3 Reasons Your College Degree May Not Earn You More Money
Education has been marketed as society’s great equalizer for generations. No matter who you are or where you’re from, the American Dream has dictated that with a healthy dose of work ethic, and a proper education, you can achieve your goals. That promise hasn’t been paying off in full, unfortunately, but education has still been the lynchpin that’s held the meritocracy in place.
The issue is, college degrees have simultaneously become vastly more expensive, and worth less and less on the open market. Getting a degree is no longer a guarantee of a good job – it’s merely proof that you shelled out the cash to get it. It’s a significant issue, and one with no clear solution.
Still, it’s more or less accepted that going to school to get your degree – or even earning a more advanced degree – is a worthwhile investment. The higher your level of education, the more money you typically earn, after all. But for those on the bottom rungs of the economic ladder, getting educated is becoming a less and less effective tool for ascending.
For those living in poverty, this is incredibly important, and disheartening. A recent article published by Demos, a public policy organization that works in matters dealing with inequality, dug into the data to get a more accurate assessment of what’s happening. The article’s main point? Education isn’t the fix for poverty we had hoped it would be, for three chief reasons.
The article’s author, Matt Bruenig, took a look at a new plan put together by both the Brookings Institute and the American Enterprise Institute, which seeks to promote education, marriage, and work as the primary factors to focus on for getting out of poverty. But, in Bruenig’s analysis of the data (which is extensive, so check it out), it looks as though those things won’t do the trick.
Here are the three reasons why, and how it may impact your future plans if you want to live out your own rags to riches story.
1. Job inflation
This is a matter of supply and demand. If there are more job applicants out there with inflated credentials (college degrees), then those credentials aren’t worth as much. They’re not as scarce, and can thus be bought for a cheaper price. So, all that time and money you spent on your degree is going to earn you less of a ‘return’ when salaries are negotiated.
In short, an influx of college degrees or high school diplomas doesn’t create more jobs, according to Bruenig. Instead, the jobs that do exist become harder to get. “The types of jobs available in a society, and their level of compensation, is determined by many factors (demand, worker power, technology, global competition, natural resources, etc.) that have little to do with the number of degrees that society is minting,” he writes.
2. More education doesn’t translate to more productivity
You may have a degree or a high school diploma, but that doesn’t necessarily mean you’re more valuable to an employer. And your value to an employer is ultimately what’s going to determine how much you earn. Having more education may increase the likelihood that you’ll land a better job by opening up additional doors, but it’s not a guarantee of anything.
Again, being more educated means that you may be qualified, but that may not translate into additional productivity. And that’s what employers need and want.
3. The root causes of poverty don’t change
The final reason that more education doesn’t really help the impoverished is because the people in poverty are typically in positions in which additional education won’t benefit them.
“Poverty is really about non-working people: children, elderly, disabled, students, carers, and the unemployed. The big things that cause poverty for adults over the age of 25 in a low-welfare capitalist society—old-age, disability, unemployment, having children—do not go away just because you have a better degree,” says Bruenig.
Basically, the things that send people into poverty are things that a college degree won’t prevent, or help. That’s not to say you shouldn’t strive for a better degree, or stop learning. But on a societal level, it may be time to rethink the role of higher education in how we aim to propel people to prosperity.