Category Archives: jobs

2010’s Worst Paying College Degrees Ten Years Later

In 2010, U.S. compensation and data software firm Payscale identified the 10 lowest paying college degrees for those starting their first jobs in their fields after graduation. We wondered how on the mark that list was, so we tapped Payscale's 2020 data for starting wages by college major to see if things got relatively better or worse for today's graduates in those fields.

The results are shown in the following chart. The original 2010 data is shown in blue and the newer 2020 data is shown in green. In between, in orange, we've adjusted the 2010 starting salary data for inflation to be in terms of 2020 U.S. dollars to make those older salaries directly comparable to the actual starting pay for graduates in the listed fields in 2020.

Starting Pay for 2010's Worst Paying College Degrees

After adjusting for inflation, we see only two degrees where the actual starting pay for graduates in 2020 is ahead of 2010's inflation-adjusted level: Athletic Training and Elementary Education. Horticulture comes close to breaking even, so to speak, and the remaining fields would appear to have become even less rewarding.

Of these less rewarding degrees, Culinary Arts presents the biggest gap between 2010's inflation adjusted pay and 2020's actual starting pay, followed by Special Eduation and Paralegal Studies.

In 2010, Payscale also indicated what an individual holding these degrees could expect to make at a mid-career point, some 10 or more years after graduation. Since it's 10 years later, we thought it would be especially interesting to see how 2020's actual mid-career pay compares with 2010's inflation-adjusted mid-career pay. Our results are shown in the next chart:

Mid-Career Pay for 2010's Worst Paying College Degrees

Once again, the fields of Culinary Arts and Athletic Training come out the furthest ahead after accounting for inflation, but Theology graduates also gained more income than would have been expected based on 2010's inflation-adjusted pay.

Most the other fields saw their 2010 graduates making something within a several percent of their 2010 peers' inflation adjusted pay, with one big exception, which looks like it is in error.

According to Payscale's 2020 survey data, individuals holding degrees in Special Education with 10 or more years of experience saw the average mid-career pay in their field collapse. At $54,500, it is just $700 higher than 2010's non-inflation adjusted pay, some $9,800 below what adjusting the mid-career income for 2010 would predict.

The Bureau of Labor Statistics indicates the median pay for Special Education teachers was $61,420 per year in 2019, which is more in line with Payscale's 2010 inflation-adjusted mid-career income figure.

We sampled other income data for other fields, which appears to be in line with Payscale's surveyed reults, so the 2020 mid-career pay figure for Special Education degree holders appears to be an outlier.

Overall, it appears most of 2010's lowest paying degrees for college graduates turned out to be as bad for pay 10 years later as 2010's data suggested they would be.

Teens, Young Adults on Different Pandemic Job Recovery Tracks

U.S. teens are leading the coronavirus pandemic recession job recovery. But why?

Conor Sen runs through a number of contributing factors that have led to this remarkable outcome:

What makes teenage employment useful to study right now is that teenagers are less affected by the factors holding back labor supply than any other demographic. If they lived at home with their parents, they weren’t eligible for economic impact payments. If they were full-time students, they’d be ineligible for unemployment insurance, making enhanced benefits a nonfactor. They’re unlikely to be parents squeezed out of the labor force by closed schools or a lack of child care. They’re obviously not older workers who may have accelerated retirement plans during the pandemic. And teens were less likely to get seriously ill from Covid-19, and so perhaps less likely to avoid working for health-related reasons.

Barry Ritholtz offers a competing theory:

In 2007, before the great financial crisis, the national minimum wage level was a paltry $5.15. This was not all that long ago. For a teenager with even the most modest withholding / FICA, their take-home is so small it’s not worth it to work. You can see that in the trends over the preceding decades. By most measures — productivity, profitability, inflation, exec comp — the minimum wage has lagged badly. Teens did the math, and said WTF, why bother?

But the minimum wage began to rise during the financial crisis despite skyrocketing unemployment. It was raised in 2008, and then in 2009, and again in 2010. Post GFC, it’s been $7.25 an hour.

Not coincidentally, at exactly that time, the labor participation rate of teenagers began trending upwards. Today, it’s even higher than it was before the pandemic began. Maybe it’s boredom, perhaps some teens just want out of the house where they’ve been stuck with mom and dad and their siblings during the past year.

Or just maybe, local employers are raising wages sufficiently to make summer jobs attractive to teens.

That is an interesting hypothesis and one we can easily investigate. Starting with the Bureau of Labor Statistics' 2020 report on the characteristics of minimum wage workers, which reports that 1,112,000 Americans earned the federal minimum wage or less in 2020. Of these, 222,000 were teens from Ages 16 through 19. Teens therefore accounted for nearly one in five minimum wage workers, the second largest group by age in the U.S.

