Is the College Degree Obsolete?
Who needs a Sheepskin?
I am starting to wonder if college is becoming obsolete for a lot of people. I realize that in the past it has paid off for a lot of people, but I am starting to notice a large schism in jobs. Now I realize that a lot of what I am going to say is anecdotal evidence, but I still think that a major transformation of the economy is coming our way.
Now if I were to just look at the Bureau of Labor Statistics I would see something like this:
Amount of Education - Median Weekly Earnings - Unemployment Rate
- doctoral degree $1,532 2.5%
- professional degree $1,529 2.3%
- master’s degree $1,257 3.9%
- bachelor’s degree $1,025 5.2%
- associate degree $761 6.8%
- college dropout $699 8.6%
- high school grad $626 9.7%
- high school dropout $454 14.6%
First of all, I find these numbers highly suspicious. A person with an associate's degree is listed as at about a 6.8% unemployment rate. If the average career length is around 40 years, then that comes out to 2.72 years that this person would be unemployed during his career. Even if his career length is 50 years, that still is only 3.4 years of unemployment. But it seems that every college graduate I know has spent a significant portion of their life unemployed. I know the government is deceptive about the real unemployment rate. If I use the numbers from shadowstats.com it seems to be a lot closer to my observations on unemployed friends.
But there is something even worse than this going on and this is what I am seeing. It is the schism between government workers and private workers. Government workers seem to be pulling in huge salaries these days with strong job security. When they do lose a job, they can easily find another government job. Every single one of my friends and family that have gotten into government work are currently employed. My friends and family not in government are almost universally unemployed or working at below minimum wages. The first exception is my brother who works on a server farm and he doesn't have a college degree. The other exceptions are my friends who are self-employed. Those numbers from the Bureau of Labor do not show that schism.
This brings me to my main point. Unless you are planning to go into government work (and you will need a squeaky clean life for this) or you need a medical degree, I think most people should avoid college. Work at a minimum wage job for a couple years, save up a couple grand or so and start a business of some sort. If you are capable of making it through college, then you are certainly capable of starting some kind of self-employed business.
Grow Your Own Job
What kind of business should you start? You might think I would suggest
some kind of internet business, but you would be wrong. I find it a
hundred times harder to make a buck on the internet than I do at a so
called bricks and mortar business. I spent years designing and
programming video games with only a pittance to show for it (earning
about $1500 with over 5000 hours labor). I have done a few other
projects and they earned even less per hour. As for my blogging, I am
mainly doing this for practice. I don't expect to earn any real money
from it, but I do consider it educational. Besides, sometimes there is a
serendipitous result when we just do something!
Okay, back to brick and mortar businesses. In July of 2007, I started a used computer store with $3000. I opened the doors at 9 AM and closed the doors at 9 PM and I did that seven days a week for the first six months. I spent several hours every morning advertising on craigslist and sometimes a few hours in the afternoon. I slept in the back of the store to save every penny I could. Any time I sold a computer, I bought another one, fixed it up, and resold it. The first few months I survived mainly off my sales of refurbished computers. I had just a couple of repairs. Word of mouth started to spread about my store and about every two months my repair business doubled. In August of 2008, I repaired over a hundred computers. I charged an average fee of $100 per computer which would usually take me 1-2 hours each. I pulled in over $10,000 that month and spent about $1000 on overhead. That is a $9000 profit I was making per month. Yes, I was still working over 80 hours a week, but I found that 80 hours to be less stressful than working for somebody. I had to sell the store two months later due to personal issues (the store was running great and I loved it!) but the learning experience was absolutely phenomenal and the amount of money I made was beyond anything that I had ever expected.
This bout of entrepreneuralism opened up my eyes to other brick and mortar businesses. For instance, I started noticing the amount of time people spend in convenience stores and how much money they spend while there. I could probably make just as much money running a convenience store as I did running the computer store. I have one friend who is doing yard work and his only advertisement is word of mouth and craigslist. He is charging $25 per hour (cash only) and has so much business that he hired someone on a cash basis of $10 per hour to help him. This is a $15/hour profit, so he is now making around $40 per hour. Remember, you would have to make $50-$55 per hour to match this if you were working a job that required paying taxes. My friend spent almost two years looking for a minimum wage job without any luck before he started doing this. And he is a high school dropout.
This is the new economy. If you want to earn a decent wage, you are probably going to have to work for yourself. And if you work for yourself, then college is probably useless. BTW, I am not saying you should be ignorant. Knowledge and logic reasoning is important. In fact, in our economy, it is knowledge that is the power to acquire wealth. I totally believe in education, but you can educate yourself for almost free these days thanks to the internet.