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Choice of college major figures big in earnings
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Top-paying college majors earn significantly more than the lowest-paying majors over a lifetime, reveals a May 2015 report from Georgetown University’s Center on Education and the Workforce,
The Economic value of College Majors.
The Georgetown researchers found that:
• At the entry level, college graduates earned $33,000 annually. But STEM (science, technology, engineering and mathematics) majors earned $43,000 on entering the workforce, and business majors earned $37,000, while arts, liberal arts and humanities majors earned $29,000 annually.
• On average, STEM majors earned $76,000 annually and business majors earned $65,000, while teaching and serving majors earned $46,000 annually. The average earnings for all majors combined was $61,000.
• Two of the top highest paying categories, STEM and business, also made up the most popular majors, accounting for 46 percent of U.S. college graduates.
Yet when it comes to starting salaries, students earning degrees in the STEM fields tend to underestimate the going rate for their abilities, according to a report by the National Association of Colleges and Employers (NACE), the
Spring 2015 Salary Survey. Among five STEM-related fields (see box, below), the overall average salaries exceed the expectations that STEM major students reported through NACE’s
Class of 2014 Student Survey report.
Those majoring in the biological sciences came closest to the mark. Their expected average salary ($32,427) fell just 2.5 percent below the overall actual average ($33,248) for 2015. However, graduates in the other areas appear to have little understanding of what the market will pay. Chemistry majors did the poorest job in estimating their worth: Their average expectation was more than 50 percent below the actual average starting salary.
Average Student Salary Expectations
Average Starting Salary
Class of 2014Student Survey report (expectations) and
Spring 2015Salary Survey report (actual), National Association of Colleges and Employers.
Wage Slowdown for STEM Jobs
Despite leading the market for both starting and career salaries, wage growth shows signs of stalling for STEM positions this year, according to research findings from pay consultancy PayScale.
Results from the first quarter (Q1)
2015 PayScale Index, which tracks quarterly and annual trends in compensation, show the average 12-month change in U.S. wages across all industries was 1.8 percent. But wages for previously hot-performing IT, engineering, science and biotech jobs fell slightly in Q1 and have been relatively flat for several months, the index showed. Science and biotech jobs grew just 1.0 percent annually, experiencing the lowest wage growth of any category. However, these jobs are still near the top for wage growth since 2006 (approximately 10 percent), due to remarkable growth for several years.
“After incredible growth, the [STEM] industry is kind of taking a breather this quarter,” said Tim Low, PayScale vice president of marketing.
“We saw wage growth in certain industries and jobs shift in Q1 as some previous high-performers, such as IT and biotech jobs, moved down the Index and others that were lagging, like construction and real estate, showed considerable improvement,” added Katie Bardaro, lead economist at PayScale. “While there are signs of life with some wage growth in certain pockets, the national average shows wages are still lagging far behind other indicators in our rebounding economy.”
Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter
Related SHRM Articles:
Average Starting Salaries Up for Recent Graduates,
SHRM Online Compensation, April 2015
Wage Growth Still Lags Economic Recovery, Data Shows,
SHRM Online Compensation, April 2015
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