I posted about a Georgetown study on Higher Education ROI on our Facebook page a few weeks back and promised to follow up with a blog post. I think there’s a lot of interesting information here, and while it may be surprising at first to hear about Maine Maritime Academy and the pharmacy schools, it brought up another point that I’ve thought a lot about lately: that it’s important to realize that when we consider these issues, we are looking at averages.
It’s absolutely correct that the average income of a pharmacist is higher than the average liberal arts graduate. There’s a whole sub-set of fields like this - engineering is another great example - where the starting salaries are high and remain consistent, without much risk of the student ending up unemployed or underemployed.
However, averages don’t tell the whole story. How many engineers or pharmacists do you know in the top 1%? I almost feel badly writing this out because I do not think that high incomes should necessarily be everyone’s goal (I have a master’s degree in education for goodness’ sake!) but if we’re going to use salary information as a ranking metric, I think we need to differentiate between the chance of achieving financial stability and the chance of becoming a high-income earner.
I know that the definitions of these are probably different for everyone, but let’s say for our purposes, a financially stable professional might bring in about $100k in the DC area and a high-income earner might bring in about $300k+ in the DC area. Give or take.
How would these rankings look if instead of taking the average incomes of graduates - which clearly speak to stability - they took the percentage of alumni earning more than $300k? Oh, and if they performed cost-of-living adjustments (I can dream, right? All my readers know how passionately I feel about cost of living adjustments!). I think this would give us very different results. No way would the Maine Maritime Academy come out on top, in my opinion - or the pharmacy schools.
Yes, there’s no question that liberal arts degrees bear more risk as opposed to pre-professional degrees. No doubt about it. But I really do believe that by and large, they also offer the most reward. When I look at myself, an English major with a master’s degree in education, I know that on paper I should probably be making a tenth of what I actually earn. On the other hand, though, maybe it was my relatively low income potential that led me into entrepreneurship. If I had a solid six-figure engineering job at age 25, would I have taken the risk of losing that income? Again, just speaking for myself here, but I don’t think I would have.
I think that the Wealth-X list provides a good point of comparison that comes a little closer to the point I’m trying to make, although we have to keep in mind that people with a net worth exceeding $30m are not exactly the norm. But I do enjoy this statistic: “University of Chicago and University of Virginia share the distinction of having the most UHNW [ultra high net worth] alumni with self-made wealth.” YES! That is right about what I would have guessed.
Now, how about just regular high net worth alumni? Time for someone to perform that study!