CHAPTER 5

Trap One: Your Major Determines Your Long-Term Earning Potential

Nothing in this world can take the place of persistence. Persistence and determination are omnipotent. The slogan ‘press on’ has solved and always will solve the problems of the human race.

—Calvin Coolidge

Georgetown University’s Center on Education and the Workforce and the National Association of Colleges and Employers (NACE) periodically publish reports that proclaim students who major in architecture, engineering, or computer science have higher starting salaries and lifetime earnings compared with all other majors.¹ Statements such as “petroleum engineering majors made an average of $135,754 a year by their mid- to late 20s—more than any other major” and “a college major isn’t destiny but it will have critical economic consequences for the rest of your life”² both contribute to the “your major determines long-term earning potential” mental trap. According to this line of thinking, every college student should major in engineering, accounting, or architecture. These majors tower above all others and will provide a lifetime of riches, exemplary working conditions, and unlimited happiness. This mental trap also suggests that students who major in subjects such as history, English, sociology, or other “worthless” majors are doomed to a below average earnings, miserable working conditions, and a lifetime of misery. This conclusion, and its evidence to support it, remains far from logical for a variety of reasons. A closer examination of the research paints a far different picture that is more inclusive of the many factors that determine long-term earning potential.

First, while it may be constructive to know the salaries of recent graduates per major, it is equally destructive in the simple fact that not everyone wants to study engineering, accounting, or architecture. There are, after all, over 1,500 different majors being offered at higher education institutions across the country. Should we dismantle all but the most “practical” of majors? For the record, no, we should do no such thing. Highlighting high salaries at the cost of others is demeaning, gratuitous, and unnecessary. What are the education, sociology, or art history majors to think when they read about the high salaries of mechanical engineers? More importantly, what is the message we are sending education, sociology, or art history majors, and others who have chosen to study other disciplines? Are we to tell students that they have little value to offer this world because of their low salary compared with the engineer? Of course not, as that would be absurd. A yearly report detailing how certain majors earn more than others is akin to comparing temperatures in Minneapolis and Miami during each February. It is typically below freezing in Minneapolis and above 60 in Miami. Should everyone move from Minneapolis to Miami? Suggesting such a move is offensive on many levels. Telling everyone to major in engineering to earn a high salary upon graduating college is equally offensive. It also provides a tremendous disservice to students because the evidence surrounding long-term career earnings paint a different picture. When comparing incomes at mid-career, the research suggests those who lagged behind certain majors upon graduation actually catch up or surpass those who had a high salary earlier in their career.

When considering the nuances involved with long-term earning potential evidence suggests that “perceptions of the variations in economic success among graduates in different majors are exaggerated. Given a student’s ability, achievement, and effort, his or her earnings do not vary all that greatly with the choice of undergraduate major.”³ “Research demonstrates that while science, math, and engineering majors earn more on average than do those with other degrees upon graduation,⁴ over time liberal arts graduates close the earnings gap with those who majored in professional or pre-professional fields.”⁵ While disparities do indeed exist in the beginning of one’s career when certain majors are compared with others, “such financial disparities grow less pronounced over time as the 30 percent gap that separates academic and career-oriented majors at the start of their careers nearly vanish nine years later.”⁶ A study by the Association of American Colleges and Universities (AAC&U) found that upon graduating with a bachelor’s degree (age 21 to 25), humanities and social science majors earn $26,271 a year, while science majors make about $25,986, and professional and preprofessional majors make $31,183.⁷ Another study found that history majors who pursued careers in business ended up earning, on average, just as much as business majors by mid-career.⁸

Those who push students into a “practical” major ignore the simple fact that a career spans decades. Starting salaries are indeed important, but they are merely one factor in a very dynamic equation of elements that construct a career built on purpose, leadership, and service. For students majoring in one of the perceived “worthless” subjects such as history, English, or psychology, it is important to remember the observation of Al Lee, director of qualitative analysis at PayScale “With a liberal art’s degree, it’s what you make of it. If you’re motivated by income, then there are certainly careers in psychology that pay as well as careers out of engineering.”⁹ Since no one degree is necessarily better than another when moving up the corporate ladder or earning potential,¹⁰ it is important to remember that “education is an important determinant of income but it is less important than most people think.”¹¹ As one observer noted, “the real world doesn’t care about your degree as much as your work ethic and attitude.”¹² “Focusing solely on one’s major as the lone causation for career success is the first mental trap and ignores a myriad of other factors such as geography, grit, an ability to market your value, demonstrated career preparedness, and the fact that salary is just one of the many elements of employee satisfaction.”

