Experts cite the pandemic and overconfidence as possible reasons
Students overestimated by 100 percent how much money they will make in their chosen career field, according to a recent survey.
The 2022 survey of 1,000 undergraduates asked them about their projected incomes.
“College students expect to make $103,880 in their first job, but the average starting salary is actually only $55,260,” reported the survey by Real Estate Witch and Clever Real Estate.
However, students in journalism programs were the “most delusional,” according to the survey; they overestimated their future salary by 139 percent.
Survey respondents in 2019 were off by only $11,000, an overshoot of 25 percent.
“The overestimate is largely based on the fact that wages/salaries have not kept up with the rise in the cost of living,” Danetha Doe, an economist for Clever, told The College Fix via email.
“Inflation rises 2-3% per year. Since 1970, wages/salaries have only increased by 0.3%,” Doe told The Fix.
Doe said the greatest difference between the expected salaries of 2019 and the expected salaries of 2022 is the pandemic and COVID shutdowns. The pandemic, according to Doe, worsened the “huge chasm between the cost of living and the average salary.”
Career coach says discussion needed on value of a college degree
A career coach and podcast host with Ramsey Solutions said parents and students should discuss realistic paths to achieving their career goals.
“College is not for everyone, so why pay tens of thousands of dollars for a degree when it might not be necessary?” Ken Coleman told The Fix through a spokesperson. He said parents and students should ask if college is the “only way.”
If the answer is no, then students could consider taking a gap year or look into trade schools and apprenticeship programs.
He agreed that the pandemic and COVID lockdowns could have contributed to the increase in unrealistic salary expectations between 2019 and 2022.
“Like it or not, the pandemic impacted all of us. Board meetings turned into Zoom calls, schools shifted to virtual classrooms, and the way we shopped even changed,” Coleman said.
“All this to say, the unknown has left a lot of variables up in the air for the last few years,” he told The Fix. “Students are graduating college and letting fear drive their unreasonable requests.”
The director of Georgetown University’s Center for Education and Workforce told The Fix that students must learn more about the values of their degrees.
“This [survey] speaks to the fact that students don’t have good information about the economic outcomes they can expect from their degrees,” Anthony Carnevale told The Fix through a spokesperson. Carnevale has served as an economic adviser to Congress and Presidents Bill Clinton and George W. Bush.
Carnevale believes we need to make resources available to college students to better help them with their salary expectations post-graduation.
“In terms of expected salary, there’s a lack of easily accessible information, and wage data are often reported as ranges,” Carnevale told The College Fix. “Students may look at those ranges and think they’ll earn at the top of the range, instead of the bottom. Another thing to consider is that the Great Resignation has shifted the power dynamic.”
He said workers have the upper-hand today, but that does not mean every student who graduates will come out making top dollar.
“Skill shortages and competition favor workers today. Students may hear or read that in the media and assume they’ll benefit from better jobs and increased wages, too,” Carnevale said.
Business professor said his students have more realistic expectations
Business, computer science and engineering students also overestimated their post-graduation salaries. However, computer science students were the least wrong, projecting they’d make 27 percent more than they really did.
However, a Drexel University business professor said students in these fields have more realistic expectations, according to his personal experience.
Professor Stanley Ridgley told The College Fix:
I deal with students across a range of disciplines – marketing, finance, accounting, operations, and such like, and a large number of computer science and engineering students who pass through our gates. I do not believe that these students exhibit an outsized expectation of their starting salary or salary after a year.
He said his students are “smart, savvy, industrious, and quite ambitious students who understand that the careers they have chosen involve wealth creation.”
Ridgley told The Fix his students understand that their degrees involve wealth creation, while students of other majors believe they should be paid for who they are, not by the job they can perform for their community.
He gave advice for students that want to enhance their earnings.
“Employers are looking for employees who can express themselves cogently, clearly, confidently, and logically,” he said. “And they want young people who can and will do this on behalf of the company and its clients as well.”
Employers also want employees “who understand how to work together in a team on collaborative projects. This collaborative spirit must be learned, and it can be difficult.”
He said these skills are “crucial in today’s workplace.”
MORE: Bill would tie Missouri higher education funding to graduate earnings
Editor’s note: The headline and article have been updated to say that the earnings were overestimated by 100 percent, not 50.
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