every day more companies are announcing that they will no longer be requiring a college
degree to get a job with them more than half of the Americans that do have a college degree are
now working in jobs that don't require one and the stigma around not working a white collar job
has almost been reversed as skill treats people have started to significantly out earn their
office dwelling peers the decision to commit to an expensive degree is one that less people are
making every year and this is either a really good thing or a really bad thing so that has
led some companies to drop a long-standing requirement a college degree more and more
Americans are asking themselves is a college degree still worth it student of college is
absolutely insane he'll be a senior next year and then we'll have to be dealing with that and we've
been looking at colleges job it appears that some companies are now hiring applicants who
don't have a degree it's leaving many to wonder is a degree really necessary a college degree
used to all but guarantee an upper middle class lifestyle in America and that's because they were
extremely rare according to data collected by the US Census Bureau and compiled by statista
only 7.7% of Americans aged over 25 had a college degree in 1960 in 2022 37% of the population had
one this was almost a 500% increase in the number of college graduates that companies could pick
from now if you do have a college degree and think that you are still in the elite minority well let
me knock you off that high horse according to the National Bureau of economic research fewer than
2/3 of Americans are part of the workforce so a college degree is nothing special anymore if you
are a worker that wants bargaining power in their career you really only have two options your first
option is to pursue an additional degree that once again makes you a rare and valuable hire
but even that is getting harder now as of 2019 13.1% of Americans have a master's degree or
higher qualifications that means nearly twice as many people have a master's degree today than had
any deg degree in 1960 degrees became too common in the workplace so people responded by getting
even more degrees according to the workplace analytics from pay scale the average salary
for someone with a master's degree is $83,000 a year which is about a $20,000 increase over
the national average for a full-time employee according to the Education data initiative the
average cost of a master's degree is almost $60,000 the degree should pay for itself over
a long career but the numbers alone don't tell the full story story if you have the skills and
the motivation to get an advanced college degree you are probably earning more than the average
full-time American anyway so the earnings Gap is smaller than you might expect if the thing
you want most from a job is a high income and career stability there are better options than
diving into the arms race of qualifications the collapsing relevance of a college degree
is either going to be a really good thing or a really bad thing for your career and since for
some reason people think that we are too negative here at how money works we are going to start
with the good news for first college degrees are expensive and most students are paying for their
admission with loans that will take decades to pay off student loans also negatively affect
other Financial objectives like qualifying for a home loan or starting a business the trade-off of
a college degree is that eventually senior White Collar jobs pay more than senior Blue Collar jobs
but that doesn't really matter anymore college has become so expensive that the financial Head Start
From not attending is getting larger and larger and with the flood of college graduates fighting
for jobs there no guarantee that you will ever get into one of those senior white C positions that
make it all worthwhile if you get a trade instead you can get paid for training and you can earn an
above average income as soon as you are qualified trade jobs also make it much easier for you to
transition into being a business owner if you work as a business analyst you can't really start your
own company unless you have a contact Network good enough to land you consistent Consulting
roles if you work as a skilled Tradesman starting a business is still going to be hard but you can
do it reliably much earlier in your career if working with your hands is not your thing then
jobs in sales have potential earnings caps much higher than even senior management jobs even if
you simply want a normal salaried office job the declining relevancy of a college degree
could be a good thing for you a report by the Harvard Business Review found that as University
qualifications became more common recruiters and employers increasingly demanded them regardless of
whether they were actually required for a specific job you'd probably want your doctor to have gone
to medical school but does it really matter if someone managing a marketing campaign has a
Bachelor of Arts degree the good news is that more companies are dropping the rigid requirements for
a college degree because most skills are learned on the job anyway the same report from the Harvard
Business Review found that in the age of technical disruption and unpredictable job Evolution most
degrees didn't teach skills that were relevant to most people's work the report also found that
companies still requiring their workers to have a piece of paper as a prerequisite for leaning a
job or hurting themselves by artificially limiting their candidate pool or paying a premium for work
that could be done by anybody this was a report published by a school famous for selling those
pieces of paper when they talk about the workplace benefits of overlooking a college degree you can
probably trust them it's true more than half of American workers with a college degree right now
are not working in roles that require a degree on paper but for every person working a six- figure
coding role at a Forward Thinking Tech start-up that dropped the college degree requirement there
are hundreds of workers with a 4-year degree under their belt who are waiting tables because
they couldn't find work anywhere else sure they are both technically working in roles that don't
require a degree but the nice sounding headlines are covering over something that could cost you
hundreds of thousands of dollars over your career so it's time to learn how money Works to find out
why the collapsing value of a college degree is great news for some people this week's lesson
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try them out for yourself you are paid based on how much you make for your company and how hard
you are to replace if you don't make a lot of money for the company and anybody could do your
job then you aren't going to earn much money but if you make the company a lot of money and you
