The Case For The Business Major

Source: Georgetown University’s Center on Education and the Workforce

Source: Georgetown University’s Center on Education and the Workforce


Indeed, as a recent report from the Graduate Management Admission Council showed, companies working directly with business schools plan to hire more MBAs this year than they hired in 2015. Some 88% of corporate recruiters who work directly with graduate business schools plan to hire recent MBA graduates in 2016, up 8 percentage points from last year and 33 percentage points higher than 2010, the lowest point of the Great Recession.

For those without a college education, the news is not good. “The Great Recession decimated low-skill, blue-collar and clerical jobs,” the Georgetown report found. “The recovery added primarily high-skill, managerial and professional jobs. For the first time, workers with a bachelor’s degree or higher make up a larger share of the workforce — 36% — than those with a high school diploma or less.”

In effect, the authors of the report found, the U.S. is in the midst of two job recoveries: Workers with a high school diploma or less must earn postsecondary credentials to compete effectively in growing high-skill career fields.


“College access and success have been the defining factors in the growing economic divide in America since the early 1980s,” the authors wrote. “That is when the wage premium for college graduates began its meteoric rise. Since that time, access to college programs with labor market value has accounted for as much as 80 percent of increase in economic inequality.”

The authors noted that underlying structural changes ensure that those who benefit from economic progress do not tend to be the same people who are hurt by it. “Since the 1980s, those harmed the most have been high school-educated workers in blue-collar jobs, especially those in the manufacturing industry. Those who benefit the most, on the other hand, are college-educated workers in high-skill professions in service industries. In recent recessions, the industries and occupations that lost the most jobs are much less likely to be the industries and occupations that are adding jobs in the recovery.

“The Great Recession has followed this classic pattern in terms of how workers with different education levels are affected during recessions. The least educated workers, those with a high school diploma or less, were the first fired in the recession and the last hired in the recovery. Conversely, those with the most years of college were the last fired in the recession and the first hired in the recovery. The major reason why jobs for high school graduates have not recovered from the Great Recession is the structural shift in blue-collar and white-collar jobs.”


Ultimately, the authors conclude that there are massive costs involved in the shift. “The human cost of these trends for workers without postsecondary education, their families, and their communities has been immense,” they wrote. “As factories and mines have closed and office and administrative support functions have been automated, men and women without a college education — who were previously able to build a middle-class life and raise a family — found themselves out of a job, often for prolonged periods of time and, in some cases, even detached from the labor force.

“The labor force participation rate has declined from 66.5% in 1989 to 63% in 2016. Those who were lucky enough to find another job after being laid off or displaced often did so at a price — lower wages, which often take decades to rebuild to their pre-displacement levels. This economic state of affairs has had a traumatic impact, even on sectors of the population that have historically fared reasonably well in American society.”

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