The data is overwhelming. If you want to get ahead, or even stay afloat, you better have an education.
According to the Bureau of Labor Statistics, as of the end of November 2014 there were 5 million unfilled jobs in the U.S. Based upon research from the job search site Indeed, the U.S. is losing $160 billion each year due to unfilled jobs.
However, companies wanting to fill these jobs cannot simply stuff them with “warm bodies.” In today’s global market place, companies must hire the best and the brightest or face a strong uphill battle. As I tell my Texas Lutheran University students, “You must have skills to pay the bills.”
According to the Bureau of Labor Statistics and the Census Bureau all people with a high school diploma will earn on average just above $30,000 this year. In comparison, someone with a college degree can make more than $56,000. Furthermore, the unemployment rate for college graduates is just above 3% while those without a high school diploma experience an unemployment rate nearly triple that of a college graduate.
This data is not new or earth-shattering. However, college educations are not free and they take considerable time.
Based upon data from the Federal Reserve, our nation has about $1.2 trillion of student loan debt and the amount of total college debt outstanding increased by 20% from 2011 to 2013.
The National Center for Education Statistics states that the average cost of a four year university has more than doubled on an inflation adjusted basis since the 1980s.
And yet, for the last 40-plus years there has been a steady mantra that everyone must go to a traditional four year college.
Recognizing this dilemma, not everyone should go to a traditional university.
Many kids coming out of high school don’t have the financial resources and may not want to incur the debt burden. They may not have the support network necessary and personal circumstances may dictate that they need to get into the workforce as soon as possible.
There are other solutions that cost less, get you working sooner and pay competitive wages. Given this, there is a legitimate argument to be made for technical training.
SimplyHired.com estimates that a trade school graduate will make about $42,000 per year.
According to Salary.com the average pay for an entry level plumber is more than $41,000 a year. A senior plumber averages $53,000 per year.
An entry level HVAC mechanic earns $41,000 while a senior HVAC technician makes north of $55,000. Similarly, an entry level electrician commands nearly $44,000 while a senior electrician earns more than $60,000.
All of these jobs are in demand today and deliver competitive wages. Furthermore, once you work your way into a senior position you can earn very similar amounts to a traditional college graduate.
However, while the average trade school costs about $33,000 to complete, you’ll get into the work force generally two years earlier. Not only does this option cost you less, but it gets you a paycheck that much quicker. This alone could save someone $100,000.
Furthermore, if you do need to borrow money there is federal financial aid available.
Can these jobs be “dirty” at times? Sure. However, there is nothing wrong with rolling up your shirt sleeves, sweating a bit, and making an honest day’s living.
The key to all of this is to obtain employable training. Furthermore, once you get an education—whether technical or traditional—realize the real education has just begun. Once you are in the workforce, never stop refining your craft, reading, studying or increasing your knowledge. All of this will improve your position in life.
Lastly, in our country you are not owed a thing. But you are given an opportunity. Getting an education will help you make the most of it. Otherwise, know that once you stop learning, the world will pass you by.
Dave Sather is a Victoria certified financial planner and owner of Sather Financial Group. His column, Money Matters, publishes every other week.