This One Mistake Could Keep Gen Z From Building Wealth — Even in a Strong Job Market
College degrees have received a lot of flak in recent years, but data from the U.S. Bureau of Labor Statistics indicates that they are still valuable.
The unemployment rate is at its lowest for people with a bachelor’s degree or higher and people who didn’t get high school diplomas have the highest unemployment rates. Learn more about how this mistake of not getting a college degree can keep you from building wealth.
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Why a College Degree Is Still Valuable
A college degree tells any employer that you committed to a challenging task for four years and saw it to completion. Degrees also indicate specialized knowledge in key fields. Granted, some degrees are more valuable than others. Your earnings will likely be higher with a STEM degree than with a degree in philosophy and art history.
Some employers still require college degrees and even if a business doesn’t require a degree, hiring managers may still prefer applicants with degrees. The data from the U.S. Bureau of Labor Statistics backs this idea, with only a 2.8% unemployment rate for people with bachelor’s degrees or higher. The rate shoots up to 6.4% for people who didn’t graduate from high school.
This trend has remained constant for decades. Even in economic downturns like the Great Recession and the pandemic, professionals with bachelor’s degrees held onto their jobs at higher rates than people who didn’t have them.
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The Side Hustle Dream
The accessibility of side hustles and their high-earning potential have made the idea of skipping college more desirable. Some people can earn six-figure incomes by recording YouTube videos, finding obscure jobs few people want to do or using Uber to drive people around.
There are many ways to make money and not all of them require degrees. Billionaire entrepreneurs like Mark Zuckerberg and Bill Gates dropped out of college and Palantir CEO Alex Karp said college is no longer a reliable training ground.
While some people can do better without college, it’s extremely difficult to make a full-time income from a side hustle. There are more people who go broke pursuing side businesses than there are people who become successful. Without a college degree, it is more difficult for these people to demonstrate expertise and eventually secure high-paying jobs.
It’s still good to learn about different side hustles. It’s entirely possible for someone to run a small business while in high school and college. Then, that business can become the primary income source after graduating from college. However, with approximately half of those businesses failing within five years, a college degree can act as a hedge in case your side hustle doesn’t make it.
Navigating High College Costs
Graduating from college increases your likelihood of finding and retaining work. However, the unignorable reality about college is how high tuition has become over the years. A job won’t do much good if all of your earnings are getting pinched by rent, student loan payments and other living expenses.
Having that type of overhead without a high-paying job has become more common and that’s why a growing percentage of recent graduates feel like they got a raw deal. If you are still deciding between colleges and haven’t committed quite yet, you still have time to look for cost-effective strategies to get your degree without ending up in a pile of debt.
Community schools and online courses can provide most of your credits and state universities are cheaper than globally recognized names. You will also save a lot of money if you commute to college instead of living in a dorm. Any scholarships you can get will also make a difference.
Potential college students are increasingly finding themselves at the extremes. Rejecting college as a whole isn’t the right answer for most people. However, blindly going into the entire process without considering how student loans will affect your finances or assessing your future job prospects can create an uphill battle.
The data suggests that a bachelor’s degree gives you better odds of getting hired and keeping your job. It’s just a matter of attending college in a cost-effective manner and securing a degree that opens the door to high-paying jobs.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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