04 Sep Words of Wisdom
We are made wise not by the recollection of our past,
but by the responsibility for our future.
– George Bernard Shaw
I had 4 different majors while I was in college. I changed my major every year, sometimes more than once per year. It was the 2nd semester of my junior year before I found my true academic passion (Economics).
As a teenager, I wanted to become an emergency room physician. I still had that dream when I was discharged from the Army. I quickly enrolled in college as a married father with a double major in chemistry & biology. I went to class by day, worked by night, and spent as much time as possible with my wife & child. After 2 semesters of very little sleep, I decided that I didn’t want to have such an exhausting schedule for the next 10 years and changed my major.
I had just taken a new job in construction and was fascinated by the whole process, so I changed my major to civil engineering. It only took 2 semesters for me to discover that the idea of being a civil engineer appealed to me a whole lot more than the actual process of becoming a civil engineer, so I changed my major again.
Like many young people, I was duly impressed by my professors and decided I would become a college professor in a field I really loved, history. I changed my major to history and this time I stuck with it ….. for 3 semesters.
Because I kept changing my major, my Core Educational Requirements kept changing. As a history major, the College of Social Sciences required me to complete ECON 100 – Introduction to Economics. I enrolled in a class & almost instantly knew economics was my field.
Economics came naturally to me. I intuitively understood the subject. I could remember and apply everything the professor taught. I scored perfect 100’s on every quiz, test, & research paper. I even used it to come up with some interesting papers in other classes, such as a cultural anthropology paper; The Economics of Human Mating Rituals. I asked the economics professor to become my advisor and changed my major for the 4th & final time, officially becoming an economics major.
I bring this up because the smell of football is in the air. The smell of football means that high school seniors have started the college application process. It means that college freshmen are being introduced to subjects for the first time. It means that college students everywhere are being exposed to new fields and changing their academic minds. The smell of football means that somebody somewhere on some campus is selecting a major …. or changing their major for the umpteenth time.
As parents, grandparents, aunts, & uncles, we are presented with an opportunity to help guide our children, grandchildren, nieces, & nephews every time they want to change their major. We can offer up bad advice, “Do whatever makes you happy.”, or we can offer prudent words of wisdom, “How will you use that knowledge to successfully support yourself & your family?”. Let’s talk about how we can use our influence to offer up prudent words of wisdom that will help guide the young people we love to future financial success.
Unless a young student is independently wealthy, the purpose of a college education is to prepare them to obtain a job and begin a career. A degree in Liberal Arts or Philosophy may expose a student to a wide variety of subjects, but it does very little to prepare them for employment. A review of multiple websites which rank college majors by popularity shows that both Liberal Arts & Philosophy are among the most popular majors in the U.S. Also included were Psychology, English Literature, History, & Political Science.
Forbes publishes a list of the lowest paid college majors in the U.S. and guess which majors made the list? These majors may be fun & interesting, but they are practically useless when it comes to obtaining employment. Among those few students that do find employment in their chosen field, wages & benefits tend to be at the very low end of the spectrum.
Why is it so difficult to find employment in these fields and why are these majors paid so little? Let’s go back to my very first economics class; ECON 100 – Introduction to Economics.
The cornerstone of economics is The Law of Supply & Demand. Colleges are producing tens of thousands of Philosophy majors every year. Thus, there is a large supply of Philosophers available to hire each year. A quick search of several major job sites shows that there are currently 0 employers hiring for the position of Philosopher. Thus, there is no demand for Philosophy majors. The Law of Supply & Demand states that when there is a large supply and low demand, prices will go down; i.e. wages & benefits will be low. Philosophy degrees are the most dramatic example, but large supply with little demand is the same for all of the majors listed above.
When I was in college at the University of Alaska Fairbanks (Go Nooks!), the school hosted a job fair every semester. The concept was simple; invite employers searching for new graduates to come on campus, promote their organization, accept resumes, conduct interviews, & hire new graduates. The student center was usually full of recruiters for these events. It’s been a while, but I cannot recall seeing a single Philosophy recruiter, or English Literature recruiter, History recruiter, etc … On the other hand, I do recall seeing a lot of students with those majors struggling to find any employer who wanted to accept their resume or interview them for a job. Those job fairs were Supply & Demand in action.
Luckily, The Law of Supply & Demand also says that when demand is high and supply is low, prices will rise; i.e. wages & benefits will be high. Going back to those job fairs; one of my best friends served in the Army with me. We then went to college together & graduated at the same time. He majored in Petroleum Engineering. As I recall, when we graduated, there were only 4 students who had earned a degree in Petroleum Engineering, but there were 16 employers competing to hire those 4 graduates. My buddy signed a contract to accept a six-figure job ($100,000+) 3 months before he graduated! That is also Supply & Demand in action.
So how can we help set the young people we love on a course to future financial success? The internet is full of information, so why not start by looking there? Forbes & Kiplinger both have current lists of the fastest growing occupations in the U.S., as do many other companies.
Is it any surprise that occupations such as Registered Nurse, Dental Hygienist, Financial Advisor, & Computer Systems Analyst are some of the fastest growing occupations? It’s not to me. Those people have hard skills that are in high demand. A quick internet search can yield a pretty good list of potential college majors that may help your student land a job some day.
Look at several different reputable sources. US News & World Report has an entirely different list. By cross-referencing different sources, you can build a really good & really long list.
How about wages & benefits? Securing a job isn’t the goal. Securing a good job is. Again, the internet can provide the answers. A quick search will return multiple reputable sources.
US News & World Report publishes a list of the 25 highest paying occupations in the U.S. It is composed entirely of medical occupations, business occupations, & engineering occupations. As before, cross-reference multiple sources. Forbes publishes a list of 20 occupations, many of them different from those reported by US News.
So now you’ve created a list of the occupations with the highest demand; i.e. it will be much easier for your graduate to secure a job. You also have a list of the highest paid occupations; i.e. good jobs.
Why not cross-reference your two lists? Find high paying jobs that are also in high demand. Wouldn’t it be great if you could steer your student to a good job that’s in high demand? Just imagine your student landing a high paying job before she graduates!
As you proffer words of wisdom, just remember that the major your student selects, the major you steered her towards, may not be available close by. It may not even be available in your state.
Remember my friend the Petroleum Engineer? Petroleum Engineering is on most lists of the highest paying occupations, but it is only offered as a major at 25 universities in the United States. There are over 1,400 colleges & universities in the U.S., but only 25 offer a degree in Petroleum Engineering. If you and your student both agree that she will become a Petroleum Engineer, then she will probably have to relocate.
Be careful what you say to your student, because they are listening and your advice will either haunt them or reward them for the rest of their lives.
Sapiat Asset Management is an independent registered investment advisor, specializing in financial planning based, asset management for Gen X Individuals & Families and their Trusts & Businesses.