Why That Sheepskin Is Worth So Much

By ROBERT A. ROSENBLATT

June 24, 1996 12 AM PT

TIMES STAFF WRITER

You can build corporate home pages on the Internet or sling hash at the local deli. You can set strategy as a top corporate executive or clean the floors of the office building at night.

These are the kinds of dramatically divergent career paths that lie ahead for graduates in today’s split-level economy.

Mom was right: If you want to make money, go to college. Every class you take beyond high school, whether training at the community college or a bachelor’s program at a university, means more job choices and more money in your pocket.

The average college graduate makes 75% a year more than a high school graduate, and the gap has been increasing. Twenty years ago, a college degree was worth 50% more than a high school diploma.

One-third of the almost 18 million new jobs created by 2005 will require at least a bachelor’s degree, according to the U.S. Labor Department.

On the other end of the scale, service jobs with low wages are booming. The top four growth occupations are cashiers, janitors, sales clerks and waiters, according to the Labor Department’s employment outlook study.

This divergence among jobs--a well-paid segment at the top and masses of workers with paltry wages far below--is “an important part of a growing inequality of income, a trend going on for some time,” said Ronald E. Kutscher, associate commissioner for employment projections at the Labor Department’s Bureau of Labor Statistics.

Even workers with a college degree face stiff competition. The better jobs, he said, require a “particularized training and education,” not the kind of job you can immediately get with a general degree. “You need a bachelor’s degree in computer science or engineering or teaching,” he said.

Jacqueline Krause, 33, graduated four years ago from USC with just such a degree: a doctor of pharmacy. Upon graduation, she found her skills in high demand. She immediately got four job offers and now earns $60,000 a year as vice president of a Long Beach pharmacy that specializes in customized prescriptions for home delivery. Her employer, Homelink Pharmacy, is her second since leaving school.

The opportunities in her field are very good, she said.

“There are so many different avenues in terms of pharmacy that one can go into,” Krause said. “If I had a daughter or son who wanted to go into pharmacy, I would recommend it.”

Like Krause, the graduates most in demand have a particular type of training to offer employers and often command the highest salaries. Pharmacy, engineering and computer science are at the top of the pay scales for college graduates, according to Labor Department studies. Liberal arts are at the lower end in terms of financial rewards.

“In today’s market, if you come out with a degree in computer science, you will have an easy time and can pick over several job choices,” the Labor Department’s Kutscher said. “On the other hand, if you have a degree in a field the job market doesn’t want, such as history, you will have to scramble. You will not necessarily end up in the job you thought you would have after college.”

Christopher Heiser, 22, graduated in May with a general degree--a bachelor’s in English and comparative literature. He is seeking a job in journalism. So far, he has had no luck.

“I’ve been trying to pursue work for a magazine or some sort of newspaper,” the Los Angeles resident said. “What I’ve learned mostly about magazines is that entry-level positions to get started are mostly in New York, not L.A.”

He’s not willing to move just yet, but says he’s in for the long haul.

“I have no illusions that you just start in writing articles for people,” Heiser said. “I’m basically an unemployed 22-year-old now.”

Stacy Roughan, 22, graduated last year with a bachelor’s degree in English and comparative literature from Occidental College after just three years of intense study.

She had a good school record and worked as a waitress to put herself through school. The good record may have kept her job search mercifully short. After sending out just six resumes, she got a job in less than a week as an administrative assistant at the Financial Relations Board, a public relations firm in Los Angeles.

Still, she earns less than $25,000 a year, though she views the position as a stepping stone to a more responsible job. And she considers herself lucky.

Her friends “for the most part have taken jobs that are very transitory . . . [and] not in the field they wanted,” she said. “They’re still transitioning to find the right position for them.”

Flexibility is the key for these graduates, as well as other job seekers, said Richard Stewart, director of placement at Purdue University, and a 35-year veteran of helping graduates get jobs.

“No doubt there are not as many jobs that will meet the expectation of some people when they get out of college,” he said. “Remember, this is an entry point. Those with a direction and a purpose will find something that is OK for them.”

He tells students to avoid ruling out a job because of its location or because it is with a smaller company.

“Students who insist, ‘I can’t live more than 30 miles away from X,’ whether X is a small city, or Chicago,” are making it much harder for themselves, he noted.

Students also have to realize that their futures may not lie with a Fortune 500 company or a Wall Street investment firm, both considered bastions of high salaries and generous fringe benefits.

Big employers aren’t flocking to campuses as they once did, he said. At Purdue, for example, “we had a really terrible time, between 1989 and 1993,” when the number of on-campus interviews plunged from 28,000 to 15,000, Stewart said. Recruiting has begun to recover--the number of interviews this year was 20,000.

“We’re trying to educate the student, to tell them, ‘Don’t turn up your nose at an unknown name,’ ” Stewart said. “It could be the next Microsoft.”

Jaime Reyes, 24, a 1995 graduate of UCLA in economics and political science, opted out of the corporate race altogether.

“A friend who was going to the Art Center in Pasadena was a graphics guy,” he said. “I was more a business type. We thought of starting our own company.”

The two put together a fledgling enterprise to market computer accessories such as mouse pads. Because he has some computer expertise, Reyes was able to put information about his products, called Rat Maps, on the Internet.

The firm now has six employees. He’s even recruited computer graphic designers from Cal State Los Angeles and Pasadena’s Art Center College of Design.

“Artists joining hands with business,” he said.

Classes in computers are a big draw on campuses as students and their parents figure out where the best places are to invest their time and tuition money.

