Once I started researching this topic I was amazed at how little information there was. Most of the information I did find, was written by home-schoolers trying to justify their position. Now, I do not necessarily disagree with home schooling, I have a very dear friend that home schools her children. I do have concerns on the social growth of home schooled children, but that is not for me to worry about… it is for their home schooling parents/teachers.
I did find an enlightening article written by one home school advocate that actually breaks-down the economic benefits of home schooling. It does in a very one sided, biased view offer a slight look into the salary of a non-college bound student. For that it helps with my research. Mark writes a great article called Economics 101: College vs. Apprenticeship. In this he states, “Let’s compare the costs and income for two different situations of your typical college age student – Mr. Worker works at an entry level job full time while Mr. Student attends university full time in the fall and spring while working at an entry level job for 3 months in the summer.”
He goes on to elaborate, “Mr. Worker is an apprentice in a trade and nets $10 an hour*, 40 hours a week, 50 weeks a year, so averages $20,000 income each year. Mr. Student makes $10 an hour, 40 hours a week, 12 to 13 weeks a year so averages $5,000 income each year.
Mr. Student’s parents pay an average $583 each month for 4 years for a total of $28,000 for his 4 years at the university. Mr. Worker’s parents contribute $583 month to a typical mutual fund account averaging an 8% annual return (8% is a low estimate of the average long term annual gain for a low risk U.S. mutual fund). At the end of the 4 years, the total value of these monthly payments is 0 for Mr. Student (the college has it all) and $33,000 for Mr. Worker (amount contributed each month plus interest).
Since Mr. Worker is living at home, he saves all his income in a typical mutual fund account averaging an 8% annual return. Saving $1666 a month for 4 years in the account results in a balance of $94,000. Mr. Student saves his 3 months of income each year (which is 1/4 of Mr. Worker’s) in an equivalent account with an 8% annual return, which results in a balance of $24,000. Note that in both cases the parents are paying all living expenses and they are assumed to be the same.
So at the end of 4 years, Mr. Student has a college degree and $24,000 in cash, while Mr. Worker has 4 years experience in his trade plus $127,000 in cash (his income plus his parent’s contribution). Both students move out of their parents’ home and begin their career using what they’ve learned in 4 years. They keep their cash in the investment accounts earning an average of 8% annually. Mr. Student has $103,000 less money than Mr. Worker. He must earn more than Mr. Worker does in order to catch up and surpass him. How much more and for how long?
The $103,000 growing at 8% annually grows to $229,000 in 10 years. If Mr. Student saves an extra $1,250 each month (in the 8% account), he will reach the $229,000 in 10 years. $1,250 monthly is $15,000 a year, so if Mr. Student’s after-tax salary exceeds Mr. Worker’s by 15,000 each year then Mr. Student is better off financially. Note that Mr. Student will likely be in the 25% tax bracket, so he must earn $20,000 extra, before taxes, to net the $15,000 to save and invest.”
Read the entire article by clicking here.
Now though it does in some way, successfully breakdown the economics of the two students lives, it does not look long term. While reading this I actually asked myself why someone would want to go to college. If they just do as it is said here they would be fine, have money and a great retirement. Then I ask, “What 18 year old lives at home banking every cent they have and reporting to mommy and daddy?” What about later in life when they enter their 30′s and have a family to support? How do they fair when someone fresh out of college is in line for the same job, and asking for less money? Well, then…they end up unemployed.
Unless they find a manager that takes their experience into account. I was always one of those managers. I valued each person on what they could bring to the table, not how much education they had. Coming from an era that valued the hard work involved to learn and work your way up to the top I too valued someone that was self taught, hard working and had a diverse background. I found that they, at times, brought more to the table then the fresh new hire out of college with only one perspective.
I think that more people should take this into account before they hire. In this job market employers are demanding higher education for less money, but lost in the shuffle are the over employable. The ones that are told, “I am sorry but you are over qualified” , based not on their degree but their experience.
This is a resource that is under utilized in the job markets today…and quite frankly a reason why there is an issue with customer satisfaction. Gone are the days of people caring about their jobs, taking pride in their work and working hard for their money. The “old timers” that have had to scrape their way to the top have learned of the pride associated with that hard work, and that in turn translated to their clients and client satisfaction.
My marketing advice for this month… find the untapped resource available to you, and set it free! Show it the way to success and watch your company prosper. Look at the why’s and not the how’s, this will bring you the greatest growth.
© 2011, Claws and Paws By Kymber. All rights reserved.
