As you saw in Table 1.2 in Chapter 1 of Personal Finance, Turning Money into Wealth, your college major goes a long way toward determining your salary, but perhaps even more important, not only does it help determine your salary, it also plays a major role in determining whether you even get a job. Some majors are simply in more demand than others. On top of that, the recent economic downturn has made things even tougher for the 1.8 million college grads this year – and this has been the case since 2006 when the economy began to slow down. Since 2006, according to a survey conducted by the Center For Workforce Development at Rutgers University titled “Chasing the American Dream: Recent College Graduates and the Great Recession,” only half of those graduating from college presently have a full-time employment.
The report is a result of interviews conduced with 444 graduates of four-year colleges and universities from the classes of 2006 through 2011. Some of their findings deal with the difficulties of finding full-time employment in their “chosen field” with just 39% reporting the job being closely related to their field of study The median salary for all graduates was $28,000. Table 2 shows the variation seen between groups. Those who graduated during the recession-era labor market (2009 to 2011) earned $3,000 less on average in their first job than those who graduated before the recession began. Their median salaries amount to $27,000 and $30,000, respectively. An important finding was that students who completed an internship while in college earned nearly 15% more on average—$30,000 versus $26,000—than those who did not undertake an internship. Similarly, graduates who found a job related to the field in which they got their degree benefited by the same amount.
While this survey was not uplifting, it did provide some direction for those still in college – particularly with respect to the selection of their major and the importance of an internship.
- Take a look at the Rutgers report “Chasing the American Dream: Recent College Graduates and the Great Recession” – what skills increased as a result of taking an internship? (Hint: look at Table 5.)
- Do you think the results presented Figures 16 and 17 will influence your choice of major? Why or why not? Be prepared to discuss this in class.
- What is the one fact that surprised you the most about the results? Be prepared to discuss this in class.