Higher education does lead to higher incomes: University of Ottawa study  Banner Image

Higher education does lead to higher incomes: University of Ottawa study

Article and Photo from the thestar.com

Stop mocking that university degree as just a bachelor of barista — new research shows Canada’s post-secondary grads really do land jobs with healthy salaries, suggesting the Ivory Tower isn’t a waste of time after all.

Those with the biggest paycheques should come as no surprise: engineers, nurses and computer whizzes start at $50,000 to $60,000 a year straight out of university, and engineers can hit $99,000 within eight years.

Yet even the humble humanities major pulls in a respectable $57,000 after eight years, according to tax returns crunched by researchers at the University of Ottawa.

Trends were similar across community colleges, where engineering and health graduates started off making about $40,000 a year and rose as high as $72,000 for engineer grads after eight years.

The study, called Barista or Better? New Evidence on the Earnings of Post-Secondary Education Graduates, tracked the annual income of more than 340,000 graduates from 14 colleges and universities across four provinces from 2005 to 2013.

While fine arts grads did earn the least (“Starving artists do exist!” quipped lead author Ross Finnie), their credentials still lift them above the pay grade of the barista at your local coffee shop.

“I’m a strong advocate that money isn’t everything, but these results show graduates are getting jobs and moving up, and that is not the word on the street,” said Finnie, an associate professor with the University of Ottawa’s Graduate School of Public and International Affairs. He is director of the Education Policy Research Initiative, which conducted the study in partnership with Statistics Canada.

“The growth in earnings over time is especially striking,” said Finnie, whose study tracked income over eight years, not just the first year after graduation, as is more common.

But the research also revealed a gender gap in earnings, with female university grads lagging behind their former male peers by some 44 per cent after eight years. Among community college grads, women were making less than half of men eight years after graduation.

While women may be more likely to work part-time to raise children, or choose fields that are less lucrative than predominantly male occupations such as engineering, the report suggested future study to try to get a clearer explanation.

Josh Standing is a university and college grad who says his education has enabled him to chase his foodie dreams. Just five years after completing a two-year chef college program following a bachelor of commerce degree in hotel and food administration from the University of Guelph, the 30-year-old is a senior manager with the trendy Playa Cabana restaurant chain in Toronto, earning well above the average income of $60,000 the report cites for business grads five years after graduation.

As director of kitchen operations, Standing oversees a team of managers across six restaurants, lines up suppliers, advises on new recipes, helps train chefs and still pitches in when needed on the prep line, or bussing tables in a crunch.

“I’ve always liked to cook and wanted to work in restaurants, but I could never be doing this job without a university and college background,” he said. “University gave me a good foundation in how restaurants work on a business level, and the Stratford Chefs School gave me the on-the-job training in ingredients and cooking.”

Among other facts from the report:

  • University grads with a BA saw their salaries grow by about $4,200 per year;
  • Each new wave of graduates earned about $2,400 more than the grads the year before;
  • The exception was 2009 grads, the year after the 2008 financial crisis, whose first-year earning was about $3,400 less than that of the year before, a drop of 7.7 per cent. But by 2011 grads’ earnings had bounced back to pre-2008 levels;
  • While university health grads earn more than others in their first year, their wages climbed relatively slowly, whereas engineering salaries rose steeply — about $6,200 a year — as they soon outpaced health wages.
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