It used to be that to move up in the world, you needed a university degree. Then the rise of the ‘under-achieving high-school dropout turned billionaire entrepreneur’ took over as inspiration for a generation.
More recently, the lure of paid apprenticeships showed another way to early financial freedom through the trades. YouTube sensations shunning education showed short-term pathways to glory.
But whatever the current tide of opinion follows, one thing is certain: a university degree is still the ticket to a better life, according to new data released by Universities New Zealand – Te Pokai Tara – which shows that a typical graduate earns around $1.6 million more over their working life than a non-graduate.
“The findings suggest that it’s good to be educated and the more educated you are, the better. You’ll likely earn more money and have less chance of finding yourself unemployed,” says Universities New Zealand executive director Chris Whelan.
Taking people in fulltime employment at the time of the 2013 Census, those with a PhD (doctorate) were earning 22 per cent more than people with a masters or honours level degree.
Further, those with a masters or honours degree were earning around 9 per cent more than those with only a bachelor degree.Those with a bachelor degree were earning around 40 per cent more than those with only a high school qualification.
There are exceptions to the rule and some graduates with PhD’s in law earn less than Masters of Law because they’ve chosen to work in universities. Generally, the rule is the more educated you are, the more you’ll be earning.
And if you were swayed by the money – especially considering you may have taken out a considerable student loan – those studying health-related degrees, engineering and information technology are among those who can expect the biggest payoff.
“Even though job security doesn’t exist anymore, a university degree is still the best investment you can make in terms of career security,” says Whelan, who conducted the research after encountering myths around degree education. Example: ‘An arts degree is a waste of time’.
“Arts graduates actually make great analysts because of the great range of soft skills they learn, so you’ll often find arts graduates working in local government or teaching roles,” says Whelan.
W hile some businesses are stripping back the requirement for specific degree qualifications, a degree in any subject still shows an employer that you have communication skills and critical thinking, no matter what you’ve studied.
There are some, though, who suggest some subjects will be outdated by the time a person graduates. Whelan disagrees, arguing that even in IT degrees students are taught hundreds of programming languages. The goal is to teach graduates to go into different workplaces and pick up a computer language with their broad knowledge, rather than knowing only one programme.
He does admit not everyone is cut out for university life and trades still fill a vital part of the economy, as well as providing a good life for people who are happier working with their hands.
“A tradie can be straight into work out of school and get an apprenticeship so they are paid to learn at age 16. By contrast, an arts graduate might finish university around 20 years of age with a student loan of $14-20,000.
“However, fast forward a few years and the arts graduate will likely be better off than the tradie by the mid-30s. The tradie might be tiring of the work they do and looking instead for a maintenance-type position.”
Whelan says that even though a typical bachelor degree costs between $5000-$15,000 a year, the arts graduate will typically have lifetime earnings double that of those with a trade qualification. He’s quick to point out, though, that the payback isn’t merely financial.
“International research says non-financial returns to society of tertiary educated citizens are huge. A tertiary education is one of the most certain ways a person can rise up from whatever background they’ve come from, and the intergenerational benefits of the education are also something to take into account.”
So, even if you’re making enough money creating a stir in the virtual world with a popular blog, the statistics point to a tertiary education still being a way to set yourself apart in the highly competitive world of work in the long term.
by Danielle Wright