Our market research recently yielded an interesting data point: over 80% of US-based supply chain managers do not have a college degree. We were surprised at first…but after some reflection we stopped being surprised.
This is not a new topic. I started to worry about the source of new managers in supply chain years ago, when I was a hiring manager. In the 1990s, the concept of supply chain began to become more relevant. Warehousing grew into physical distribution, which morphed into logistics, and then the broader form, supply chain. A few colleges and universities began to offer degree programs in transportation management; then more of them began to offer it. Some universities started to offer even broader degree plans focused on the term "supply chain." Business schools began to add logistics and supply chain classes to their business administration degree plans.
In the 1990s, more distribution and logistics positions started to list a bachelor’s degree as a preference, but not a requirement. Men and women who graduated with a transportation degree during that time got a thick dose of general business exposure. Many had heavy management focus in their education, either as part of their core degree or as a minor, and came out of school with strong educations and strong training.
As the first decade of the new century progressed, I started to see a trend among the young adults graduating. Many of them were graduating with a supply chain degree, but a minor in marketing. And I started to notice another trend—many of these graduates were less rounded, and they were not as strong as the folks who had come just a decade before.
More professionals in our industry are starting to ask, "What happened to the quality that is supposed to come with the degree?" And now that I am becoming older and gray-haired, I, myself, am starting to ask the question more often.
More troubling is that many of these grads really wanted a sales or marketing position, not an operations position. Work in a warehouse? No, thank you!
When you look at the issue of demographics, the source of the future professionals in our industry—i.e., where they will come from—gains importance. The baby boomers in management and labor today are aging and retiring. The generations coming after us are smaller. But demand for supply chain and logistics services will continue to grow.
The question is not academic. Or is it?
In 2009, I asked the question with a focus on entry-level management in this article from Supply Chain Digest. I thought about it from the viewpoint of the attractiveness of a career in supply chain. While I focused on management in that article, I became more concerned with the question of labor as time passed. Later I discovered a market-driven solution in the warehouse-rich Lehigh Valley of eastern Pennsylvania.
I wrote another Supply Chain Digest article about the warehousing and distribution vocational program at Lehigh County Technical Institute in Pennsylvania. LCTI uses an operating distribution center to teach high school aged students the vocation of distribution and transportation.
In my interview with the executive director, I posed the question, "How relevant is a college education?"
He replied, "the question is not how relevant college is, but when is it relevant?" This is an important point. The question can be when, not if. When in the life-cycle of an individual does a college education become relevant?
There is this notion that people with a bachelor’s degree make more money than folks with just a high school diploma. A College Board report, Education Pays 2010, highlights that as of 2008, bachelor’s degree graduates earned a median $21,900 more a year than high school graduates; $55,700 vs. $33,800. Moreover, people with even some college but no degree earned a median 16% more than high school graduates.
Being the skeptical college graduate that I am, however, I noticed that we are talking about the median. In many news articles about the report, the writers replaced median with average—and the two are not the same. The median is simply the mid-point between the highest reported income and the lowest reported income; it is the middle of the population. The median does not show how many people made more than the mid-point or less than the mid-point. Without the actual averages, you can’t even begin to understand the distribution.
The data in the graph from the report shows the median income for high-school diploma holders as $33,800. Now remember, this is the mid-point, and the data does not report the high end of the group or the low end of the group—only the midpoint. We can only guess what those points are.
I believe that in any of these groups there are people who are paid very little—people who are working below their education. If we assume that the bottom end is $0—as in zero earnings, the top end would be twice $33,800, which is $67,600. If the bottom is higher than zero, the top must come down, since the median is the mid-point.
I don’t know about you, but I know several people in supply-chain management positions who do not have a college degree and are making more than $67,600. So there is something wrong with this data.
Now how about the top end of the group, the ones who have professional degrees? The median as reported is $100,000. Even if the bottom is again “zero,” the top would be $200,000. And guess what—there are lawyers who are making more than that.
So, is the College Board report using some high-grade bovine fertilizer for data? Could be; since they really don’t show us the real data, we can’t know.
So, can we say here that there is at least some room to doubt the empirical accuracy of the case that if you get a college degree you will make $X more money than if you have only a high school degree?
Could it be that college is no real determinate of how much a person can earn?
Well, there are some who believe that to be true. An article in New York Magazine highlights the argument of James Altucher, a New York–based venture capitalist and finance writer, and Peter Thiel, a venture capitalist with strong misgivings about college.
Napoleon Hill proposed in his 1928 book, "The Law of Success in Sixteen Lessons," that you become successful by having a Definite Aim, Self Confidence, A Habit of Saving, Initiative and Leadership, a Habit of Doing More Than You are Paid For, Accurate Thought, Concentration, etc. Nowhere on his list is a college degree.
Even today, there are examples of very successful young people who do not have college degrees.
So, what is the value of a college degree? Could it be a waste of our resources?