Geography

When it comes to launching and navigating, your career geography plays an important role. When proponents of specific majors ignore geography, they are missing an important factor that affects the ability of workers to find jobs that match their skill set. Looking for work in large urban areas can give workers a better chance to find a job that fits their skills.¹³ Additionally, in terms of salary and long-term career earnings, where you live often matters more than what you have on your résumé.¹⁴ Upon analyzing two decades of data from more than 200 cities, Rebecca Diamond, an assistant professor of economics at Stanford Graduate School of Business, found that college graduates are increasingly clustering in more expensive cities that offer more amenities such as restaurants and cultural attractions, better parks, less crime, and less pollution. To help recent college graduates identify key geographical locations, top 10 lists of cities to launch a career are now commonplace.¹⁵ Researchers at Harvard University and the University of California-Berkeley concluded that place matters when it comes to social mobility. The researchers identified two types of mobility: absolute upward mobility that measures how individuals stack up to their parents while relative mobility measures their chances of moving up or down the income ladder relative to their peers.¹⁶ Exploring employment opportunities in large urban areas provides individuals with a “greater chance of finding a job that fits their skills since the larger the size of the city, the more likely grads will find a job that matches their skills.”¹⁷ As one observer noted, “students who do best are those who will relocate to cities demanding educated workers.”¹⁸

Recent college graduates need to understand that where they work influences their income potential. One might have a supposedly lucrative engineering degree but that might be of little value in an economically depressed geographical location. They also need to understand larger macroeconomic trends. For example, many of the “biggest U.S. metropolitan areas have yet to recoup all the lost jobs from the Great Recession and almost a third have failed to return to previous levels of output.”¹⁹ Moreover, recent research on 100 urban areas revealed an “economic patchwork in which the legacy of boom and bust hangs heavily over cities in Florida and inland California, while at the other end of the spectrum, technology and bioscience-focused cities such as Austin, Texas, San Francisco, and Raleigh, North Carolina have comfortably surpassed their previous peaks.”²⁰

Another study suggested that recent college graduates consider five variables before choosing a geographical location: size of millennial population between 20 and 34 years of age; job openings per 1,000 residents; lifestyle and entertainment opportunities; unemployment rate and the median cost of a two-bedroom apartment. Using this formula, the data suggested that Washington, DC, ranked first, with Minneapolis in second, Denver, third, and San Francisco in fourth place. The top three most populous cities, New York, Los Angeles, and Chicago, failed to make the cut.²¹

It is also important to realize that the cost of living differs between locations. For example, if your salary is $35,000 in Mobile, Alabama, and then you move to Los Angeles, California, your new salary will probably be $39,504. However, since the cost of living is greater in Los Angeles you would have to earn a salary of $51,720 to maintain your current standard of living.²² In short, place matters. Where you launch your career factors into your income potential as does the geographical location where you decide to spend long period of your career. Just as geography plays a critical factor in your long-term income potential, so does your ability to overcome obstacles by demonstrating grit.

Grit

While it is important to understand the geographical imprint on salary, it is equally significant to realize that role that grit plays in income potential and career success. Even the most focused senior in college who knows exactly what they want to do after graduation is going to encounter obstacles. You would be hard pressed to find any individual who has achieved even the slightest degree of success who did not encounter difficulty along their journey. Therefore, students across every academic major need to develop a strong sense of grit to overcome obstacles. Author Kevin Daum suggests that there are external obstacles outside of your control such as the economy, internal obstacles that are generally one-time issues but you have direct control over them, such as time management, and habitual obstacles that reflect how people get in their own way and can only be removed with behavioral change. Since these obstacles happen to fall into everyone’s path to success, any discussion of long-term income potential that ignores grit would be woefully incomplete and misleading.²³

There has been substantial research with regard to grit during the last two decades. Numerous researchers have concluded that getting to the corner office, long-term earnings potential, and climbing up the corporate ladder all have more to do with grit than graduating with a specific degree. Living a life of leadership, purpose, and service also requires grit. Grit is by far the most important characteristic one needs to demonstrate time and again in order to translate the vision they have for their life into reality. MacArthur Fellow Angela Duckworth, a psychology professor at the University of Pennsylvania, defines grit as “the tendency to sustain interest in and effort toward very long-term goals and equips individuals to pursue, especially challenging aims over years and even decades.”²⁴ Duckworth noted that people who “accomplished great things often combined a passion for a single mission with an unswerving dedication to achieve that mission, whatever the obstacles and however long it might take.”²⁵ Duckworth’s observation after decades of work is synonymous with the research conducted by others.

