A few weeks ago there was an editorial on the Op-ed page of our paper by a man who was head of his own company and had been named “Entrepreneur of the Year” at some point. He apparently has been very successful in the business world. All without benefit of a college education. He mentions several other successful and rich businessmen including Bill Gates, Steve Jobs, Mark Zuckerberg, and Peter Thiel who have been very successful and wealthy without benefit of a college degree. Peter Thiel had written a column a few weeks before that was slightly more balanced. However, neither obviously think that a college education is necessary for financial success. Thiel suggested that it might make a difference what one studied in college. More recently there was an article in the paper with some data on the unemployment rate of people with college educations (BA degrees) and those without. The data show that the unemployment rate since the start of the great recession has dropped faster for non-degreed people than for people with 4 year degrees. In fact the unemployment rate for those folks with out 4 year degrees is about at an all time low. The article said that a lot of large corporations have hired non-degreed people for jobs that they would have normally given to people with degrees and have said that they were performing well and suggested that degrees may not actually be needed.
What we hear today in most of the news reporting is that college graduates make significantly more money that non-graduates. What these two people are suggesting is that it may not have so much to do with one’s education as with ones other attributes. More recently, there was an article in the Wall Street Journal entitled “My Antibusiness Business Education”. This was written by a recent graduate with a Finance degree from a highly rated business college in Massachusets who felt that while he had learned some important things for a finance career he had also heard a lot of anti-business criticism. That if he had not been a Finance Major intent on a business career, he might have been persuaded not to participate in American business. He also mentioned the cost of his education was high to begin with and had increased rapidly over his four years.
What’s going on here? In this political campaign we’ve been told that a four-year college education should be for everyone to be able to survive economically in the future. On the other hand college costs have been rising much more rapidly than the inflation rate.and there has been some concern that individual debt from college may be ruining the economic recovery. Why is college training so expensive and does everyone really need to go to college?
I went college several years ago and I have helped put three children though college. I have a master’s degree and my six kids and kids in-law all have 4 year degrees and 3 have masters degrees. But things have changed over the 50 years since I was in college. And I have learned many things in 35 years experience with a large corporation where I had the opportunity to hire and supervise a lot of people. So I have some opinions of my own for what it’s worth.
- corporations have been – become – over infatuated with college degrees. While some jobs required degrees, there were jobs in my company that had college degree requirements, that I never thought justified.
- It does make a difference what subject one majors in. We hired a guy once who had, I think, a master’s degree in Greek Language and Mythology. He had not been able to get a job out of college, and so he had gone back to Jr. College to get a two-year degree in computer programming. We hired him as a programmer, but I think because he had a four-year degree in something, he was eligible for a lot of jobs that had a degree requirement. But his major did not get him a job.
- I think we may learn more through experience than in the classroom, but we need to have a way to assimilate our experience. In the class room we learn concepts that help us be able to assimilate and understand our experience. One time I had a man working for me as a manager who did not have a degree. He was managing a group that did a lot of accounting systems support. We were in a group controllers office one day and the controller suggested that he thought we might ought to change our internal reporting system to better fit how the current Executive VP was trying to manage the operation. Bob obviously did not understand what he was suggesting although he knew a lot about the details of how the system worked. He knew more about the details, but I understood what the controller was saying because I think with my MBA I had a better grasp of the concepts. We learn concepts in the classroom, but it’s through experience that we learn how to apply them.
- Concepts alone are not necessarily useful. I managed a Management Science/ Operations Research group for a while. The professional organization – ORSA/TIMS association – published two journals with articles written by scholarly PhD’s. One was called theory and the other was “useful” practical applications. I did not understand the theory, but the practical application articles I was able to follow well. The problem was the practical application stuff did not seem to practical. I finally quit reading that because the writers did not seem to have any concept of the “real” world. But our group did some models that were very useful.
- At some point I decided that our HR group doing the hiring, put degree requirements on some jobs because it gave them an objective way to easily eliminate some of the applications. Having a degree was an indication that one had some intelligence whether it applied directly to the job or not. As a manager, I was not sure that some jobs that had a degree requirement on them actually needed a degree. Some did. But I was not opposed to hiring a candidate with a degree in any case even though the degree might not be necessary. In the 70’s and 80′ with the baby boomers we had plenty of applications. That’s not necessarily the case today. So it’s not surprising that company’s are finding that people without degrees can be productive employees in some of those jobs.
The conventional wisdom today is that everyone needs a college degree whether they have an interest in intellectual pursuits or not. So everyone needs a degree (regardless of the major?) on order to have a well-paying job. But there may be more people with college degrees unemployed today that those without degrees. The important question may be what the job really requires, and what the individual is really has an interest in. Plumbers, electricians, and other skilled workers wages may have gone up more than a lot of other jobs and the employment possibilities may be better. Bill Gates and Steve Jobs invented most of what they did – it was not stuff that could be learned in school.
There is some concern that today’s conventional wisdom about college education, along with the government’s initiative to make college loans available has hurt the recovery. (See Robert Samuelson’s article headlined “Is Student debt Ruining the economic recovery?”
Colleges have changed since I was in school in the 60,s and 70,s. and they have gotten lots more expensive. In the next installment, I’ give some reasons why I think that has happened.