Stay in school! I mean it!

[laurence]

I have to say, I really liked this article:

http://finance.yahoo.com/columnist/article/economist/1332

I found the statistics on real wage change for the different education levels very revealing. Everybody knows a college grad can earn more than a high school dropout, but to see the gap widening so much, wow! Good point about minimum wage, too.

 

[retire@40]

Or learn a trade, do it well, and start your own business. You may make even more than a college grad.

 

[laurence]

Or learn a trade, do it well, and start your own business. You may make even more than a college grad.

Quit thinking outside the box! Absolutely, the only route to big time wealth is your own business. But for the 90% of Americans who lack the mind/drive/desire/stomach for risk, education has a great return on investment. But I was really struck by this articles breakdown by education level. "The poor get poorer" was never so clearly shown to me. How far can that sink before something gives?

 

[wildcat]

Or learn a trade, do it well, and start your own business. You may make even more than a college grad

I happen to enjoy what seem to be infomercials and don't forget to mention starting your own business every time you post

 

[moghopper]

I found the statistics on real wage change for the different education levels very revealing. Everybody knows a college grad can earn more than a high school dropout, but to see the gap widening so much, wow! Good point about minimum wage, too.

I'm not a big fan of the government setting wage levels, or otherwise trying to help the poorer members of society - mainly because I think they're terrible at it. But one place I think they need to continue to re-emphasize is education. IMO, More should be done to ensure that talented young adults be given the opportunity to become educated.

However, it does make sense to juxtapose this article with the general level of education in society. Data is available at http://www.census.gov/population/www/socdemo/educ-attn.html

Even since 1980 (article mentions 1979) college participation has gone from ~32% to ~53%. So, obviously, people are aware of this change - and some who would have been in the "no college" group previously, are now in the college group.

"Some College" means less than 4 years.
"college+" means 4 years or more.


25 yo and older (Both Sexes - values expressed in thousands)

Year Total Some college college+
2004 186,876 47,571 25.46% 51,749 27.69
2000 175,230 44,445 25.36% 44,845 25.59
1990 156,538 28,075 17.93% 33,291 21.27
1980 130,409 19,379 14.86% 22,193 17.02
1970 109,310 11,164 10.21% 12,062 11.03
1960 99,465 8,747 8.79% 7,617 7.66

 

[SteveR]

Just for the sake of discussion:

From the popular press, personal observation and comments made from many others in industry, it would appear that the US is losing a lot of low tech. manufacturing jobs to off-shore companies due to labor costs but also high tech. jobs too. With the migration of manufacturing to other world locations, the movement in jobs seems to be to the service sector. Even some aspects of this sector are moving off-shore (tech. support, etc.).

IMHO, the need for a large workforce of more highly educated people in the US will not be needed and cannot be supported with higher wages for many of the service or low-tech. jobs that may be available. This may affect the long term wages earned since the Global economy is one drive my costs. Manufacturing and some services will move to the lowest cost provider. US companies will continue to cut staff and hold down wages (as they have been doing for the past couple of decades) in an attempt to remain competitive. Higher educated people demand higher wages and this flies in the face of lower costs.

High tech. jobs will continue to exist but not at the levels we have seen in the past. As other countries increase the education levels of their people and continue to hold down wages (India and China for example) they will continue to grow their industries at the expense of the US, Western Europe and Japan.

So, what does that mean for the college bound person today and over the next 10-20 years? Will there continue to be a demand for these people? Where will they work? Replacement of Baby Boomers to me is not the answer. Jobs are declining and my experience has been that many jobs vacated by a person retiring or leaving are not filled; they are combined with other jobs. The result is a net loss in the total number of jobs.

So, my question is:

How much education do you need to so most service industry jobs these days?

 

[justin]

How much education do you need to so most service industry jobs these days?

Based on personal experience with clerks at walmart and drive-thru operators at McDonald's, more education among the service industry jobs is needed. One key aspect of a highly educated work force is economic flexibility. With structural shifts in the economy, industry and employment, how well can our work force adapt to change?