In Growth Mindset: The New Psychology of Success, Stanford University psychology professor Carol Dweck defined two types of mindsets: fixed and growth. “When wrestling with a problem, a fixed mindset says we’re failing and not cut-out for the job. A growth mindset believes we’re getting closer to the solution and gaining mastery.”²⁶ Dweck’s research shows that the brain develops new “neural pathways if it perseveres through a problem rather than throwing in the towel.”²⁷ Malcolm Gladwell’s Outliers: The Story of Success studied world-class performers such as The Beatles, who demonstrated grit by spending 10,000 hours working at their musical performance in order to arrive at the top of the charts. Geoff Colvin’s Talent is Over-rated: What Really Separates World-Class Performers from Everybody Else concluded that “everyone who has achieved exceptional performance has encountered terrible difficulties along the way. There are no exceptions.”

Dweck, Gladwell, and Colvin all provide substantial evidence that demonstrating grit is a major factor, if not the most important one, in determining one’s ability to succeed in life and work. As Robert Kaplan noted in the Harvard Business Review, “Fulfillment doesn’t come from clearing hurdles others set for you; it comes from clearing those you set for yourself.”²⁸ One such hurdle that many people set for themselves is thinking that since they lack grit, there is nothing they can do. That is simply untrue. If you feel as though you are lacking in the ability to persevere, rebound from failure, or maintain energy over a long period of time, you can indeed learn these skills, traits, and habits. “Effort, planning, persistence, and good strategies are what it really takes to succeed. Embracing this knowledge will not only help you see yourself and your goals more accurately, but also do wonders for your grit.”²⁹ Rest assured that you will need grit if you want to overcome a serious obstacle that many college students and recent graduates struggle with: learning how to market your value. Students from every academic major need to learn how to communicate their value to prospective employers or graduate school committees.

Marketing Your Value

If you have selected a viable geographical location and developed a strong sense of grit, both will provide little use if you are unable to market your value to a complete stranger. “The real challenge for recent college graduates is deciding how to apply their fundamental skills to the line of work you choose for yourself. But take note: employers aren’t going to figure it out for you. You have to figure it out for yourself.”³⁰ The key is that you have to differentiate yourself from other college graduates, and more education or fancier degrees don’t do it. “Being average just won’t earn you what it used to. It can’t when so many more employers have so much more access to so much more above average cheap foreign labor, cheap robotics, cheap software, cheap automation, and cheap genius. Therefore, everyone needs to find their unique value contribution that makes them stand out in their field of employment.”³¹ “Define yourself and your purpose. Broadcast your strengths. Give people a reason to pay attention to you. It’s your choice to do something worth talking about or not. The only people who stand out are those who want to.”³²

As a professional competing in today’s challenging economy, you need to position yourself in the minds of prospective employers in a clear, concise, and compelling fashion. Remember, no one will advocate for you. If you want to achieve and sustain professional growth, you must work hard at making sure that you position your value as effectively as possible. Professionals at every level have an expectation that their degree or experience will have immediate and obvious value in the job market. Please understand that this is far from reality. Your degree, experience, and current position are important but what will have a greater impact on your ability to navigate your career is your ability to market your value. While it remains challenging to find employment, the real challenge is deciding how to position your value in the marketplace, so that potential employers understand what it is you have to offer. This is true for the online world as well as the off-line environment in which you live and work.

The off-line environment consists of a variety of settings such as networking events, informal gatherings of friends, and at work itself. Perhaps the most important off-line event, however, is the job interview itself. According to human resource professionals and hiring managers, having a candidate present clearly in an interview is taking up more time these days. Too many candidates are talking in circles, not listening or following directions and rambling when they are asked how they can add value to the hiring company. Can you learn to communicate your value and position yourself in the mind of the prospective employer with purpose and intention? If not your ability to launch a career will be at a severe disadvantage regardless of what school you attended, what your grade point average (GPA) was or what you majored in. No one will care about any of that if you cannot position your value.

