Over the past month, the topic of how valuable a college education is has been extensively dissected by everyone from the San Fran Fed to Pew Research Center. The conclusion, contrary to what the Federal Reserve would like everyone to believe as Americans scramble to load up on hundreds of billions more in cheap student debt, is that a college education is certainly worthwhile... to those who can afford it outright without getting in debt. However, for those unlucky to have been born with a silver spoon, the reality is far bleaker and the conclusion is that a college graduate household, on average, tends to have a lower net worth around the age of 40, than non-college graduates without debt.
However, since a Keynesian economy can only operate as long as there is a net infusion of new debt, even if it is the lowest quality and least discretionary (if only in theory) debt - the kind used to pay for tuition - this nuance is largely ignored by statist apparatchiks who extoll the virtues of the opportunties presented by a college degree, ignoring the unpleasant reality of what it means to have record student debt in a time when the US economy is barely growing at a 2% rate, and when one needs a piece of paper with a college stamp on it to get a foot in the door for any job, let alone the best paying ones (in the process making tenured economist professors who perpetuate this status quo, even richer).
But only focusing on the big picture averages ignores something even more important: what fields of study do American concentrate on - because obviously the salary of a business grad is vastly different from that of a computer science specialist from that of a teacher, and thus - what are the most popular majors? And, just as importantly, what is the average salary by discipline?
For the first answer, we go to a NPR analysis which recently laid out the history of popularity of various majors over the past 4 decades. What it found was the the top 5 most popular majors for the most recently available class, that of 2011, is the following (as % of total grads):
- Business: 21.38%
- Health professions: 9.53%
- Psychology: 6.53%
- Education: 6.17%
- Art and performance: 5.58%
Here is the full breakdown (with a drill down after the jump):
NPR notes the following:
- The persistence of business. Business majors, which include accounting, marketing, operations and real estate, grew even more popular over the past several decades. One in 5 college grads now gets a degree in the field.
- The decline of the education major. The education degree saw a dramatic decline, falling from 21 percent of all graduates in 1970 to just 6 percent in 2011. Does this mean there's a huge shortage of teachers? Not necessarily — it just means that far fewer students who go on to be teachers actually graduate with an education degree. According to the Department of Education, as recently as 1999 roughly two-thirds of new teachers graduated with an undergraduate degree in education. By 2009, that figure fell to just half.
- The rise of health professions. Over the past decade, the health care sector added jobs month after month, even when jobs were disappearing elsewhere in the economy. And the field is projected to add lots more jobs in the coming decade. So it makes sense that the share of students majoring in health-related fields (like nursing, pre-med and physical therapy) rose sharply in the past decade. Roughly 1 in 10 college grads now gets a health-related degree.
That answers the first part: what do Americans study in college.
As for the second part, which majors pay the best wages, we go to the April 2014 edition of the National Association of Colleges and Employers (NACE). The details are as follows:
The reporting year for the college Class of 2014 begins with an overall average starting salary of $45,473. Although this salary is 1.2 percent higher than the April 2013 starting salary of $44,928 reported for the Class of 2013, the increase is considerably lower than the more than 5 percent increase predicted for graduates at that time. This means, starting salaries for the newest crop of college graduates appear to be leveling.
In examining the average salaries by discipline, similar evidence is revealed. The percent changes within each category for 2014 are notably lower than they were in April 2013, ranging from nearly flat for business degrees to less than a 4 percent increase in salaries for health sciences graduates. (See Figure 1.) In contrast, the first report for Class of 2013 graduates showed percent changes in the broad categories that ranged from nearly 2 percent to as high as almost 10 percent.
And in table and chart format:
The summary: is college uniformly bad (or good)? Absolutely not: the answer depends on one's initial financial situation, what one studies and majors in, and finally how one applies said knowledge. However, all else equal, is it wise to incur over $100,000 of debt for a humanities major paying a low $30,000 wage? Absolutely not.