Rich Dad Education Scam #2:
Postgraduate Education Automatically Leads to Higher Income
“There are three kinds of lies: lies, damned lies, and statistics.” – Saying popularized by Mark Twain
Many years ago there were different variations of a television ad promoting Trident Sugarless gum. While the actors and scenery changed from commercial to commercial, the main catch phrase remained the same:
Four out of five dentists surveyed recommend sugarless gum for their patients who chew gum.
Statistics can be powerful forces in shaping people’s opinions. Those casually watching the commercial might quickly conclude that dentists approve of Trident gum. Naturally, this is the message that Trident wants to convey, and most people will simply see a statistic and give validity to it without regarding the source of the statistic or questioning how the statistic was collected or measured. Even fewer people will attempt to analyze and interpret statistics on any more than a surface level.
After all, four out of five dentists were surveyed, but how many total dentists were actually questioned? Was it only five or was it 500? How were these dentists chosen? Were they all the personal dentists of Trident executives? And hey, what’s that for their patients who chew gum part all about? Are we to infer and read between the lines that dentists actually prefer that you don’t chew gum at all? I guess 5 out of 5 dentists recommend that you shouldn’t chew gum wouldn’t make a very effective slogan.
Statistics on Post-Graduate Education Income
While the conspiracy of the 4 out of 5 dentists may never be solved, it doesn’t change the fact that when most people see a statistic they give it instant credibility. This fact increases 215% when the statistic they see is aligned with their own preconceived beliefs. Four out of five people surveyed for this article agree with this particular point.
So when people see a statistic supporting their preconceived beliefs regarding the sacred belief of education, they immediately point to them as proof to support their beliefs. These are the people who confidently claim, “To get a good job, you need a good education.” If there was a bumper sticker with a more clever slogan they would proudly put it next to their “My kid is an honor roll student” bumper sticker. Robert Kiyosaki’s bumper sticker might even read, “Your honor roll student is working for my C student.”
Statistics supporting the general premise that post-graduate education automatically leads to higher income are non-existent. They are non-existent because the word automatically infers that a guarantee is placed upon obtaining a masters or doctoral degree ensures a higher income. No matter how fervently someone might argue to the contrary, such an assurance can never be given.
However, statistics in the aggregate supporting the notion that those with a post-graduate education have a higher level of income can be found. These are the statistics that individuals often point to when they want to justify the importance of higher education. For example, you will occasionally read statistics that state that those with post-graduate degrees will make more money over the course of their lifetime. Those stressing the importance of education will wag their finger at you and say, “See, education is important!” Unfortunately, these statistics can be terribly misleading when a person is attempting to apply them to their own circumstances. For example, let’s take a look at a few recently released statistics from the Bureau of Labor Statistics for individuals over 25.
Here are a few points to consider when looking at these stats:
- Can you really lump all people with a Master’s degree in the same category? Undoubtedly some degrees are going to be more in demand than others, and individuals with those degrees will make more money. By lumping all degrees together, it hides the Master’s degrees that actually make less or equal to those with Bachelor’s degrees. Those with Master’s degrees in philosophy or the fine arts probably take little solace in the fact that their degree counterparts make more money in the aggregate.
- In this Bureau of Labor poll, all individuals over 25 are put into the same category. Those that obtain Master’s degrees are a very diverse group of individuals. Many are in their 30s, 40s, and 50s and are often paid by their employer to obtain their degree. This fact can potentially skew the results and, at a minimum, clouds the picture to whether there is much of a salary boost to students who obtain Master’s degrees early in life.
- Unemployment rates are not reflective of specific majors. For example, a recent study demonstrated that the unemployment rate for recently graduated architecture majors is 12.8%.
The Real Debate
In essence this debate could really be rephrased as a debate on whether or not postgraduate degrees provide more security or not. Colleges at all levels simply focus on preparing their students to become employees and fail at teaching crucial financial skills that are necessary to thrive and prosper in the new economy. Whether you are in undergraduate or graduate school, this fact remains the same. Thinking that more school will somehow fix the problem is like saying that the cure for world hunger is more Calculus courses.
Those that are passionate about specific subjects should pursue those passions. Those that want to continue the process of learning to think critically should consider continuing their formal education. However, those that wish to pursue a path of financial freedom have to look outside the halls of academia to find assistance.