have skills and experience that nobody else in the world has your earnings are almost uncapped
desk managers at hedge funds and World leading engineers at tech companies can make millions
of dollars a year for exactly this reason the trades have enjoyed High incomes because it has
been extremely hard to find people to do the work blue color work has a reputation of being inferior
to white color professional jobs and Young Americans also reported a fear that technical
roles on Factory floors could be automated but that is starting to change people are seeing
how lucrative these roles are and they are also witnessing that AI is replacing white color work
much faster than blue color work AI systems can now construct a three- statement financial model
and audit financial statements but they can't tile a floor or install an HVAC system there is still
a shortage of skilled trades people but if more people see the benefits of this kind of work and
start doing it then it will make them easier to replace and EAS to pay less even in white collar
Fields the declining value of a college degree is going to cause three big problems for most people
the first problem is that even if companies claim they are dropping their hard requirements for a
college degree they are still going to pick the candidate who does have a college degree
in most cases over a similar candidate with no formal qualifications a lot of companies
have made big announcements about how they don't care about a college degree as a way to get some
free publicity from news outlets about how Ford thinking they were there was a market increase in
companies making announcements like this during the period where businesses were finding it hard
to hire anybody but these big announcements were not exactly what you would call Honest a study
from the workforce research firm the burning glass Institute and the Harvard Business Review scraped
data from online job postings from 2014 to 2023 and found a 400% increase in the number of roles
from which employers removed degree requirements however the study also found that companies didn't
really change anything behind the scenes and not even one in 700 of the analyze rules over 2022
was filled by a skills-based candidate over a college graduate the real problem that the
report alluded to was that if people without a college degree were being hired into roles based
on their skills for a job that typically requires a college degree how did they get these skills in
the first place and that's the second big problem that the declining relevance of a college degree
causes colleges are not perfect but they do display to a hiring manager a certain level
of commitment and ability to pursue an objective that anybody has the opportunity to complete they
are far from a meritocracy and the problems with college admissions need a whole separate video but
if recruiters and hiring managers stop focusing on education they are going to substitute it for
things like existing experience and connections if you want to get a job based on your abilities you
are going to need to demonstrate those abilities and companies are going to be happy recommending
Pathways like unpaid internships not everyone has the financial stability to work for free for up
to 6 months at a time just to get experience for a job that may not hire them anyway a report by
Lending Tree found that 47% of unpaid interns took on debt to make ends meet and those who
didn't either had to work a second job or rely on their family to support them while working
without pay the collapsing value of a college degree is really only increasing the value of
nepotism demonstrating the ability to do a job is hard if you aren't given the opportunity to do
that job which is where family support or in some cases just getting a job at a family company puts
some young workers even further ahead of their peers children of wealthy families have always had
this career Advantage but ignoring college degrees kicks out the ladder from young people who don't
have any other way of getting ahead it's hard but possible for anybody to work their way into a good
college it's not possible for everyone to get early career experience at their parents company
a multi-decade study conducted by Stacy Dale and Alan Krueger found that the benefit of attending
an elite college for the average student was effectively zero students with the intelligence
credentials and family backgrounds to get into these institutions would have done well no matter
what the benefits of attending even Ivy League schools is just the result of selection bias
these schools don't make their students successful they just keep enrolment selective to students who
are already successful or at least the children of parents who can practically guarantee their
success legacy admissions and the cost to attend these schools means that families earning in the
top 10% of incomes are overwhelmingly represented in the student populations the one exception that
the study found were underprivileged kids that could use their college degree as a leg up into
rules that wouldn't have otherwise been available to them to them a degree of any kind would have
made a big difference to how much they were likely to earn over their career which means if company
stopped caring about degrees it would be the people who need it the most who will be pushed
the furthest behind the third problem is much more simple and it's the reason why more companies have
been so willing to hire people without a degree it gives you less negotiating power companies
don't reward employee experience anymore internal promotions are rare layoffs are frequent and pay
raises are barely keeping up with inflation if you're lucky more workers have figured out
that the best way to get the most out of their career is to job hop and consistently look for
better opportunities if you are a morally owner as company manager then hiring an employee without a
degree for a role that typically requires one is a great way to ensure that they are going to find it
more difficult to get a better job at a different company that has a degree as a prerequisite a
degree is still a really expensive investment into yourself and if all you care about that investment
doing is maximizing your income over your working career then you need to think very carefully about
minimizing how much you put into that investment and how it's going to pay off for itself
especially since the shape of work is changing just as quickly as the value of a college degree
go and watch my video on the full history of the modern job over on my other channel to find out
why the 9 to-5 might just be a historical anomaly that won't be around for much longer anyway if you
want to get videos to day early and get articles that will never be made into YouTube videos then
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