Does college pay?

Despite tales of college graduates working as cashiers, college is still worth it, argues Anthony Carnevale of Georgetown’s Center on Education and the Workforce in Inside Higher Ed. Bureau of Labor Statistics data misses a shift in the economy: Employers are requiring postsecondary credentials for jobs that didn’t use to require a two- or four-year degree, he writes.

Examples in the white-collar world include increasing demand for college degrees among managers, health care workers, and a wide variety of office workers, from insurance agents to building inspectors. Examples in the blue- and pink-collar world include increasing degree requirements among production workers, health care technicians, and utility and transportation workers.

Simple, repetitive tasks have been automated.  Workers need to perform more sophisticated tasks that require more skill, training and education, Carnevale writes. Employers are paying a wage premium to hire workers with college credentials.

Bartenders, cab drivers and janitors with bachelor’s degrees will move to better jobs, he writes. “Over a 10-year period, each cashier job has 13 incumbents who permanently leave the occupation; among medical doctors, that replacement rate is only one.”

There is a higher education bubble at the bachelor’s degree level, writes Peter Wood of the National Association of Scholars. As the recession pushes more four-year graduates into low-level jobs, high school graduates are getting cagier about borrowing to take the traditional college path to a career.

More and more students are enrolling in lower-priced community colleges either to take a terminal associate’s degree or to transfer as juniors to a senior college. And online education is luring more and more students to the idea of gaining college credentials through part-time study while working full-time.

All it would take for higher education’s bubble to pop would be a significant increase in the percent of students defecting to community colleges or online programs. Perhaps as little as a ten percent shift would pose dramatic problems for the expensive second-tier private colleges.

Career colleges are growing rapidly, according to a new Carnegie Foundation report.  The focus of higher education is shifting from liberal arts colleges to professional training programs in business, health, education and law.

The majority of the new institutions—77 percent—are from the private for-profit sector. The growth in public institutions and private not-for-profit institutions has been minimal, accounting for only 4 percent and 19 percent of the newly classified institutions respectively.

In addition, more two-year colleges are adding bachelor’s degree programs.