Thursday, March 3, 2016

Pay for Studying?

The article below is one I wrote with economist Geoff Shepherd (Amherst ’57) in the early 1970s. I’m posting it here unchanged because it may provide some historical amusement in this form. I may seek wider publication, in which case I would update the numbers. Suggestions welcome.

                   PAY FOR STUDYING?

        Jeff, a high school student, is the fry man at McDonald's after school and on weekends, earning $3.85 per hour. He finds the job boring, but he needs the money--to pay for gas and car insurance, to buy the latest clothes, to attend rock concerts with his friends.  The fifteen hours a week he works doesn't seem like much, but it cuts into his love life, his sleep, his hanging out with friends--and, of course, his schoolwork. In fact, when he does hit the books he's often too tired or rushed to make sense of them, and frustration or fatigue may set in before he's finished. But he feels the extra money is worth the sacrifices.

        But is it? What Jeff and students like him working in clothing stores, gas stations and video outlets often fail to understand is that they already have a job--being a student--and it is a job that in the long run pays a lot more than they can earn doing part time work that does not lead to a satisfying career.

        As any parent can tell you, and as I can confirm as a high school teacher, appealing to a teenager's desire for culture, scholarship or intellectual growth is often a doomed effort. Far better to make your case on economics alone.  It makes good sense to help people like Jeff--our students, our children--understand that they are earning money for studying, and that time they take away from their school work is costing them future earnings.  Our society operates with an elaborate career system, one that pays very well.  The catch is that the system rewards you to wait, to collect the big money later rather than the smaller money now.  A rough calculation can show how much per hour a student earns from studying, so we have a figure to compare with the $3.85 per hour.

        Let's say that a student simply decides to study harder, that he or she dedicates an extra hour per day to study during the four years in high school--afternoons, evenings, weekends. The additional seven hours per week of study, taken from Nintendo or the soaps or Burger King, does not require the abandonment of friends or life style. Jeff will still have plenty of time to hang out with his buddies. Thus for a typical 36 week academic year, he would study an additional 252 hours. Over the four years of ninth through twelfth grade, he would put in an additional 1008 hours of studying.

        What are the benefits of this commitment of time?  To keep the issue simple, and acknowledging that individual differences lead to different results, we can say that the additional study time would lead to higher grades: a B student might start to earn A's, or that a C+ student earn B's.

        In addition to higher grades, of course, students who spend their time with Shakespeare, Jefferson and Einstein also gain a greater understanding of themselves and their physical and social worlds.  They learn to become better thinkers and workers. Equally important is the enhanced self-image: Students who succeed through hard work in high school have higher expectations of themselves, and these expectations breed success. Becoming the top shake guy at Burger King is not likely to provide lasting self-esteem.

        Let's say that because of the higher grades the student can go to college or is accepted at a "better" college than otherwise, and then the student continues to prosper because of the benefits of knowledge and study habits acquired in high school. Thus, this student will continue to devote seven additional hours to studying through four years of college, where the academic years are typically 28 weeks long, for a total of 784 hours more than he might if he had not been enlightened by this essay. Thus the total investment of time in high school and college is 1792 additional study hours.

        How does this translate into money earned? When students leave college, those who have demonstrated success will, depending on their chosen field, be offered jobs at higher starting salaries, not to mention greater autonomy, responsibility, and personal satisfaction, or at least they will have such jobs available to them. Their hard work while in school has given them an enormous advantage in the career system when compared with their peers who enter the system with less to offer an employer, and especially when compared with those who work low paying jobs which are not part of the lucrative career system at all.

        Let us further estimate that the extra studying leads to a 20% salary differential, based on an average salary of $40,000 per year, spread over 50 years of work and retirement. That comes to $8,000 per year, multiplied by 40 years, or $400,000.  Divide that figure by the 1792 hours, and we find that Jeff will have been earning $223.21 per hour for studying. To make the figure as conservative as possible (and to allow for taxes, bad investments and other setbacks), let us round the figure down to $100 per hour. It is still an impressive hourly wage, one any high school burger-flipper would gladly accept.

        How accurate is that figure? Of course, the salary differential is only a rough estimate. In some fields, such as law or business, the differentials will probably be greater, while in others, such as education, they will be less.  Individual circumstances will also influence the final figure: some will dedicate time and energy to family rather than career, some will pursue careers where success is not measured in monetary terms.  Accidents may strike to help or hinder one's earnings, and it helps to be born rich. Nevertheless, granting all these individual variables, there is a big payoff for working a little harder to do well in the career system.

        The implications are obvious, though the overwhelming difference in hourly earnings ($3.85 vs. $100) will likely be wasted on the young, who want their payoffs now. For many students, jobs are necessary to pay for college or to help out with family finances, but the fact is that the long term financial rewards go to those who work hard in school.  So Jeff, son, put down that spatula and pick up a book. If not for your father's sake, or higher culture's, then for your own financial future.  Do you want gas money for your Chevette now, or a BMW later?

Comment from Angie:

I had a part time job when I was in high school. I worked in a dingy basement pricing merchandise. I was then promoted to work upstairs as a cashier. I had to figure out sales tax and make change. I also worked in my parents' business where I did my homework in between packing ice cream and selling other products. I learned some useful skills. I guess what I really learned was that I wanted to further my education as a result of having this work experience. I was the top student throughout high school. When I was a sophomore in high school, I was the substitute teacher for Latin, Math, and English  senior classes. I received high school and university scholarships. So, my part time jobs did not affect my future earning power and studying in high school. It was not easy. I worked harder in high school than I ever worked at the 8 different universities, community colleges I attended.

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