Opinion

The Great Debate

Health care degree leads to higher earnings

December 31, 2008

diana-furchtgott-roth_great_debate– Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.  The opinions expressed are her own. —

The economic outlook is bleak. Unemployment is rising.  Credit markets are dysfunctional.  Students are worried about job prospects, for good reason.

If you’re a young person choosing a career path, forget banking, forget autos, and forget Wall Street.  A new study coming out from the Hudson Institute in January, funded by the Bill and Melinda Gates Foundation, shows that enrolling in a community college and earning a two-year degree or certificate in a health-related profession—the only field that showed significant job gains in November, and the one with the most jobs openings—can open a pathway to higher earnings.

These findings demonstrate that the role of community colleges in American higher education has been expanding for good reason: they are cost effective.

The study, by economists Louis Jacobson and Christine Mokher of CNA in Alexandria, Virginia, examines 145,000 students in Florida from 1996 to 2007, using individual data on education and earnings.

The study shows that getting a two-year associate degree in a health-care field — such as nursing, medical imaging, and physical therapy — gave students an unusually good starting salary, and a good return on investment.  Students with health-related concentrations earned the highest salaries when they left school, with median incomes of $46,000.

This was about $10,000 more than students who prepared for professional fields such as law and banking; $12,000 more than those who prepared for vocational or technical degrees in fields like agriculture and construction; and $15,000 more than those who studied in the category now abbreviated as STEM, which includes science, technology, engineering, and mathematics.  Students with concentrations in humanities had the lowest starting salaries, with a median of $27,000.

For students who pursued a 4-year BA degree, the additional two years of health-care study made little difference in salary.  However, students who majored in STEM over four years pulled down initial salaries of $46,000, matching health-care earners.  Those who got a BA in a professional field, or in a technical vocation, earned $40,000 and $39,000 respectively, still less than those who took a two-year degree in a health-related field.

The data shows that while it is not necessary for students with concentrations in health-care to attend college for four years to boost earnings, students who go into more academic fields win high-starting pay with a four-year degree.

This is especially relevant in Florida, which has fared badly in this recession.  Its loss of 58,600 payroll jobs between October and November, a decline of seven tenths of one percent, was the largest in absolute numbers and the fifth largest in percentage terms in the nation.  Over the past year, Florida has lost 207,000 jobs and its unemployment rate has shot up from 4.4 percent to 7.3 percent.

In all, the almost 1,200 community colleges in America now enroll 11.5 million students, according to the American Association of Community Colleges, or 46 percent of all undergraduates and 41 percent of first-time freshmen.

Average in-state tuition and fees are $2,400 a year, a bargain compared with tuition at four-year schools, public or private.

Do the math.  Two years’ tuition at your local community college comes to $4,800 (on average).  A major in a health-care field might lead to a job paying around $46,000. Times might be bad, but opportunities abound if one looks in the right direction.

Diana Furchtgott-Roth can be reached at dfr@hudson.org. For her previous columns, click here.

Comments
23 comments so far | RSS Comments RSS

Any one who goes into health care to make Money is heading towards an unpleasant experience that in all likely hood will result with them going back to school AGAIN thus doubling there financial and time commitment to school.

There is a reason health care providers get paid like that. In the last 2 weeks I seen 2 nurses bitten or hit, an Aid urinated on and I myself had to listen to parents balling for 20 minutes because there child was injured in an accident (kid turned out ok).

You work long crappy hours with mandatory overtime, you cant just leave when your shift is over and if your in an hospital you will probably work rotating shifts.

Then there is work stress. I’m a pharm tech so literally EVERY action I take has the potential to KILL some one. That’s not drama, its a fact. You ask any Nurse, Aid, Dr or Tech who has lasted more then a few years and they will tell you, there not in it for the money there in it because its a passion

Posted by Eron | Report as abusive
 

So if you want to make less than 50k per year, keep this in mind.

Posted by Ace | Report as abusive
 

When I read this woman’s work, I see her with a large bow
tie, ala Dr. Peter Morici.

We needed a conservative economist to give the unemployed
a heads up on where to go for a good job?

Good luck with that.

Posted by darlene | Report as abusive
 

the article concentrates on only the starting salary.
for RN’s the starting salary is good(75-80k in nyc) but ‘yearly’ raises are small/nothing. so for nursing the starting is essentially the salary cap. when thought about that way it’s not so impressive a salary compared to other jobs. you can make the same amount teaching. don’t do it for the money.