Barring short term recessions where unemployment will likely spike, there shouldn't be massively high rates of unemployment. In the event of a surplus of highly skilled available labor in the US, the cost of labor will go down (supply-demand), thereby making the US more cost competitive w.r.t. overseas outsourced labor. Equilibrium will be reached.

Without education and workforce flexibility, people like Billy Joe Bob the unionized screw turner at the local GM plant earning $65000/yr is, quite literally, screwed. When he realizes the competitive fair market rate for a screw turner is $18000/yr, adjustments will have to be made.

 

[MasterBlaster]

Screw turners in China make only 45 cents an hour or around $900/year. That $18k job seems like it's too generous.

 

[justin]

Screw turners in China make only 45 cents an hour or around $900/year. That $18k job seems like it's too generous.

But they steal half the screws. The quality isn't quite as good. Then you have to import the goods. There's more cost and a big time lag. International supervision costs money too. Compliance with a foreign jurisdiction's laws, etc. etc.

Maybe $16000, no benefits. Happy now? Seriously, $8-9/hr for marginally skilled light manufacturing is a pretty standard rate around here (for reliable employees, that is).

 

[Cut-Throat]

Having a college degree or more is certainly mandatory in today's job market. However, it does not guarantee a good job, like it did 30 years ago.

Just ask the 3 waitresses at my coffee shop that have masters degrees. They are currently going to nursing school. Hoping to get that 'Sweet third shift' that pays about $30K-$40K per year!

The middle class of the U.S. is becoming extinct. Look for us to become at lot like Latin America. A very, very few very.very rich and Lots of Poor Folk!

 

[justin]

Having a college degree or more is certainly mandatory in today's job market. However, it does not guarantee a good job, like it did 30 years ago.

Just ask the 3 waitresses at my coffee shop that have masters degrees. They are currently going to nursing school. Hoping to get that 'Sweet third shift' that pays about $30K-$40K per year!

The middle class of the U.S. is becoming extinct. Look for us to become at lot like Latin America. A very, very few very.very rich and Lots of Poor Folk!

Around here, they are throwing around signing bonuses and retention bonuses to get nurses. $30-40k/yr is pretty standard for a nurse with a 2 year Associate's degree. I've got one in the family. That'll get you solidly middle class pretty quick.

Not sure where you live, but rural America is in pretty bad shape. High unemployment all around in the rural parts of my state. That goes with the highly uneducated, non-flexible work force.

And I agree, a master's degree isn't worth much at all, in certain fields. I have a buddy with a master's in English - can't find anything paying more than $10/hr. Secretarial work, burger flipper, dishwasher, filing, data entry. He's "giving up" and getting his teaching license for K-12 public school.

The important lesson may be to obtain marketable skills from somewhere - internships, apprenticeships, on the job training, an applied degree, trade school, professional school.

 

[moghopper]

Around here, they are throwing around signing bonuses and retention bonuses to get nurses. $30-40k/yr is pretty standard for a nurse with a 2 year Associate's degree.

Around here, I'd say that dollar figure is low. High demand for nurses. High burnout too, though.

Another thread that proves how much people love doom and gloom.

 

[MasterBlaster]

The middle class of the U.S. is becoming extinct

I hope so It's been pretty hard lately to get good domestic help at affordable rates. 

Just the other day the valet at the Polo Club was getting kind of uppity with me as he was parking my Maybach. They just aren't as greatful as they used to be. 

 

[laurence]

I dunno, if we are going to get un-scientific about it, I can say my anecdotal evidence is all of my friends who went to college are doing just fine, earning somewhere between 45k at the low end (teacher) and ~150k at the high end (uber-tech database web synergistic consultant type). Every time we get together for the past five years, during the whole dot-com burst and recession even, things were bigger and better for all. Now my non-college friends are having serious issues. I would think rather than going away, the face of the middle class is changing, less union car plant workers, more desktop support technicians.

 

[Nords]

I would think rather than going away, the face of the middle class is changing, less union car plant workers, more desktop support technicians. 

