Majors Matter

High school students intending to go to college are given advice that can usually be grouped into two categories.  First, follow your passion.  Second, follow the money.    The first piece of advice, the wording, the imagery conjured when you visualize someone following their passion, feels right.  It feels right to send an army of graduates into the labor force who are passionate about what they've learned and are eager to earn a living doing what they love.  The second piece of advice doesn't sound so nice.  Maybe, you read it and felt a little bit of disgust, you thought about people consumed by their materialistic wants, or maybe you just thought that following the money doesn't sound fun.

Consider the following two hypothetical post-graduation interviews.
Person 1: Derek
Major: Acoustic Guitar Performance
Minor: Music History
Question:  How has the job search gone after graduation.
Answer: Not too bad.  I've put together a pretty good resume and have sent it to several staffing agencies and most of them have responded.  I've had a few interviews but not in any type of job that I'd be willing to take.  I'm more interested in managing bands, or night clubs.  Getting a job at Riverwind would be pretty good...as, you know, like a house band lead guitarist or something.  I've thought about going to grad school since that will increase my chances of getting a good job that might actually be interesting and related to my major.  But, I'd have to take the GRE and I hear there's math on it.  Math is not my thing.  At any rate, I've been working at Barnes and Noble since May to pay the bills.  It's a pretty good job, I like it.  There are a lot of people that work there that I went to school with.  A couple of them had similar majors.  My wife and I went to Branson last week.  We were going to go to Cancun again, but we're trying to save up until I get a job in my field.  They usually pay around 25-30k to start.  You like my wife's ring?  Thanks.  I had to pawn a couple of my guitars but I'll get new ones later, after I've started working in my field full time.

Person 2: Tyrell
Major: Finance
Minor: Accounting
Question: How has the job search gone after graduation.
Answer.  Not too bad.  I put together a resume and started sending it out to companies and a few staffing firms.  I've had a few interviews.  Not any of them actually involve being a CFO or managing wealth.  I went ahead and took a job at MiddleEarth finance.  I basically crunch numbers which isn't the most interesting job in the world.  But, they'll pay my tuition if I do an MBA, and get good grades, or they'll pay for me to take the CFA exam.  I think I'll go the CFA route.  They have fantastic careers and I've learned most of the skills already.  My wife and I just got back from Cancun.  We were going to go to Branson, but then thought we'd celebrate my new job.  It pays around 45k but they bump you up fast.  Oh, and I went out and got this (pulls out acoustic guitar).  I've always been passionate about music, and used to take guitar lessons.  I think I'll start taking them again, I can afford it.

Silly?  Maybe.  But investing in college is a human capital investment.  You are investing in an upgrade of your skills so that you will be able to sell your labor at a higher price than you would without those skills.  The government subsidization of college education has led to a massive increase in the number of majors available as colleges compete for student's money (most of which is debt).  However, the number of majors that actually pay off remain remarkably consistent.  See the link below.

Which Majors Yield Benjamin Piles