Let’s look at it another way. You may be able to write a 20-page research paper, but can you discuss your value in bullet points and synthesize information to convey quickly with impact?³³ Amazingly, employers are now reporting that they’ve seen recent college grads “text or take calls in interviews, dress inappropriately, use slang or overly casual language, and exhibit other oddball behavior.”³⁴ You need to realize that the interview is still a traditional, and very professional, environment. While texting, dressing inappropriately or using casual language may be completely appropriate outside the interview; you need to realize that all of those actions, as well as your words, position yourself in the mind of that complete stranger sitting across from you wondering if you have achieved the level of career preparedness necessary for his or her organization.

Demonstrated Career Preparedness

Long-term income potential also stems from the ability to successfully demonstrate your career preparedness. Unfortunately, many college graduates mistake their diploma for career preparedness. Many college graduates fail to understand how life on campus is fundamentally different from the everyday routines of a workplace. Acquiring a college degree might provide you with certain academic credentials, professional skills, and personal traits, but “a degree document is no longer a proxy for the competency employers need. Too many of the skills you need in the workplace today are not being taught by colleges.”³⁵ In fact, you need to understand that “if you continue to have the same expectations of your workplace and employer that you did of the campus and professors, you will be greatly disappointed and worse, yet, could jeopardize your career.”³⁶ One such way that college graduates jeopardize their career is failing to understand and address the perception gap that hiring managers have of younger generations. In short, you may have selected what you perceived to be a relevant major, but the person interviewing you for a position considers you ill prepared. Student misconceptions about the importance of school prestige, the cachet of professional connections, and the weight employers give to GPAs are the three biggest misconceptions students have about their employability. When it comes to business basics, students’ assessment of their own skill mastery exceeded hiring managers’ assessments of recent graduates they have interviewed, on every measure.

In one study, nearly 70 percent of corporate recruiters said that their company has a hard time managing its younger generation of workers who were perceived as lacking in a work ethic, unwilling to pay their dues, and simply harder to retain.³⁷ Over one-third of business leaders and recruiters give recent grads a “C” or lower for job preparedness.³⁸ A recent survey of U.K. companies found that only 1 in 3 employers (23%) believe that academic institutions are adequately preparing students for vacant roles in their organizations. Employers cited problem-solving, creative thinking, and oral communication as the top three workplace skills they think recent college graduates lack.³⁹ And when it comes to business basics, students overestimated their skill mastery on every measure. Fewer than 2 in 5 hiring managers (39%) say the recent college graduates they have interviewed in the past 2 years were completely or very prepared for a job in their field of study, in general. This is in sharp contrast to the 50 percent of college students who rate themselves in the same terms.

Another study illustrates the perception gap that college students and recent graduates need to address very clearly:

   •   14 percent of HR professionals perceived Millennials to be less people-savvy but

       ○   65 percent of Millennials surveyed think they excel in this skill

   •   86 percent of HR professionals said Millennials were more tech-savvy than other workers but

       ○   35 percent of Millennials rated themselves this way

   •   1 percent of HR professionals believed that Millennials demonstrated loyalty but

       ○   82 percent of Millennials believed that that are loyal

   •   11 percent of HR professionals defined Millennials as hard-working but

       ○   86 percent of Millennials reported themselves as hard-working⁴⁰

In order for college graduates to address this perception gap, reach their potential, and establish new professional development goals, they need to “filter out peer pressure and popular opinion; assess their own passions, skills, and convictions; and then be courageous enough to act on them.”⁴¹ Learning how to conduct themselves in professional networking opportunities both off-line and online should be a priority for every undergraduate. Networking is a priority for all professionals regardless of age, location, industry, position, or educational background. Through serendipity and design, networking should be done on a regular basis in order to extend our web of contacts across geographies, industries, and positions. Networking can help you land a job, earn a promotion, have the lead for an important project, and maintain the position of a valuable asset to your organization and perhaps even industry.

To stress the critical importance of networking in order to navigate your career, consider the following three statistics:

   •   80 percent of available jobs are never advertised, so it is important to view networking as a routine function, so that you can identify those unadvertised opportunities that could be just what you were looking for.⁴²

   •   The average number of people who apply for any given job is approximately 120. Approximate 20 percent of those applicants get an interview.⁴³

   •   To cut through the clutter of hundreds or even thousands of submissions, “many large and midsize companies have turned to applicant-tracking systems to search résumés for the right skills and experience.”⁴⁴ Working your network can help get your résumé to a person instead of going through the software where there is a nominal chance of being found.