When our kid was a lot younger she was going to be a veterinarian. I read that they're in the top 10 of women's incomes ("Millionaire Women Next Door") and that seemed great.

Now that she's seen Nicholas Cage in "National Treasure" and whatsername in "Legally Blonde", history is much more cool and you can do anything you put your mind to. So she's decided to get a bachelor's in history and then go to law school.

It's all grrrl power and it's her life, so things could be a lot worse. Could be West Point.

 

[Jack_Key]

The middle class of the U.S. is becoming extinct. Look for us to become at lot like Latin America. A very, very few very.very rich and Lots of Poor Folk!

Here in Canada, the income tax rates are so high for the rich that they end-up being mid-class, poors don't pay tax at all, so that we are all getting equally poor.

 

[moghopper]

Here in Canada, the income tax rates are so high for the rich that they end-up being mid-class...

rich eh, very nice. An' how'd you get that, eh? By exploitin' the workers -- by 'angin' on to our outdated imperialist dogma which perpetuates the economic an' social differences in our society! If there's ever going to be any progress...

 

[MasterBlaster]

Canadian tax rates are similar to those in high tax states in the US when one considers US federal, state, and Social Security and Medicare taxes.

Canadian Tax rates for federal and Newfoundland Province as follows (other Provinces are similar):

over $115,739 (taxable income)  48.64%(income tax) 24.32%(capital gains) 37.32%(Canadian dividends)

other income brackets are lower in a sliding scale

http://www.taxtips.ca/tax_rates.htm

 

[SteveR]

Canadian Tax rates for federal and Newfoundland Province as follows (other Provinces are similar):

over $115,739(taxable income)  48.64%(income tax) 24.32%(capital gains) 37.32%(Canadian dividends)

Those are similar to those in high tax states in the US considering US federal, state, and Social Security and Medicare taxes.

Sure makes me what to move right up there.

 

[TargaDave]

One area the US still leads in is a favorable business environment and culture for hi-tech entreprenuers. Lots of investment money floating around. Plenty of wild eyed entreprenuers. It goes beyond the Valley and Boston. Most of this is hi-tech value added, so jobs created from this should hang around a bit. Europe and Asia are catching up though.

I think the problem is that this creates a lot fewer (although high paying) jobs in isolated pockets compared to the many middle class manufacturing jobs going away. Still a net loss.

 

[justin]

China, India and other cheap labor developing countries have many problems. Cultural barriers to certain types of work (males and females working together in India for example). Intermittent electricity/telephone/water service. Red tape, bureaucracy and bribery. Uncertain legal systems. Threats to notions of private property. Inefficiencies. Poorly developed or unreliable infrastructure. Uneducated and unskilled workforces.

Most of these will improve over time, but improvements cost money, and that will push the price of labor up.

Foreign labor may be cheap, but it is still quite a hurdle to outsource effectively. Many jobs can't be outsourced. Many more are not able to be outsourced due to economic unfeasibility.

 

[wildcat]

[For more on "Why Stay in School?", see Andrew Hacker's Money: Who has how much and why. The chart on page 218 is particularly revealing. Fully 20% of workers with only a high school diploma earn more than 30% of the people holding graduate degrees. I suspect these results would be even worse (for the case that graduate school pays) if the analysis excluded MDs, JDs and MBAs from the Top 5 business schools.

/quote]

This is from the rehomepage

 

[laurence]

WC, my man, you having a down week, first the hellraiser mask avatar, then the shawshank redemption quote? Come back to us man! Hope is a good thing!

 

[moghopper]

...compared to the many middle class manufacturing jobs going away. Still a net loss.

Manufacturing jobs are disappearing world wide. Robots are cheaper. Their healthcare is cheaper. They complain less. According to many sources, China is losing considerably more manufacturing jobs than anyone else - because they have more to gain in the area of productivity.

Well, those manufacturing jobs were never as good as the agricultural jobs they replaced anyway.

 

[wildcat]

WC, my man, you having a down year week, first the hellraiser mask avatar, then the shawshank redemption quote? Come back to us man! Hope is a good thing!

Sorry Laurence, I'll try