looking over the skill requirements I feel 100% confident that I could handle the position. So we'll see when education comes up I can sell my skill and experience and have them forget about the schooling.
    ZenMasta
  • RE: Do college degrees get you anywhere?

    Of course a college degree doesn't guarantee you a job. Why should it? There are so many more factors that go into being a productive and useful contributor than what piece of paper you've got in your closet. If people find themselves unemployable for so many years they are probably in the wrong industry; but doesn't mean the industry is doomed.
    jeremy.huffman@...