OLMIS

by Brenda Turner
Published Mar-20-2013

Unemployment and Earnings Education and Occupations The Cost of a Degree Summary

A bachelor's degree does not guarantee instant and steady employment, especially in the current economic climate, but it certainly does improve one's chances at a productive, full career. The degree, often preferred by employers for particular occupations, is a necessity for some jobs and can help applicants be more competitive for others. For individuals not entering the workforce directly after receiving their bachelor's, the four or more years spent earning the degree helps them become educated in a field of interest, and they undoubtedly gain knowledge, skills, and experiences that will benefit them in other ways.

Every year, thousands of people earn a bachelor's degree from Oregon's public and private colleges. While some continue their education, others leave the state, or some do not search for a job. A large share of graduates seek employment within Oregon. Two benefits that most - but not all - of these individuals will realize are a lower unemployment rate and higher median earnings than job seekers without college degrees.

Nationally, college graduates with bachelor's degrees fared better in the economic downturn than others, with an unemployment rate of 4.5 percent in 2012, compared with all persons at 6.8 percent (Graph 1). Those with bachelor's degrees also had higher median earnings, about $55,432 per year ($1,066 per week), versus the $33,904 per year ($652 per week) that high school graduates earned. The high school figure is much higher than what an individual could earn full time at Oregon's current minimum wage of $8.95 per hour, or $358 per week.

Earnings generally increase with education, but some exceptions exist. A few factors contribute to the presence of these "outliers." First, some occupations requiring a bachelor's degree simply pay low wages. Second, many with their bachelor's degree are underemployed - working in occupations that do not require their level of education. Finally, some high-earning workers without a college degree are likely to be older workers who are at the peak of their careers. Similarly, some low-earning workers with college degrees are likely to be younger and near the bottom of their career ladders.

Business, management, and marketing was the most common program of study for bachelor's degree recipients during the 2010-2011 school year in Oregon (Graph 2). Social sciences was the second most popular degree conferred, and includes such programs as anthropology, criminology, economics, and political science. Together, business and social science represented 28 percent of Oregon's 19,542 awarded bachelor's degrees.

Some bachelor's recipients continued on to graduate programs. At the same time, students were graduating with advanced degrees and likely competing for many of the same jobs as the undergraduates.

After receiving their degrees, many employment opportunities exist for new and existing bachelor's degree holders. In 2010, 16.9 percent of Oregon's jobs required a bachelor's degree, and 15.3 percent of projected total job openings between 2010 and 2020 will require one (Table 1). However, Oregon has experienced significant overall job loss in the last couple of years, causing many new graduates difficulty landing jobs in their fields of study and at their skill levels due to high competition for jobs with their peers and experienced bachelor's degree holders. As new and recent graduates shift to seek jobs outside their majors, they could displace a number of other, presumably less-educated, workers from jobs that traditionally do not require a bachelor's degree.

For those working in occupations that require a bachelor's degree, average annual wages vary widely, depending upon their field of work. Table 2 shows a selection of occupations that require a bachelor's degree and their respective average annual wages. In 2012, these occupations paid between $37,128 (for museum technicians and conservators) and $131,321 (for engineering managers). Most new graduates can expect earnings in the lower half of this range.

Fast-growing occupations requiring a bachelor's span a variety of fields, including health care, education, and computer systems and software (Table 3). These high-growth occupations also tend to pay high wages. Of the top 10, nine fall into the high-wage category (earnings greater than $50,000 per year).

The overall share of high-wage jobs is larger for occupations requiring a bachelor's degree than for occupations with an associate degree or no postsecondary education as a minimum requirement. In 2010, 82 percent of employment (228,895 jobs) in Oregon's occupations requiring a bachelor's degree as a minimum requirement paid more than $50,000 a year. By comparison, 80 percent (49,232> jobs) requiring a minimum of an associate degree paid more than $50,000 annually,and only 8 percent (85,386 jobs) of Oregon employment in occupations that required no postsecondary education hit the high-wage mark.

The benefits of lower unemployment and higher wages associated with a bachelor's degree come at a cost to the degree-earner. According to The College Board, in 2011-2012, public four-year colleges in the U.S. charge an average of $2,963 per year in tuition and fees. Nonprofit private four-year colleges charge $28,500 on average per year. Oregon University System's public institutions, which include both research and non-research public universities, charge $3,600 to $4,200 in tuition and fees.

Students who attend a community college and transfer coursework to a four-year college find lower tuition rates for their lower division courses. However, costs in these two-year institutions continue to rise as well. Tuition at Oregon community colleges increased by 30 percent between the 2006-2007 and 2011-2012 academic years, from $2,827 to $3,663, not including fees. Increasing community college costs are also paired with increasing demand for transfer coursework and re-training of recently displaced workers.

In addition to the cost of tuition, fees, and room and board, most students attending four-year colleges forego the income of a full-time job. This lost income adds to the short-term cost of obtaining a four-year college degree. With the rising cost of tuition, bachelor's degree earners also face increasing long-term costs. A majority of students acquire loan debt to finance their education, and student loan repayments generally last anywhere from 10 to 30 years after receiving the degree. The Project on Student Debt found that on average, students in the U.S. graduating with tuition loans accumulated $12,750 of debt in 1996. By 2008, the figure rose to nearly $23,200 in average student loan debt. And in 2011, it was $26,600. In Oregon, 63 percent of students graduating from public and private four-year institutions in 2011 acquired student debt; the average amount totaled $25,497.

A combination of good prospects for college-level jobs, lower unemployment rates, higher median earnings, and furthering one's general knowledge, skills, and abilities are strong incentives for attending college. Other factors should be considered, of course, before seeking a bachelor's degree. For example, prospective college students should ask themselves what will be gained from the time, cost, and effort involved in obtaining a degree. Those planning on entering the workforce should consider which occupations will offer the most college-level jobs, the nature of the work, and which jobs fit individual skills and aptitudes. Many options exist in addition to a bachelor's degree, including apprenticeships, military service, and private career schools, among others.