Posted by rn | Report as abusive
 

I live in the bay area and have seen first hand how well the medical industry pays. I have one friend with an AA in radiology who makes $72K a year, and several friends who are RNs. The starting pay for an RN is $40/hour and an RN with an Masters and 10 years experience can expect to make between $150K and $200K a year. Unfortunately, I didn’t go into the medical field and find myself making $65K a year with a Masters and a professional license.

 

Great job lumping engineering in the same group as science, technology, and math. The lowest average starting salary for any engineering concentration at my university was in the mid $40k range (on par with the healthcare starting salary listed above). Most were in the $50k range, and the average starting salary for my own concentration was in the mid $50k area.

Of course, these statistics alone work against your argument that healthcare is the way to go, so it was easy to balance them by averaging the numbers with other less technical degrees.

Posted by Steve | Report as abusive
 

Nursing and being a doctor is hard work compared to the pay so you shouldn’t do it for the money ($75k nursing and $110k for doctors). Also with socialized medicine expect too many patients, lowered salaries, and the eventual severe funding crisis when the government severely cuts back on medicare and medicaid because it can’t borrow and won’t print money.

Posted by John | Report as abusive
 

More importantly, healthcare jobs are ression proof. The population is aging, and there is a greater demand for healthcare. When more and more people are holding out bowls just to get a cup of soup for the day, one less lawyer or engineer won’t be on any employer’s mind.

Posted by Marcey | Report as abusive
 

look at the cost of healthcare for the average employee. companies may be paying more in hourly wage, but the cost of healthcare for a single mom with dependants average around 600.00 a month

 

The above column is written by the same person who 2 months ago advocated the US import a lot more skilled immigrants so they could buy up unsold homes. That nonsense would lead to lower salaries for US workers and the likely lay off of US workers. What she really meant was she wanted to import more software developers on H-1B visas – thus, the salary hit would be very focused on US software developers. This is known as a “labor subsidy” – we drive down salaries of one group to send benefits to others – and the workers in those fields end up subsidizing others through their own lower salaries. She has been advocating this for years (do an online search). Unfortunately, in this economy, we have seen IT jobs fall from 3.7 million in 2001 to just under 3 million at end of 2007 – and more than 100,000 more have been layed off in the past few months. You may also note that the proponents of importing more immigrant workers are primarily tenured academics – who have a guaranteed job for life. When they forgo their tenure and compete with the rest of the world like the rest of us perhaps we will listen to them. For now, her talk is that of a disconnected academic far too removed from the real world. I would avoid her advice.

Posted by Ed | Report as abusive
 

I think this is simply an advise for young people who either are not sure of what degrees they want to pursue or people who are at a cross-roads heading for the dead end. There is always some opportunities especially in a bad economic stages like this. This research and others shoe that the health sector will be growing for sometime before it busts. People will always get sick and the need for healthcare is like for food. You cannot do without it.

The trick here is not to jump into the field for the money but check your passion, interests and career choice to see if this is something for you. You can really make a difference if it is something you love doing and not see it as a job.

Talk to people in the field and get a first hand knowledge of what they do, how they like it and what turns them off. These will be some real world experience to better prepare you for the decision.

Good luck!

Posted by Greg | Report as abusive
 

I work in the health care field, yes you get get paid more than the average college grad but it well deserved. Working in the health care field is personal, you are accountable to their health/life. There is tremendous pressure and you have to think why there is always vacancy? Well,the turn over rate is high many people quit due to the insurmountable stress. I will only recommend people who are passionate with helping others or no the money is just not worth it.

Posted by Jo | Report as abusive
 

Become a doctor just for more money, that’s the NEOCON way!

Posted by joethedumber | Report as abusive
 

rn is right, the starting salary looks good but it is also nearly the top salary. raises are small,experience is often discounted especially if one has many years experience. few non government hospitals have any retirement plans,old nurses retire with injuries,not pensions.injuries are often the result of patient attacks which often also result in ptsd.i worked as an rn with a 2 yr degree for 35 years. i then earned a masters in social work and worked as a therapist for 10 years where the satisfaction is just as great.it’s also safer and 100% less stress.

Posted by rnc. lisw | Report as abusive
 

I’m rather surprised that this discussion article is found under the section called The Great Debate. This is not a debate nor a discussion, but an opinion to sway thoughts.

