Apr 12, 2024
People are often told to go to college so they can get an education and hopefully a good job so they can live a comfortable life. But many young Americans are realizing it isn't that easy.
Abby Ferrell, who goes by @placeofpods on TikTok, posted a clip on Feb. 5 in which she tears up over this piece of advice.
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“You just feel lied to,” the Texas resident said. “You thought that if you just went to college and got a degree, you’d be able to afford a house and things that make you happy.”
Ferrell, who says she has a biology degree, claims her post-college job barely pays her enough to cover her rent and groceries. But is her situation unique or a nationwide trend?
Productivity vs. pay
It turns out that what Ferrell is experiencing is less of a college issue and more of a salary stagnation issue.
In another video, Ferrell talks about how her father was able to support a family of four and own seven acres of land on a $100,000 salary in the early-to-mid-2000s. But now, that may not be possible.
“I can’t even support myself on a salary of just under $60,000,” Ferrell, who is single and childless, griped. “Make it make sense.”
It isn’t just Ferrell complaining. Salaries are losing their value, as a result of the “productivity-pay gap,” which is the difference between how much income the economy generates and workers’ wages. From 1979-2022, productivity increased 64.7%, while hourly pay only increased 14.8% — around 4.4 times slower — according to the Economic Policy Institute.
Ferrell might come across opportunities for advancement in her career, which could increase her income, but even so she may continue to face the productivity-pay gap.
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Student loans bring you down
A college education also brings its own set of financial issues for many in the form of student debt.
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Over 40% of people who attended college took out student loans, according to the Federal Reserve. The median amount they owed was between $20,000 and $24,999.
These loans, of course, come with interest. The average borrower takes about 20 years to pay off their student loan debt, according to The Education Data Initiative, while some grads can take as long as 45 years to pay them back.
Is college worth it?
Ferrell appears right that the old advice no longer holds: a college education is no guarantee for a high salary and material comfort.
But the education college does provide you can't be taken away. Legendary investor Warren Buffett, for example, argues that acquiring knowledge and skills provide something inflation-proof: a skillset that people will pay you for.
“Whatever abilities you have can't be taken away from you. They can't be inflated away from you,” he said during Berkshire Hathaway's 2022 shareholder meeting. “The best investment by far is anything that develops yourself, and it's not taxed at all.”
One of the skills Buffett has said is inflation-proof is communication — something Ferrell has in droves, as her TikTok video has reached 1.5 million views and nearly 18,000 comments.
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Sabina Wex is a writer and podcast producer in Toronto. Her work has appeared in Business Insider, Fast Company, CBC and more.
