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Five on Friday: Graduates and money

Five on Friday: Graduates and money

Welcome to Five on Friday, a round-up of views on a theme. In this edition we will show you the money! Heirs and heiresses aside, qualified people tend to earn more than unqualified people but what people should be getting is still a murky area. So let’s clean up.

Vocational education is focused on career outcomes and salary expectations sometimes form a key part of why students undertake the courses they do. Money is, however, still a contentious topic of conversation. If you choose a career path for its salary, does that mean you’ve foregone your passion for something else? Should certain jobs attract a higher salary because they are dangerous or more worthy than others? What’s the gap between what graduates think they will earn and their starting salary?

1. Grad expectations
Results from a study conducted by management consulting firm Accenture showed that salary expectations among pending 2013 college graduates were out of line with the current job market. Only 15% of pending 2013 college graduates expect to earn less than US$25,000 a year, while
32% of employed 2011/12 graduates report their current annual salary is US$25,000.

Before you get depressed, the study was conducted in the US, where the economy is a lot worse and student debt is very high, which would make me rethink the cost-benefit value of a getting a degree there. Fortunately the outlook is a lot better for students who undertake vocational education either after they have had a few years’ experience in the working world or after the degree that didn’t get them very far: “Despite their degrees, nearly two-thirds say they will need more training in order to get their desired job.”

2. Is your salary a boy or a girl?
So in Australia graduates can expect to score a full-time salary of around $55,000… if you are male. The median graduate salary for women is $50,000. The current graduate gender pay gap across all occupations is 9.1%, according to the Australian Government’s Workplace Gender Equality Agency. The interesting thing about the study is that is focuses on graduate pay packets, taking out most of the ‘caring for family’ shtick that often plagues gender salary comparisons, and focuses on full-time roles by sector.

Some sectors appear to be more sexist than others. In architecture and building there is a 17.3% difference with graduate men taking home $9,000 more than women a year, in dentistry it’s 15.7% ($14,400 difference), optometry 8.5% ($7,000) and law 7.8% ($4,300). However graduate computer scientists, earth scientists, pharmacists and engineers who are female earn slightly more than their male counterparts.

Of course the overall gap may be explained by occupational gender segregation (where a lot of jobs that are female-dominated such as childcare, retail and nursing tend to be lower paid compared to male-dominated roles like stockbroking, mining and construction) but why should female dentists to bring home $14,000 less than her male counterparts?

3. Dollars trumps sense
Spare a thought for the ‘graduates’ of Trump University which, as it turns out, is not a real university. New York Attorney General Eric Schneiderman filed a $40 million law suit against property developer Donald Trump and the university for misleading more than 5,000 students who signed up for various courses to learn the billionaire’s real estate investing techniques only to emerge with a diploma-like Certificate of Completion and an opportunity to have their picture taken with a life-size cut-out of the mogul.

Ahem. Just a reminder that Trump knows how to make money. He’s probably not that good at telling others how make money because that would be, like, competition. More commiseration/pointing and laughing at the Huffington Post.

4. Student poverty is real
All this talk of money and we haven’t mentioned that for some students still finishing their course, toeing the poverty line is a reality. It’s a little disconcerting, then, to find that poverty may impair cognitive ability, according to a paper published in Science.

“A person's cognitive function is diminished by the constant and all-consuming effort of coping with the immediate effects of having little money, such as scrounging to pay bills and cut costs. Thusly, a person is left with fewer ‘mental resources’ to focus on complicated, indirectly related matters such as education, job training and even managing their time.”

5. Money fills the trust fund
Money also reinforces trust between strangers and affects cooperation, adds Gabriele Camera, lead author of ‘Money and trust among strangers’ published by the Economic Science Institute at Chapman University. So does money does make the world go round? Er, no. Apparently it increases trust but there is a social cost, according to the experiment conducted for the paper:

“When tokens were included in the experiment, producers could either help in exchange for a token or help unconditionally, as a gift. Almost no gift-giving occurred at all. In comparison, earlier, when no tokens were available, all exchanges had been unconditional. Adding tokens caused the norm of monetary exchange to replace the norm of voluntary cooperation.”

How do you feel about your bank balance now? If you get a little down, just remember money can't buy you happiness although, according to Spike Milligan, "it does bring you a more pleasant form of misery.” (Also, sunshine is free! Enjoy your weekend.)

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