SEVERAL MILLION households every year deal with a crucial decision involving their teenage children. Will their kids head to college, enter the labor force, join the military or perhaps do something different entirely? Often, this involves weighing the costs and benefits of a college education vs. the immediate income from getting a job.
About two-thirds of high school graduates end up being college freshmen. The remaining third defer or never go to college, but they can still end up earning above-average incomes. My focus today is on this second group.
Going directly into the labor force means getting immediate real income, perhaps for the first time. Teens may gain both financial and social independence, jumpstarting their entry into adulthood. Getting that early start can provide more years of on-the-job experience, as well as early opportunities for promotions and pay raises. The downside: A bad career decision may condemn these young adults to a lifetime of below-average wages and job dissatisfaction.
Indeed, numerous studies show that, for most individuals, non-college jobs aren’t a winning proposition. College graduates typically enjoy lifetime earnings well above those of non-college individuals. If you look at total career earnings minus college costs, college students with a bachelor’s degree will, on average, catch up with non-college workers by age 30—and thereafter will pull ahead.
But the averages can be deceiving. Trying to decide whether to enter the workforce after high school? Here are five questions to ask yourself:
Do an informal breakeven analysis to see how your proposed non-college career might compare with a post-college career. There’s a number of blue-collar job categories that currently provide above-average incomes, including industries such as railroads, urban transit, water commerce, mining (especially oil and gas) and heavy construction.
Talk with individuals already working in your proposed job area. If possible, try to spend an entire shift observing first-hand what electricians, plumbers or heavy-equipment operators actually do. Ask them what they like the best and least about their jobs. Inquire about the biggest surprises and disappointments.
It’s decision time. Will the job work for you? What about that spiffy apartment and pool? How about the car you want? How about dozens of other perceived “requirements”? Start cutting budget items left and right. Now ask yourself: Do you still want that job—or any non-college job? Or do you want to reconsider going to college?
Even if you decide to head into the workforce after high school, keep open the possibility of college enrollment at a later date. A few years in the real world may make college seem far more appealing. I had a high IQ classmate who took a blue-collar union job right out of high school. Years later, I learned that he made a career change and ended up with a PhD in engineering.
Dennis E. Quillen is a retired economic geographer and university professor. He loves blackjack and long-term investing. His previous articles include Saving Time, Food for Thought and Cutting the Bonds.