Aeronautical and mechanical engineering enrollments soared during the Reagan-era defense buildup, then plummeted when the Cold War ended and military spending was restrained.

Business degrees were very hot in the 1980s until the stock market crash and some of the insider trading scandals, said Morton Schapiro, a labor economist and dean of letters, arts and sciences at USC.

“Students are really responsive” to the job markets needs, he said.

Students today want to be at “the intersection of computer sciences, engineering and cinema,” Schapiro said. Courses in the latest technical advancements in photography and sound are hot.

Something less exotic, but vital to society, will be the source of vast numbers of jobs: The teaching profession will be hiring in huge numbers at the elementary and secondary levels, according to the Labor Department. About 600,000 such jobs are expected to be added by 2005.

“We need a whole new generation of teachers--60% of our teachers will be retiring in 10 years,” said Jeff Joseph, head of a workplace-of-the-future program at the U.S. Chamber of Commerce.

Potential teachers can’t ignore the need for high-tech skills, either. New teachers must be fully computer-literate, Joseph said. “We have to integrate more technology into the classroom [and use] software that engages the students’ attention,” he said.

In the job market lottery overall, about 15% or 20% of college graduates will land jobs in fields that don’t normally require a college degree, according to Labor Department studies. Even in those fields, though, they’ll do better than workers without a college education.

College graduates in occupations that don’t require a degree “skim off the better-paying jobs,” said the Labor Department’s Kutscher.

That’s why college graduates typically have the lowest unemployment rate.

The job prospects and salary numbers for college graduates can be somewhat deceptive, experts warn.

“It sounds like the college graduate is doing very well, but what the numbers really mean is that people with high school degrees are doing very poorly,” said Schapiro of USC. “College is more of a defensive move than it was 20 years ago.”

More jobs require a college degree, but the pool of college students is growing even faster--more than half the high school graduating classes now attend college--meaning that many could be disappointed in the job market.

At the same time, manufacturing, traditionally offering large numbers of well-paid blue-collar jobs, will continue to shrink, discouraging news for all graduates.

The number of goods-producing jobs will fall from 25.8 million in 1994 to 24.9 million in 2005, a huge loss at a time when the rest of the economy will be creating millions of new jobs. The continued disappearance of these manufacturing jobs as industrial work moves abroad, imports increase and automation displaces workers from U.S. assembly lines will continue to drive down real wages for those with a high school degree or less.

“For too many people, the quality of jobs isn’t what it should be,” said Frank Parente, an economist with the AFL-CIO.

With the economy generating millions of service jobs with below-average wages in the coming decade, he said, “we have to increase the rate of pay. Otherwise, living standards will erode.” He noted that the buying power of the average wage has dropped 12% since 1979.

Parente and the other economists agree the best safety net for an individual is education beyond high school: Every technical training course, each community college associate degree, any bachelor’s degree, brings with it an earnings edge.

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Jobs in Decline

Farmers and bank tellers are among the five occupations projected to lose the most jobs between 1994 and 2005.

In thousands

Farmers: -273

Typists and word processors: -212

Bookkeeping, accounting and auditing clerks: -178

Bank tellers: -152

Sewing machine operators, garment: -140

Cleaners and servants, private household: -108

Computer operators, except peripheral equipment: -98

Billing, posting and calculating machine operators: -64

Duplicating, mail and other office machine operators: -56

Textile draw-out and winding machine operators and tenders: -47

File clerks: -42

Freight, stock and material movers, hand: -36

Farm workers: -36

Machine tool cutting operators and tenders, metal and plastic: -34

Central office operators: -34

Central office and PBX installers and repairers: -33

Electrical and electronic assemblers: -30

Station installers and repairers, telephone: -26

Personnel clerks, except payroll and timekeeping: -26

Data entry keyers, except composing: -25

Source: Labor Department

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Required: More Education and Skills

Here’s a look at the number of new jobs being created, based on the required level of education or training. Although still accounting for the biggest share of job growth-- 42%-- the number of new jobs requiring less than a year of on-the-job training is down from 52% in 1994. Picking up the slack are jobs that require at least a bachelor’s degree. Those will account for 34% of the 17.7 million jobs created between 1994 and 2005, up from 21% of the jobs in 1994.

(In thousands)

Less than one year of on-the-job training: 7,377

Work experience, plus a bachelor’s or higher degree: 3,764

Work experience: 1,331

Bachelor’s degree: 1,303

Long-term on-the-job training: 1,229

Associate degree: 963

Post-secondary vocational training: 743

Master’s degree: 427

First professional degree*: 374

Doctoral degree: 180

* A professional degree, such as those held by lawyers, dentists and doctors, is designed to prepare a student for a job in a professional workplace. A master’s degree or doctorate, on the other hand, is primarily designed to prepare a student for a degree in academia or research.

Source: Labor Department

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Where the Jobs Are

Half of all new jobs created between 1994 and 2005 will be concentrated in just 20 occupations. Of those occupations, the four biggest in terms of job growth are in the service sector and offer relatively low pay and require few special skills. On the other end of the scale, one-third of all new jobs will require at least a bachelor’s degree.

In thousands

Cashiers: 562

Janitors and cleaners: 559

Salespersons, retail: 532

Waiters and waitresses: 479

Registered nurses: 473

General managers and top executives: 466

Systems analysts: 445

Home health aides: 428

Guards: 415

Nursing aides, orderlies and attendants: 387

Teachers, secondary school: 386