Despite a new report by labor analytics firm Burning Glass Technologies that 43 percent of college graduates today are underemployed, the myth about the marketability of a bachelor’s degree refuses to die (“Some 43% of College Grads Are Underemployed in First Job,” The Wall Street Journal, Oct. 27). That’s not at all surprising because the wage premium attached to a four-year degree is based on evidence from the past.
When a college degree was a rarity, holders could major in whatever they wanted without concern about finding a job commensurate with their education. But today, a bachelor’s degree is so common that what students major in is far more important. For example, I question the market value of a degree in gender studies. Yet students do opt for that major despite evidence that is virtually useless in the job market.
When I graduated from the University of Pennsylvania in the late 1950s, employers were not particularly interested in my liberal arts major. Perhaps that was because the mere possession of a B.A. from an Ivy League school signaled that I had the wherewithal to be an asset. But that was then. Today, so many young people have degrees from such a variety of schools that employers seek concrete evidence about what they can immediately contribute.
I think what we are seeing is a variation of Gresham’s Law, which said that cheap money drives dear money out of circulation. The easy availability of a degree from some colleges in some majors today will make the possession of a degree in STEM from a marquee-name school so much more valuable.
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Having even a job-irrelevant degree from an Ivy-League-level college will still be a big plus in today’s employment market. As you suggest, prospective employers will rationally view the fact that the college admitted the job applicant and the fact that the job applicant made it through the very competitive college as strong evidence that the job applicant is very intelligent and/or hard-working.
Of course, unless a college freshman is certain he/she is heading to a professional graduate school (or is so wealthy that jobs are an irrelevancy), it makes a lot of sense to pick a major that is relevant to a job that the applicant would like to have some day. Agree that just having a college degree today is much less helpful in the job market than it was 50 years ago.
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Labor Lawyer: Possession of a four-year degree historically has served as a signaling device to prospective employers. Today, however, the major is more important. An Ivy League degree in history is less valuable than a state college degree in STEM. It all boils down to supply and demand.
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