Education and Wage

[jteezie]

I'm curious how does advance education increase one's pay?

I like learning and my situation (GI Bill and employee reimbursements) allows me to pursue it for fun at little to no cost. Now that I'm nearing graduation with my Masters, I wonder how does having a Masters change anything in the workplace? With the current economy, I'm seeing people with Masters get hired at entry level positions designed for Bachelor's degree holders... which makes me suspect that having the masters won't mean anything at work other than possibly getting a slightly higher raise each year or for the year immediately after achieving it.

Stepping back from the "current economy", what typically happens in a "normal" economy? I'm still young so I've not seen the business cycles and I don't have real world observations/experience on this matter.

Finally, my gut intuition suggests that if I want recognition for my academic achievement in the form of a measurable wage increase, I pretty much need to find another job (one that has a Masters listed as a job requirement). Is this what you all have observed over your careers and/or do you have personal experience in this matter?

Thank you all for sharing.

[ir_dizzle]

Originally Posted by jteezie

Stepping back from the "current economy", what typically happens in a "normal" economy? I'm still young so I've not seen the business cycles and I don't have real world observations/experience on this matter.

It really depends on what industry you're in to be honest with you. Some industries such as academic counseling (my wife is a counselor) won't let you have a job until you have a Masters degree. What are you getting your Masters Degree in? What industry do you plan to work in?

[jpg7n16]

Here are some links to consider:

Bureau of Labor Statistics: Education pays ...

Lifetime Earnings Soar with Education – How a Higher Education Leads to Higher Lifetime Earnings

Median Annual Income, by Level of Education, 1990–2008 — Infoplease.com

[jteezie]

I work in finance, but my Masters is in change management (because there's a lot of change in finance and everywhere in general). I plan to stay in finance.

As for those statistics jpg, I am aware of the long run earnings potential of the different education levels, but how does the transition occur in the short run?...

Do people with masters pretty much have to find other jobs that demand and pay for the higher level of education? If this is the case, does my employer have a general expectation that I may leave? Or perhaps having that degree will bump me up in line for a promotion ahead of non Masters holders?

Am I clear with my distinction on how someone transitions their earning potential from one education level to another. I realize some professions are very clear, such as Lawyers and Doctors. Get your degree and you're suddenly you're qualified for certain high paying jobs and you're in high demand, so those people see huge jumps in income. However, there are a lot of degrees that don't have such a clear cut filtering system.

One last thing to refocus the discussion. I'm mainly curious about people's observations. What happened with you or your coworkers got a Masters? Were they promoted, or did they find another job, or did they start looking for a job but stopped looking because they got a raise or something else hush-hush happened?

[jpg7n16]

Originally Posted by jteezie

Do people with masters pretty much have to find other jobs that demand and pay for the higher level of education? If this is the case, does my employer have a general expectation that I may leave? Or perhaps having that degree will bump me up in line for a promotion ahead of non Masters holders?

You get paid for what value you bring to the firm. If you get a PhD, but keep your same job, producing the same value, you should expect the same pay. The only way to get a higher salary should be to find a new position that brings your firm more value. <Or to show how your current position is more valuable than what they're currently paying>

The degree qualifies you for promotions/positions you couldn't qualify for without it. Let alone beating other applicants, sometimes you can't even apply without the degree. Whether those positions are at your current firm, or at another firm doesn't really matter.

The degree may also help you stand out from other candidates applying for a higher paying role. If your degree allows you to provide more value to the firm under a new position, they should pay you more for that production.


And yes - employers always need to expect that you could leave for a higher paying position at a new firm. It's pretty common these days.

[jteezie]

Wow... duh, that is pretty common sense - employers pay for the work that you do. I see it now. So I guess I'm going to fall into the category of underemployed temporarily :/

I wonder how long the average turnaround is for finding a better fitting job (hmm frictional unemployment?). I recall someone in my office who received her MBA earlier this year. We spoke about the tuition reimbursement program and I advised her to continue to request it for this year and not claim it if she does find a new job, otherwise she would be signalling that she does not intend to stick around (the condition for keeping the reimbursement is you have to stay 1 year after the money is disbursed). Well long story short, she's still working here. Don't know what that means for me :P

[MaryB26]

Go with your gut instinct and look for another job.

Education does not equal higher wages.

A job pays what a job pays.

You get paid for what you do and not what you know.

What can you offer to an employer to make it worth their while to hire you?
What do you produce?
Do you increase profits?
Do you generate more sales leads?
Make a list of what you currently do on your job and ask for a raise based on productivity and comparison.
If they will not give you a raise then it is time to move on.

[disneysteve]

Originally Posted by jteezie

One last thing to refocus the discussion. I'm mainly curious about people's observations. What happened with you or your coworkers got a Masters? Were they promoted, or did they find another job, or did they start looking for a job but stopped looking because they got a raise or something else hush-hush happened?

My only exposure to this is with friends who are teachers. And yes, getting their Masters did automatically increase their pay at the job they already had. But I think that's unusual. I don't think it works that way in other fields.

[ir_dizzle]

Originally Posted by jteezie

One last thing to refocus the discussion. I'm mainly curious about people's observations. What happened with you or your coworkers got a Masters? Were they promoted, or did they find another job, or did they start looking for a job but stopped looking because they got a raise or something else hush-hush happened?

I've seen different things happen - I had a co-worker at a previous company I was with; he was in a staff position and the next step above him was a supervisory role. He didn't want the supervisory role nor was he ready for it. He was just getting his Masters "just because" - not to move up in the company; he just figured it was the best thing to do.

I had a close relationship with his boss; she was not going to promote him anyways even with a Masters because he wasn't ready for the position. Since my co-worker wasn't driven to move up further with the company and his boss wasn't going to promote him; his boss read between the lines and assumed he would leave to look for an opportunity elsewhere. And that's what happened after he graduated... he left and his boss was planning for his exit.

It really depends on the situation... Do you like the company you're with? Are they paying for the degree or are you paying for it yourself? Do you want to move up with your current company? I've seen people promoted and people leave with a Masters - it really just all depends...

[jteezie]

Very good insights everyone. I appreciate your real world observations. I have no real world experience with it, so your observations are helpful.

I guess I can make this a little more personal. Well, the company itself is great, the immediate group, I'm not so sure, and the work, even less sure. However, the work is in line with my career goals in finance. My plan has been to leave around June because I want to move to a larger city, which works well with my graduation and some other plans.

I'm currently not in a management position although my pay and title is that of a manager if I were in another department/function. I also think that my masters, which is a management degree, would qualify me to advance to a manager within my group. In practice, I am not sure if that will happen by June, though that is a mini-goal which is reinforced by my recent rapid promotions (2 in the last year).

I certainly am a high performer. I have always done things well beyond the scope of my regular duties while managing to do my work well, so I know I can advance, however I realize that corporate bureaucracies are a bit slow to recognize talent because they tend to take it for granted (I suspect this to be the case with my current group, but I need more time to make this judgment).

Given all that and a few other variables which I probably shouldn't disclose at the miniscule risk that it might jeopardize my identity to a coworker, it sounds like I should continue with my plan to find other employment in my destination city. As an economist, I have always viewed education as a "signal" that helps employers identify people who are capable of doing a job, so my masters will serve as that to filter out better opportunities.