Once upon a time, the higher education of a college degree was the best bet for a secure economic future. Yet, the average cost of college tuition is increasing at a pace three times faster than the rate of inflation has quadrupled in the last 25 years. Consequently, the economic return of a college degree appears to be in steep decline. Of the 2009 college grads who applied for a job, only 19.7 percent have found one, according to a survey conducted by the National Association of Colleges and Employers. Presumably, this number will rise as more graduates blanket the marketplace with resumes, but gainful employment for today’s college graduate has become, undeniably, more elusive. Oppressively, the median average for debt for today’s college graduate is $17,120.
Short-Term Effect of Recession or New Economic Reality for Graduates?
One could argue that the dismal outlook for college graduates is a short-lived effect of the current recession, but long-term trends are challenging the conventional wisdom that a college degree is the most important economic asset. On average, college graduates will almost surely continue to make more money than those without degrees. Yet, the burden to pay off growing college debts may more than consume this advantage—even over the entire span of one’s lifetime.
In the home improvement industry, one can easily see these forces at play. As the world’s population begins to level off and even decline in some developed countries, the labor supply will become a scarcer and more valued commodity. Meanwhile, the home improvement industry hasn’t seen a trained labor supply that adequately matches homeowner demand in decades. Most home improvement trades have average hourly wages around $20, according to the Bureau of Labor Statistics. Yet, the ability to enter the industry young and eventually become a small business owner yields at least as much promise as many fields that require college degrees. Plus, as the value of applicable education and job training increases, the relative value of a college degree will decrease.
For Many Grads, Situation Even More Dire Entering College
As rough as it looks for the class of 2009, the class of 2013 may have an even bumpier road to navigate. From a recent CNN story about the rising costs of college: In Austin, Texas, Tony D’Addeo, a high school senior and straight-A student, hoped to attend an Ivy League school, paid for with his parents’ stock options. But the options, once worth several hundred thousand dollars, are now worthless. “I think a lot of families—lower class and middle class—are having to readjust their plans and goals,” said D’Addeo, who is now looking at a state school or possibly signing up for an ROTC program to cover college expenses.
In general, the relative wealth of previous generations was more supportive of their kids pursuing dreams outside the promise of wealth. Today, degrees like art history, anthropology, philosophy, and theater carry a heavier stigmatism, fair or not, of unemployability. Yet, if an 18 year-old feels compelled to enter college with an area of study directly applicable to the marketplace—engineering, nursing, education—he or she might as well enter a trade-school that delivers just as much as economic security at a fraction of the initial cost.
Wise Home Improvement Contractors See the Plight of College Grads as Opportunity
Combined with the perception and mounting evidence that a college degree no longer promises substantially better employment opportunities, more and more high school graduates may eschew college should a more direct and viable career opportunity present itself. Better yet for the home improvement industry, brighter, more capable students may be willing to seek these opportunities.
Unfortunately, the home improvement industry hasn’t escaped the wrecking ball of economic recession. Residential and commercial contractors have had to slash their workforce to balance out reduced consumer demand, just like so many American businesses. Yet, these companies would be remiss not to consider investments toward their future workforce. Current market forces suggest the popularity of apprenticeships may be returning. By finding young, capable, and ready-to-learn graduates, companies can train a cheaper and more dedicated workforce for future years of economic growth.