An important issue in business ethics is whether participants in any economic exchange have full autonomy. This means that any market transaction should be based upon the informed consent of all the participants. But while academic business ethicists have held that this should characterize business generally, they have seldom seemed concerned with informed consent when it comes to their own business - higher education. Students traditionally have had to select majors without detailed information about average salaries and job prospects for graduates with degrees in those various majors.
But a massive new study on the different economic payoffs of college majors has just been published and is readily available on the Internet. Titled “What’s It Worth? The Economic Value of College Majors,” it was done by economists Anthony P. Carnevale, Jeff Strohl and Michelle Melton of the Center on Education and the Workforce at Georgetown University. It is well worth reading by all prospective college students and their parents.
Let’s begin with the good news. The report confirms the widely held belief that, on average, getting a bachelor’s degree of any sort results in higher lifetime earnings, even when you factor in the costs of the education itself and the lost wages for the years spent acquiring it (the “opportunity costs”). But the various subject majors vary wildly in income potential, with some majors leading to more than three times the lifetime earnings that others do.
The report examines more than 170 majors in 15 categories (such as arts, business and social science) using data only recently available from the U.S. Census. The findings are fascinating, in some cases not surprising, but in some cases very surprising.
Let’s take the 10 majors with the lowest median earnings (for full-time work on an annual basis). These are, in order:
c Counseling/psychology ($29,000)
c Early childhood education ($36,000)
c Theology/religious occupations ($38,000)
c Human services/community organizations ($38,000)
c Social work ($39,000)
c Drama/theater arts ($40,000)
c Studio arts ($40,000)
c Communication disorders sciences ($40,000)
c Visual/performing arts ($40,000)
c Health/medical preparatory programs ($40,000)
On the other hand, the top 10 majors in terms of median earnings are, in order:
c Petroleum engineer ($120,000)
c Pharmacy/pharmaceutical sciences ($105,000)
c Mathematics/computer sciences ($98,000)
c Aerospace engineering ($87,000)
c Chemical engineering ($86,000)
c Electrical engineering ($85,000)
c Naval architecture/marine engineering ($82,000)
c Mechanical engineering ($80,000)
c Metallurgical engineering ($80,000)
c Mining/mineral engineering ($80,000)
Students majoring in humanities - in which category my discipline falls - average a middling $47,000 in median annual earnings. They actually do rather well in the workplace, winding up in white-collar and teaching jobs.
The study sheds light on a persistent puzzle that has exercised feminists for years. Women outnumber men in college by a 56 percent to 44 percent margin nationwide but still lag behind men in average salaries. However, this report shows that while there are fewer men on campus, they tend to major disproportionately in the higher-paying occupations, while women tend to choose disproportionately the lower-paying professions. This explains much (though not necessarily all) of the gender gap in pay.
I have only scratched the surface of this invaluable study. The study includes information on earnings by ethnicity, on the percentage of individuals earning bachelor’s degrees who then go on to earn graduate degrees and the extra earnings those degrees bring, which industries employ the most workers by major, and employment rates by major.
All of this leads to an intriguing thought. We rightly require in major purchases that the sellers disclose important information to the consumer, such as loan terms or known property defects, and require that such disclosures be documented - typically by having the consumer sign forms acknowledging that he has read, understood and agrees to the terms of the sale.
Why not require all freshmen to take a one-day seminar about the findings outlined in this report, be given a copy of it and require that they sign off? Otherwise, we are allowing students to choose majors blindly, which is clearly unethical.
Gary Jason is a contributing editor of Liberty magazine.