Why a STEM Degree Does Not Guarantee a Higher Salary

If there is one domain that is entirely forward-looking, that is education. Every time you drive your child to school, help him with homework and encourage him to study, you make an investment in the future. You do it to be certain that your son or daughter’s future is bright, perhaps even more so that yours was, and that they will have a place in the world.

Society inscribes value to its members through monetary earnings. Money is the way in which we agreed to be evaluated for our practical worth to others. This happens once learning is largely complete and you enter the field of work as a fully-fledged member of society. As a result, a higher salary is the coveted prize at the end of an educational process.

However, society is not static. Primarily through the development of technology, it perpetually changes, making the above-mentioned values of its member change at well. Who is most useful to society? Those who participate in its future development. For that reason, STEM degrees, seen as a pathway to financial success, have been the first choice in education.

What is a STEM degree?

STEM stands for science, technology, engineering and math. Highly demanded across numerous industries and promoted by educators for many years, STEM degrees form the basis of the workforce needed for the future.

Greatly varied in specializations, STEM degrees can be split into as many as 415 subdivisions. These go from IT-related specializations to actuarial science, chemistry, nuclear physics or directed energy systems. According to data provided by the Bureau of Labor, while varied, 93% of all STEM-related occupations had wages above the national average. Moreover, the same Department predicts 1.2 million more STEM jobs to appear by the end of next year.

Throughout history, the American economy has been at the forefront of development due to its ability to innovate. While other countries focused on mass production, the United States coupled it with new technologies, coming up with renewed methods and products that outvalued all others. To continue that legacy, the America COMPETES Act of 2007 was adopted to support the development of initiatives promoting STEM subjects.

Due to governmental encouragements and the best post-graduation job perspectives on the market, STEM degrees are highly sought after as safeguards of a financially secure future.

STEM Education & Jobs

Jobs in STEM domains are valued around the world. The most obvious example is that of software engineers, for which we have been seeing an almost global increase in demand in the last years. Overall, the average median hourly wage for STEM jobs is $37.44, greatly surpassing the median of $18.68 for all other types of jobs in the U.S. market.

Until now, STEM occupations with the highest annual wages were petroleum engineers, architectural and engineering managers, computer and information systems managers, natural science managers and physicists.

Employment in STEM occupations grows year after year. Between 2009 and 2015, STEM fields grew by 10.5%, meaning 817,000 jobs. Projections also show that most domains that require a STEM degree will grow in the future, with mathematical science occupations growing with as much as 28.2%. The computer occupational group is also set to rise by 1 million job openings from 2014 to 2024.

Failures of the Education System

In the United States, the education system has failed to meet the needs of the jobs market. This starts as early on as middle school and continues throughout high school. When comparing the scores in mathematics between the U.S. and other OECD countries, the National Science Foundation uncovered the fact that the U.S. math score was lower than the scores of most countries.

Women are also vastly unrepresented in STEM fields. If in 1985, 37% of computer science bachelors were women, in 2014 only 17% of computer and information sciences graduates were women. This reality goes against the general trend in education, in which 57% of all bachelor degree recipients are women.

With women discouraged from earning a STEM degree, a huge amount of potential is lost, which in turn translates to losing the ability to innovate. Conversely, 88% of all science and engineering jobs were taken by white and Asian workers.

The Supply

A new perspective to STEM degrees is given by thinking of them as just another product on the market, even if it is the present and future job market. Subjected to the same rules of supply and demand, STEM degrees will be valued accordingly.

Logically, the primary drive that pushes the salaries of STEM jobs higher than all others is the fact that the demand for them is not nearly met.

Depending on specialization, mathematicians, financial advisors, actuaries, IT managers, psychologists, web developers and research analysts all earned well above the national average. However, it is worth to note that among the top STEM jobs, web developers had the highest number of projected jobs (39,500), the lowest median salary ($64,970) and the highest percentage of unemployment (3.6%).

In the few STEM fields where demand has been met, such as web developing, salaries are not increasing as fast as in other fields. Moreover, the unemployment level has grown. When a product oversaturates the market, its value begins to drop. We have seen it in terms of jobs in the financial sector and various industrial sectors.

This saturation will occur due to the lag in the educational system. As they cannot match the demand that right now defines the STEM job market, high schools and universities will renew their efforts to educate more students in STEM domains. As a result, the supply will constantly increase over time. However, this reality is not visible to most right now as setting up a science department and educating generations of students takes time.

The Competition

Technology-related industries are a highly competitive and globalized sector of the economy. In addition, it has a high velocity when compared to other sectors, meaning that fundamental changes occur almost every 5 years. Any delay is costly and constant innovation is paramount.

As we have seen, the U.S. has fallen behind in the race to educate its youth in STEM fields. The same lag mentioned before causes IT companies right now to look overseas for the technicians and STEM specialists. Some corporations even wholly export the departments charged with innovating to other countries, making investments in their educational systems and capacities.

As the ability to innovate leaves the U.S. borders, so will the highest earning STEM jobs. The surviving domains and degrees will see a greater influx of graduates, finally produced with delay by the American schooling system. With an increased supply of workforce and nowhere to put them, pay levels will steadily decrease. Demand will be quenched and the market will remain oversaturated by the “product” of STEM degrees.

In the United States and all over the globe, many parents direct their children to STEM degrees in order to give them a future safe from unemployment. Too many. Their efforts come in too late and will destabilize the job market in the field, adding a growing workforce to a domain that has shown growth limits in certain areas. As a result, STEM degrees will not be the guarantee of a job, not to mention a higher salary, that they used to be.