The largest age group for minimum wage workers is young adults, Age 20 through 24. In 2020, they accounted for 307,000 minimum wage workers, or nearly 28% of the total. Together, teens and young adults represent just under 48% of all those earning the U.S. federal minimum wage or less.

If the hypothesis that local employers offering higher-than-federal minimum wage is what is drawing teens into the U.S. labor force holds, it stands to reason that young adults would be likewise motivated to enter or re-enter the job market for the exact same reason, since they make up a larger share of minimum wage workers. That would be especially true during the last several months when employers have responded to a shortage of labor by boosting wages.

The following chart reveals what happened during that time for both teens (Age 16-19) and young adults (Age 20-24). For good measure, we're showing the data from January 2007 through May 2021 to capture Barry's period of interest, which confirms the data for both groups generally follow the same patterns, but we'll be focusing on more recent months in our analysis.

Percentage of U.S. Population Employed, Age 16-19 and Age 20-24, January 2007 - May 2021

The employment-to-population ratio of teens and young adults peaked in February 2020, just ahead of the arrival of the coronavirus recession in the United States. The percentage of employed for both groups plunged before bottoming in April 2020, after which both saw a steady recovery through October 2020. The onset of the second wave of coronavirus infections through the end of 2020 saw that recovery stall, with overall employment-to-population ratios holding relatively steady during this period.

The data for both groups begins to diverge after January 2020, with the employed share of young adults holding steady while the employed share of teens has risen. Since this period coincides with increased demand for labor and rising wages, the absence of an increase in the share of young adults becoming employed in this period means we can reject the hypothesis that teens only sought jobs when entry level wages rose higher than the federal minimum wage.

As for what has led to this situation, we're afraid that employment data is subject to an abundance of confounding factors, which makes determining which factors are significant difficult to untangle. We think Conor Sen's analysis pointing to teens' ineligiblity for pandemic unemployment benefits deserves greater consideration, especially since teens and young adults aren't very different from one another with respect to the other factors he mentions.

We would also suggest investigating to what extent employers desperate to fill jobs may have lowered their standards for new hires. If we're talking about standards that favored previous experience, training, or education in hiring, then we may have a good candidate for explaining why teens and not young adults are leading the job recovery in 2021.

References

U.S. Bureau of Labor Statistics. Labor Force Statistics from the Current Population Survey. Employed persons and employment-population ratios by age. [Online Database]. Accessed 14 June 2021.

U.S. Teens Lead Coronavirus Recession Job Recovery by Age Group

U.S. teens have become the first demographic group to fully recover their pre-coronavirus pandemic recession job levels as measured by percentage of the population employed.

That surprising result is visible in the following chart, we've tracked the non-seasonally adjusted employment-to-population ratio the various 5-year age group cohorts whose employment status is tracked through the Current Population Survey. The chart covers the period from January 2017 through May 2021, where February 2020 represents the last month before existing trends were broken by the negative employment impact of the coronavirus pandemic arriving in the United States.

Percentage of U.S. Population Employed by Age Group, January 2017 - May 2021

In the next chart, we're showing three separate snapshots in time, for February 2020 (before), April 2020 (the bottom), and May 2021 (the latest data at this writing). The chart makes it very easy to see that the employed share of the teen population has surpassed its pre-coronavirus level, unlike every other age demographic group.

Post-Coronavirus Recession Employment to Population Ratio Job Recovery by Age Group, Snapshots on February 2020, April 2020, and May 2021

With respect to all other age groups, teens are the least educated, least skilled, and least experienced segment of the U.S. labor force. And yet, this demographic group has the first to recover to its pre-coronavirus recession level of employment. We'll explore the possible reasons for that in an upcoming post.

References

U.S. Bureau of Labor Statistics. Labor Force Statistics from the Current Population Survey. Employed persons and employment-population ratios by age. [Online Database]. Accessed 14 June 2021.

How Lucky Is Too Lucky in Minecraft?

Earlier this year, a cheating scandal erupted in the world of competitive computer gaming, where a Minecraft player recorded a world-record setting speedrunning round that was too good to be true.

Here's how PC Gamer described the controversy, which involves a popular Minecraft player who goes by the moniker "Dream":

Dream's popularity is largely thanks to the YouTuber's Minecraft speedrun videos, where he tries to complete the game as fast as possible, and their Minecraft manhunt series, which is ridiculously popular. Dream's speedruns continually break records and make the Minecraft world speedrun leaderboard, to the astonishment of many viewers. During this success, suspicions arose about the legitimacy of some of his runs, and in particular, accusations arose about Dream tampering with the game to get better luck.

