The persistence of the global recession has led everyone from world leaders at the Davos Summit to Brandeis undergraduates to question their fundamental assumptions about success.
In this vein, a debate has been raging across the academy and the news media about how one’s choice of college major, formerly a relative non-issue, affects the ability of college graduates to withstand financial pressures. In the mass media in particular, debate has centered upon the efficacy of holding a liberal arts degree in today’s economy.
Many economic factors have increased the sense of urgency pervading college campuses to reap the returns of their hard work. According to an expose published in the publication n +1 titled “Bad Education,” the total amount of student debt owned by banks has surpassed that of credit card debt (with the average amount of debt per individual at $25,000), while the average costs of a college education in the United States have ballooned 650 percent above inflation. “When I took out a student loan when I was in college,” explained Professor Scott Redenius (ECON) in an interview, “the bank collected a fairly significant fee. … The recent Obama administration plan to have these loans directly funded by the government should reduce student loan costs in that component.”
The Obama administration plan, however, has yet to extend its reach to private loans and decrease predatory lending practices. Banks continue to issue collateralized debt agreements backed by student debt (and government guarantees) known as Student Loan Asset-Backed Securities (SLABS), which use the same principles as the Collateralized Debt Obligations that contributed to the housing crisis, driving up the number of loans and therefore college costs.
Globalization has also increased financial returns for people holding skilled quantitative and technical jobs in developed countries, and raised the level of competitiveness for firms seeking college and graduate degree holders. “If you take a theory like Heckscher-Ohlin, it shows that increased trade hurts the relatively scarce factors and benefits the relatively abundant factors,” Redenius said. “The United States is quite relatively scarce in unskilled labor, so with globalization, those with a relatively low number of skills have been hurt.”
Andrea Dine, associate director of career development at the Hiatt Career Center, pointed out that “fields where there are major shortages pay more … accounting, actuarium and science research all pay the most—the quantitative, mathematical fields.”
Many economists and commentators, however, point out a caveat. In a blog article, “Angst for the Educated,” Adrian Wooldridge of The Economist writes that although the world is being reconfigured by technology, there will be increased pressure and uncertainty for people with technical degrees as computers replace jobs that were once carried out by large numbers of humans. “I think technology makes college graduates more productive,” Redenius said.
A 2011 Goergetown study also stated its conclusion in its title: “Not All College Degrees Are Created Equal.” While taking a differential view of earning potential for college majors, its findings indicate a more nuanced version of events than simply higher earning potential for vocational and quantitative majors, and lower earning potential for humanities majors. A poll of recent college graduates (those between the ages of 22 and 26) showed that the recession has affected architecture majors most adversely due to the decline in new construction and housing development, leading to an unemployment rate of 13.9 percent. Fine arts majors are the second worse-off in the job market, with 12.9 percent unemployment.
The Georgetown study would agree (if you can measure productivity with profits) as it concludes that those who produce technology tend to earn more than those who use it. “Andrea Dine continued to say, however, that “the skills employers most want are perfect for a liberal arts degree: communication skills, problem solving-analytical skills, and the desire to learn how to learn…Liberal arts majors feel a little behind in coding skills, but they catch up…and the faculty end up coming to them.”
Josh Hoffman-Senn ’13, co-founder of the Brandeis Economics Society and former investment banking summer analyst at Beamonte Investments in Boston, framed the problem of post-graduate employment as both an issue of motivation and experience. “It takes a lot of hard work,” he stated during an interview. When asked about how liberal arts majors fared in the financial market, Hoffman-Senn responded, “Companies want to have diverse employees and take students from a multitude of backgrounds, but quantitative majors have an easier time finding jobs.”
Statistics appear to back up Hoffman-Senn’s personal experiences as an intern in the financial world. If monetary gain is your concern, the majority of college graduates in the top 1 percent of income earners majored in quantitative fields—according to census data published in The New York Times. One may also find that zoology majors made it into the top five, and art history and criticism is in the top-10 highest earning majors: There are also more history majors in the 1 percent than economics majors specifically, according to The Times.
“What got me ahead was starting early, I started pursuing a career from freshman year, and building up experiences that help lead to where I want to be,” continued Hoffman-Senn. “Additionally, what many students don’t realize is that Brandeis has a pretty powerful alumni network which is loyal to current undergraduates, and not many students seem to be utilizing it to its fullest extent.”