Be a doctor, a healthcare professional or whatnot because its the most profitable job available. Perhaps it is true, but can everyone turn to the medical profession? Aside from the difficult skills and insights that need to be picked up just to perform a proper diagnosis of the patient, an economy does not work solely based on healthcare.

Of course, medical care is important, but so is a lot of other things, such as infrastructure; making sure water runs to homes, power on 24-7 et cetera, though those jobs might pay less than being a doctor but it is decent.

On the whole, this article is telling that trying to be a doctor is like trying to be your own boss; you cannot become one unless you have the talent to be one.

Posted by Maurice | Report as abusive
 

Since the median family income in America is $48,000, it says something about the state of our economy and the imbalance in the supply/demand equation for labor when the best we can strive for is an annual income of $46,000. More evidence of the downward spiral spawned by casting the American work force into the global glut of labor through our free trade policies.

 

Jo is wrong about medicine being personal and responsible. Anecdotal evidence, I have never had a doctor (outside of school) not make me wait 45 minutes in the last waiting room for a 3 minute exam. Doctors and by extension others in the medical and insurance fields have come to believe that people will wait because they need them. This is not entirely their fault though. The reason is simple, undersupply. Artificially control the supply to maintain high rates. Why is there a shortage of doctors and trained medical technicians? If you train enough doctors and techs so no more than 10% have to work overtime, their gross income will fall and so will their stress levels and the quality of work will increase. The medical education itself is trying to train individuals to be under stress constantly often ending in suicides by medical students. Medical colleges believe that a medical degree should not be easy, helping ill people should be so hard that only the craziest can do it???

Lack of a soul leads to higher earnings. Quote me!

Posted by Himanshu | Report as abusive
 

To view work primarily by how much it pays is to maintain a BLUE COLLAR mentality. It’s one of the greatest conceptual failings of our society – and the most tragic. Too many Americans waste entire adult lives, stuck with work they chose for the money. Better to be broke and in love with what you do – it makes getting out of bed much easier.

Posted by Lovemywork | Report as abusive
 

The job of the cabinet is to control all activity, economic and otherwise in the country while creating an impression of free choice. If people are defaulting on loans, should rates go down or up? Digression…

The way education is controlled, it is a centrally controlled economy and one that is unplanned. Plans have value and this country detests planning, ergo frequent bubbles. The pendulum swings to the extremes. Why not draft students for different professions by a matching program? Make sure you have a planned ratio of civil services for the population. Engage everyone in the future and prosperity of the nation in a truly capitalistic, socialistic, humanistic way. Synergise the the three forces.

Somebody has a hangover =)

Posted by Himanshu | Report as abusive
 

What we have to realize is that the entire model is broken. We have come up with a model that is wise enough to to realize that think tanks such as the Hudson Institute are all about preserving the status quo since they are funded by those with a vested interest in the status quo. Only when you are aware of this does some of their work make sense. By way of example, one of their fellows produced a book entitled “Saving the Planet with Pesticides and Plastics.” This theme only makes sense if their funding is coming from big business.

Health care has to transition to a prevention model. Rather than going off to school to be specialists, those with an interest in health care should learn how to cook healthy food and lead active lives. We have to design a health delivery model that is properly scaled and I’m not aware of any educational system that is capable of designing such a model.

 

Prevention model, huh. I have spent the last 26 years of my life as an ICU/ER RN and this is what I have observed:

People will NOT take responsibility for their actions. Each and every one believes they are where they are as a result of being a ‘victim’ of something. About 15% of our ICU admits come from drug dependency or alcohol and their related diseases. About 35% of our ER visits stem from the same causes. Not especially OD but cirrhosis, pneumonia, systemic infections and so on. The hospital stays are longer (usually with Medicaid insurance), they require a great deal more of our resources and they for the most part are horrible noncompliant patients. So much for the prevention model.

I went into nursing because of two things: Job security (and that was a laugh) and because I love what I do. My advice to the new breed. If you don’t like people at their worst, DO NOT go into healthcare.

Posted by James Moore | Report as abusive
 

Occupational therapy is in high demand. I recently graduated from college and my professors continually reinforced the job security that came with an occupational therapy degree. It is a rewarding career that offers excellent options in the health care field and provides high salaries as well. Check out Degrees In Healthcare to learn more about earning a degree in occupational therapy.

Posted by ed | Report as abusive
 

Is there an alternative method into healthcare profession? Rather than becoming a Doctor or Nurse, could I enter the profession through an MSc Management degree and a passion for helping?

Posted by FootyR | Report as abusive
 

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  •