In the 1990s and early 2000s no one was seriously questioning the sustainability of large price increases in housing, or the integrity of the mortgages they secured. The same was true of the stock market in the 1980s, in the 1990s, the early 2000s, or even today. As we’ve seen in each case, that level of certainty is often the last step before a crisis. A similar level of faith continues to exist in the assumed value of a college education and in the student loan debt commonly used to obtain it. Yet people continue to flock to college without ever seriously considering if there are alternatives to college careers.
21st Century quandary: a college education has risks!
A college degree has value, and will continue to in the future — I have one myself. But the problem is that a college education today carries risks that it didn’t just a decade or two ago:
- The spectacular rise in the cost of college can leave a student and his family burdened by debt for years into the future; for the student that debt could impair future career mobility.
- Technology and off-shoring of jobs means a real risk that either employment in a given degree field will be limited or that pay will be less than expected
- Opportunity cost of non-college fields not pursued
None of these may be an issue for a well-to-do family with plentiful resources and numerous options, but many middle class families have come to fully expect that money paid for their children’s higher education will pay off, and usually pretty quickly.
While degrees in fields like medicine and engineering may continue to be “money in the bank”, sending a child to college to pursue a less technical degree with the hope that he’ll somehow find his niche may be a luxury many families can no longer afford.
What are the alternatives to college careers?
You’ve heard the investment disclaimer, “past performance is not a guarantee of future returns”? It should now apply to careers. The fact that a given career field was a prosperous one in the recent past doesn’t mean it will continue to be in the future.
The pattern of careers in the last few years has been one of perpetual change. As noted above, technology and off-shoring of jobs and industries means many careers are no longer the safe havens they once were. Though insecurity has become the order of the day in a variety of fields, the greatest damage occurs in the ones that cost the most to enter, which are generally those in the college norm.
What careers or career skills could a young person consider in lieu of college?
Skilled trades and some non-degree jobs are always in demand
There was once an unquestioned assumption that recessions and depressions would take down blue collar jobs, but a well educated white collar employee would always be safe. That assumption is increasingly weak.
Many of the skilled trades are now providing more stable employment—and often at higher pay—than the white collar jobs so many eagerly seek. Part of the reason for this is that skilled trades require that the worker be physically present. Another is that the flood of young people into colleges and universities has thinned the ranks of those who might otherwise pursue the trades.
An article on CNNMoney reported the following six non-degree careers that can pay six figures, with median and top pay levels for each:
Fire Chief, $72,900; $121,000
Air Traffic Controller, $83,700; $159,000
Nuclear Power Reactor Manager, $86,200; $128,000
Director of Security, $68,700; $123,000
Elevator Mechanic, $72,900; $109,000
Court Reporter, $57,200; $105,000
This is a short list, but if you think about everyone you know and what they do for a living, you can come up with more non-college occupations to add to this list.
Preparing for life as an Entrepreneur
In many respects, self-employment is the ultimate career solution. People who can earn a living from their own business never need anyone to give them a job. And if you can earn your own living, credentials—including higher education—are generally less important than when you’re competing against a large pool of others for a limited number of traditional jobs. With job security slipping into largely myth status, encouraging young people to prepare for self employment may be the most responsible advice we can give.
Critical question: does college actually prepare students for self-employment?
My sense is no. On balance, college trains students for life in the corporate realm. Largely judged on post graduate job placement rates, schools facilitate, attract and encourage on-site recruiting by large organizations. Curriculum is often based on the needs of these organizations. Training for a career in self-employment or in a small business, if it does take place, seems mostly incidental.
Not only is this poor preparation for self-employment, but it can also serve as a hindrance. Training in organizational behavior and psychology leave the graduate unprepared for a career based on self reliance and risk taking, two crucial aspects of self employment.
How do you prepare for self employment if not through college?
- Learn a trade – hands on skills often convert readily into self employment, and can be acquired through technical schooling and/or paid apprenticeship
- Acquire sales experience – academicians generally look down on sales, but no matter what skill or product you have, the ability to sell it to the end user is the most critical difference between an employee and the owner of the business; on the job training is the best preparation for this
- Work for a small business – the smaller the business, the more involved with big picture of a business and the closer you are to its customer base, the greater the likelihood of starting your own business; partnership in- or acquisition of- the business are also possibilities
- Start a side business – a relatively low risk way of starting and growing a business; a venture started early in life could be expanded over time until it blooms into a full time career; trial and error — along with passion for the venture — will provide what formal education can’t
There’s a persistent belief—and one not entirely without justification—that not everyone is cut out to be self employed. I would agree that not everyone should plunge into their own business as a full time venture. But I also believe that if everyone who could be self-employed would be, the number of jobs available for those who can’t would increase substantially. Starting a side business is an excellent way for many to do this.
Do you believe that a college education is still the best path for most young people? What do you think of the alternatives I’ve presented? Can you think of any others?