http://economix.blogs.nytimes.com/2012/01/05/want-a-job-go-to-college-and-dont-major-in-architecture/?ref=business
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"Idealism increases in direct proportion to one's distance from the problem." (John Galsworthy)
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In today's "Economix" (NY Times Blog), Cathrine Rampel shares her perspective on the new report from the Georgetown Center on Education and the Workforce (click on the PDF in her post).
The report gives an excellent perspective on unemployment rates and pay by major. While unemployment for new graduates is around 8.9%, the rate for those with only a high school degree is 22.9%. And, while we all know that Sarbanes (or the "Accountants and Lawyers Relief Act") has provided lifetime employment for people with BA, MS (Accounting) and CPA certifications, the actual numbers are striking: a graduate degree holder in Accounting can expect a 3.8% unemployment rate for his/her profession. Just for the sake of perspective, North Dakota's unemployment rate is at, roughly, 3.2% because of the "Shale Oil Boom" and that 3.2% is really those who are trying really hard not to work!
Georgetown had to use age breaks for the study data so "recent college graduate" means 22 to 26 years old, "experienced college graduate" 30 to 54, and "graduate degree holder" also 30 to 54.
Unemployment was highest among Architects (13.9%).
And, it's pretty obvious that people employed in education, psychology and social work don't make much money even though they have very low unemployment rates. The supply/demand equation doesn't always work.
The data for Engineering is what I expected but I was disappointed that Petroleum Engineering wasn't broken out. My guess is that in a study as large as Georgetown's, that wasn't possible or relevant statistically. Petroleum Engineering is a major where the supply/demand equation does work. While I don't know the current numbers, I have seen starting salaries as high as $125,000 in that major. But, that major is very cyclical. With the average age in the oil business trending around 58, they can't get enough young engineers. In ten years, that could all change. It has in the past.
Overall, I'm not sure what a recent college graduate with a Liberal Arts degree is doing (9.2% unemployment rate). My strong suggestion would be (and has been) graduate school: suddenly, the 9.2% drops to 3.8%.
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ReplyDeleteSarbanes is necessary, but technology is reducing the need for lawyers and accountants. However, sometimes I do wonder how much of a difference audits make. How does EY sign off on Lehman? EY partners on that project should be fired. The PCAOB reports on audit firms. "http://pcaobus.org/Inspections/Pages/default.aspx" - this link hosts the reports. In reality, Sarbanes was not written sufficiently well. Financial analysts publishing stock research and ratings agencies have the same issue.
ReplyDeleteSince companies pay those that review them, companies can always switch reviewers. Financial analysts experience this as they go negative on a company. Such companies respond by taking there finance business dollars (i.e. consulting/investment banking) to a different company. To be direct... companies can influence results by hiring people most likely to give them the answers they want.
In reality, many people do not care about accounting. Having experienced this firsthand, Sarbanes is the LEAST that can be done. However, the government cannot enforce ethics. Auditors will miss things, allow aggressive accounting, and permit insufficient disclosure.
My guess is that you worked at one of the best petroleum firms in the industry. Maybe the accounting was likewise. Maybe Sarbanes was just somebody telling you what you already knew. However, too many companies insufficiently review their financial data and the processes that create that data.
I would go farther if I was on the board of directors. I want to know how every detail is tracked/measured and review reports from a small army of internal auditors to spot deviation from corporate policy. Bad cost management leads to inaccurate resource allocation. In every organization, a fragmented group of people know about departmental deficiencies and managerial issues. Their productivity will go down. They will take a do whatever told without question attitude, although their experience says otherwise. The most talented of this bunch will leave the organization too. Some may taint the corporate culture, talking negatively incessantly behind closed doors. These guerrilla negative talks slowly chip away at motivation, thus efficiency and effectiveness. Turnover can say quite a bit. Then again, are board of directors still exclusive country clubs? How many boards contain incompetent members? How often do financial analysts just take marketing materials from companies and repackage them into research that goes off to institutional investors?
Maybe we need a way for losers to lose quickly/safely and winners to pick up the slack from losers. Try selling that to Congress! Whatever. I am just a dreamer.