You might have an excellent GPA but can you be found on LinkedIn? You might have chosen the “right major” but is your LinkedIn profile updated on a regular basis? LinkedIn is one of the many social networking services offered today. Focused on professional networking, LinkedIn reports over 259 million users in more than 200 countries. “An astounding 94 percent of recruiters used or planned to use social media in their recruitment efforts last year. That’s an increase of 16 percent since 2008. And 78 percent of recruiters made a hire through social media in 2013.”⁴⁵ If you are not on LinkedIn or other critical social media platforms, recruiters will be unable to find you.

Salary Not Only Factor for Job Satisfaction

If you have selected a good geographical location for work, maintain a high level of grit, market your value in a compelling manner and demonstrate significant career preparedness will you be satisifed at work? If you have done all of those things and selected one of the so-called “valuable” majors, will you be satisfed with your work? The short answer is probably not. Employee satsifaction around the globe is terribly low. According to statistics gathered by Gallup, “30 percent of employees in the United States, and 13 percent of employees worldwide, are enagaged in their jobs.”⁴⁶ Engaged is defined as “employees who work with passion and feel a profound connection to their company. They drive innovation and move the organization forward.”⁴⁷ As one researcher noted, “even if you are lucky enough to have a job, you are probably not very excited to get to the office in the morning.”⁴⁸ Once again, proponents of declaring a “practical” major seldom mention the value of enagement in the workplace.

A variety of issues contribute to this lack of employee engagement. The advent of technology, the rise of global hyperconnectivity and an ever increasing reliance on computer software and robots replacing human workers continues to push productivity skyward creating new levels of stress in the workplace. “Demand for our time is increasingly exceeding our capacity—draining us of the energy we need to bring our skill and talent fully to life.”⁴⁹ According to one report, 42 percent of American workers left a position because the level of stress was too high.⁵⁰ “People feel stressed out because there’s that continuing pressure to do more with less. Workers feel pressure to get more accomplished.”⁵¹

While demands on a worker’s time contribute to employee disengagement and dissatisfaction so too does stagnant wages. “Though productivity (defined as the output of goods and services per hours worked) grew by about 74 percent between 1973 and 2013, compensation for workers grew at a much slower rate of only 9 percent during the same time period.”⁵² While the general assumption is that college graduates are immune to downward wage trends, recent data suggest otherwise. Between the bursting of the tech bubble in the late 1990s and then by the 2008 global recession 70 percent of the nation’s college grads have had their after-inflation hourly wages decline since 2000.⁵³ Despite these dire numbers for most American workers, the link between high salary and job satisfaction is tenuous at best.

In his 1967 publication The Motivation to Work, Frederick Herzberg identified two different categories of factors affecting the motivation to work: hygiene and motivation. Hygiene factors include extrinsic factors such as technical supervision, interpersonal relations, physical working conditions, salary, company policies and administrative practices, benefits, and job security. In comparison, motivation factors include intrinsic factors such as achievement, recognition and status, responsibility, challenging work, and advancement in the organization. Herzberg’s theory postulates that only motivation factors have the potential of increasing job satisfaction. “The results indicate that the association between salary and job satisfaction is very weak. When employees are focused on external rewards, the effects of intrinsic motives on engagement are significantly diminished. This means that employees who are intrinsically motivated are three times more engaged than employees who are extrinsically motivated (such as by money). Quite simply, you’re more likely to like your job if you focus on the work itself, and less likely to enjoy it if you’re focused on money.”⁵⁴

Daniel Pink’s Drive: The Surprising Truth about What Motivates Us makes the same observation. While many people believe that the best way to motivate others is with external rewards like money, the reality is that high performance and satisfaction is rooted in the three elements of true motivation: autonomy, mastery, and purpose. When you are discussing potential employment opportunities with your child, do you focus solely on salary and the ability to repay college loans or do you also consider the myriad of other factors that go into job satisfaction? If you are solely focused on salary, what do you think that does to your child’s ability to engage in self-determination? Finally, when discussing work, recall the words of 19th-century social reformer John Ruskin “In order that people may be happy in their work, these three things are needed: they must be fit for it, they must not do too much of it, and they must have a sense of success in it.”⁵⁵