The accusations arose in October 2020 from a fellow Minecraft speedrunner (whose tweets have since been deleted) who reported seeing higher RNG drops for key items in a run submitted by Dream earlier that month, the same run that placed 5th on the world leaderboards.

Minecraft speedruns are officiated by a team of moderators from speedrun.com and this accusation prompted the team to investigate. In December, they released a 29-page long research paper and accompanying YouTube video summarizing the two-month investigation.

Here's the video for the official moderator's analysis, which is a little over 14 minutes long. Don't watch it yet. Just scroll past it for now and come back to it if you want to later....

The reason we've suggested holding off in watching the official video is because there's a much better video that explains how unlikely the world record-setting accomplishment was, featuring Matt Parker. At nearly 40 minutes long, it is nearly three times the time investment to watch, but you'll be rewarded with a much better appreciation of why Speedrun.com's officials ultimately rescinded Dream's world-record setting title for being "too lucky."

Now for the real mystery. Other than for establishing bragging rights, why does any of this matter?

A potential financial motive can be found in the PC Gamer article:

With 15.4 million subscribers and many of his videos hitting anywhere between 20-60 million views, it's safe to say that 2020 was one heck of a year for the Minecraft YouTuber, Dream. The speedrunner quickly rose to fame, gaining millions of followers so quickly that his subscriber count grew by 12 million between January and November last year alone.

Those rapid growth stats led us to ask "how much is having someone watch a video on YouTube worth to the video's creator?"

Vloggergear answered that question back in 2018, which is useful because even though the values may have changed in the years since, the method for finding the value to a Youtube content creator will be similar.

YouTube uses a method called CPM or “Cost Per Mille” which is a marketing term for cost per 1,000 views or in some cases impressions. Typically the CPM for YouTuber can range from 20 cents to $10 per 1,000 views. But typically an average channel will get about $1.50 – $3 per 1,000 views.

Let's say Dream's channel is at the bottom of the "average" scale. At $1.50 per 1,000 views of just one speedrun video, 20 million views could net $30,000.

A survey of Dream's YouTube channel indicates a posting frequency of 1-2 videos per month. We counted 23 videos that were clearly less than a year old, with a cumulative view total of 842 million. At $1.50 per 1,000 views, that's $1.263 million. And that is a low end estimate.

That revenue, even in the face of the Minecraft speedrunning scandal, perhaps explains Dream's response to having a world record title revoked:

It's a thorough report and, many statistical graphs and math calculations later, the team came to the conclusion that Dream was cheating by modifying the game. When moderators announced their decision, Dream categorically denied the accusation but has since respectfully accepted the team's conclusion without admitting fault.

When you're on track to collect over $1.2 million a year as a low end estimate for making online videos of your video game playing results, there's not much point in spending a lot of time contesting the statistical evidence for the sake of holding onto a title. Especially if like Dream, you can continue averaging between 30 and 38 million views per the handful of YouTube videos posted since the controversy erupted. It's also why the officials really aren't all that upset either. Plus, we haven't even mentioned Dream's revenue stream from merch yet, which we understand is pretty substantial in its own right.

In a lot of ways, it's a modern day replay of the 1950s quiz show scandals.

Now's the point in time to go back to the officials' 14 minute YouTube video if you like. Or to rethink your career choices.

16/11/20: Retail sales, Sector employment and COVID19 recovery

Retail sales suffered a sharp shock from the demand contraction following the first phase of COVID19 pandemic. As of the end of September, based on the preliminary estimates from the U.S. Census Bureau, total volume of retail sales in the U.S. has fully recovered to pre-pandemic levels:


Based on cumulative retail sales over trailing 12 months period, September 2020 stood at USD 5.519 trillion, which is USD48.371 billion above 12 months trailing cumulative for January 2020, and USD121.178 billion above the same measure for September 2019.

The same cannot be said about the recovery in the retail sector jobs:


As of October 2020, total employment in the U.S. retail sector stood at 15,173,500, 498,500 down on February 2020 and 471,200 less than in October 2019. In fact, the problem with the retail sector employment has been evident since the start of this Millennium. Held down by automation and increasing sales volumes flowing through web based retailers, the overall sector sales increases did not translate into sector employment growth. Over the last 10 years through September 2020, retail sales by value rose a cumulative 37%. Over the same period of time, retail sector average hourly earnings grew 27%, or 8 percentage points less than total private economy average hourly earnings inflation. Meanwhile, in 2006, $1 in hourly earnings of retail sector employees wages supported, roughly $1,380 of retail sales. As of September 2020, this number is almost $1,534.