College Students Should Hedge Their Bets Smartly in the Gig Economy

What’s Your Major?

As folks file back into college classrooms, at record paces at many universities this fall, it’s important that everyone has their eyes wide open about the correlation between the college degree and getting a good job post-graduation. All people who have attended college (whether they graduated or not) have been asked a hundred times, if they’ve been asked once, “What’s your major?” This is the proverbial question that everyone asks, at Thanksgiving, when college students come home for the holidays. Of course the reason the question is asked is the family member of friend wants to try and predict the odds that your education will lead to a “good job” (whatever the heck that is). They want to know whether to be ‘concerned’ about your choice or be ‘super-excited’ about your job prospects post-graduation. Usually these questions have good intentions, but choosing a major can be nerve racking and cause stress.

What Do You Want to Do for the Rest of Your Life?

When I was an undergraduate student at Missouri State University in Springfield, Missouri in the mid-1990’s I, too, was asked this question many times by friends and family. For me, when I answered “Sociology and Criminal Justice” I was usually greeted with a “Oh, that sounds interesting”, which of course, is code for “What the heck are you going to do with that degree?” The thinking, in the 1990’s, was that one’s major was directly connected to the job they would do for the duration of their working career. So, therefore, if you had a major/minor in Sociology and Criminal Justice you were likely going to be a probation or parole officer, social worker, or maybe work at a prison. The trend in higher education for decades had been educating people for more ‘specialization’ given their concentrations/degrees. Most people wanted to be able to draw a straight line between a person’s college degree and their career path.

The answer to the, “What’s your major?” question has a much different meaning in 2017. The market has changed in gargantuan ways and college students should pay attention and ‘hedge their bets’ accordingly. It is no longer wise to go to college and get a degree without having thought long and hard about what you want to do with the degree and the likelihood that your studies will lead to a great job. The idea that “if you have a degree you’ll get a good job” is long gone and college students should take heed. I will argue that choosing a major in college is akin to making bets on the roulette wheel in Vegas and there is strategy involved–if you are savvy. To start, there are several questions that students need to ask themselves when they are early in their college experiences.

Pivotal questions that all college students should be asking themselves: 

  • Is there demand in the economy for what I’m learning in college – for what I’m majoring in? Does my major ‘translate’ to wide variety of in-demand jobs?
  • What are the prospects for the next few decades for my choice of study? What are economists forecasting? Are experts saying there is a shortage or surplus of those people with my background, skills, and abilities?
  • Am I wired to be a risk-taker and able to live with the reality that what I studied in college may NOT translate to a ‘good job’? Am I comfortable adapting to constant change?
  • Would I be happier if I chose a ‘safer’ major (and career path) where high demand has been proven and I will have a higher probability of getting a full-time job upon graduation?
  • Have I done research on how much money people in my career choice make? Have I done the math to figure out if this amount of money is enough to live on and be ‘relatively happy’ with?

Know Your Numbers

Get the Odds in Your Favor

When in college and trying to figure out a major/minor and where you envision your career going it’s critical to be informed with up-to-date information on key statistics regarding the job market, student loan debt, and the potential value of your major in the marketplace. For starters, it is critical to have a general understanding of current trends in the economy.

Specifically, it’s most helpful to know what types of jobs are in high demand and if economists are forecasting continued demand in the foreseeable future. A recent article titled, “America’s 10 toughest jobs to fill in 2017” is a great place to start. The list for 2017 includes: data scientist, financial adviser, general and operations manager, home health aide, information security analyst, medical services manager, physical therapist, registered nurse, software engineer, and truck driver. If I were in college today I would be thinking about how my studies in college were going to prepare me for a job that is high demand. This is the type of strategic thinking that can increase your odds of success. The math is easy. Would you rather be competing with 400 people for one open position or 40? The answer is obvious.

On the other hand, it’s also good to know what jobs are incredibly competitive and may lead to frustration post-graduation. Kiplinger put together an interesting list that is worth checking out. They determined this based on starting salarymid-career salary, annual online job postings, and projected 10-year job growth. The “10 Worst College Majors for your Career” included: exercise science, animal science, religion, radio, television and film production, graphic design, anthropology, paralegal studies, art, photography, culinary arts.

I know what you are likely saying at this point, “But Jason, my passion is in graphic design and the arts…I don’t want to study data science”! This is totally fine and I understand the balance between doing what one is passionate about vs. doing what will pay the bills. But, the point is college grads need to have an accurate picture of what they are up against and then decide what matters to them most. From my experience I think the “passionate aspect” is highly over-rated. I’ve found that a job is what you make it and so something that may not immediately strike you as ‘your passion’ can in the long-run be a great fit.

Along with knowing what majors are hot and not, it’s also critical to understand how the gig economy is impacting jobs and work in America. It may be that what you’ve trained for and studied to be is no longer possible as a full-time job with a pension, health insurance, and the rest. This is a reality that should be researched while you are in college.

The New Rules of the Gig Economy

The U.S. and global economy is constantly changing and requiring different skill sets from folks who want to be successful in the workforce. In a nutshell the days of working for the same company for 30+ years and retiring with a generous pension are few and far between. The “new” model is the trend toward the “Gig Economy”. What is the gig economy you ask? One definition: the trend toward project-based, temporary contracts that is permeating many (almost all) professions. The gig model is also known as: sharing economy, the on-demand, peer, or platform economy. Based on ratings-based marketplaces and in-app payment systems.

Rise of the Gig Economy

There are several companies that are good examples of the gig economy including: UberLyftJunoTaskRabbitPostmatesHandyDogvacay, and Airbnb. The trend for workers is they aren’t needed on a full-time 40+ hour/week basis. Rather work is needed on a ‘demand-only’ basis. This is, causing disruption in the work place.

There are many factors that have contributed to this shift, but understanding it could be the key for college students to find happiness in their careers. Estimates are that by 2020 up to 50% of the U.S. workforce could be involved in ‘freelance work’ – yes 50%! There are several pros and cons to the rise of the gig economy of course. For an interesting take on whether the Gig economy is working check out Nathan Heller’s piece in the New YorkerIs the the Gig Economy Working? The pros are that there is flexibility and freedom for workers and for customers they get things done in a quicker (and often cheaper) way. The cons are a lack of stability and being able to accurately predict income. One recent article cited that “85% of side-gig workers make less than $500 a month.” It will be interesting to see if the gig economy results in higher incomes in the next couple of decades as more and more ‘traditional’ businesses embrace the ‘gig way.’ Again, having an accurate picture of the ‘raw numbers’ can be super-helpful.

Before you pick a major in college you should know where there is demand in the job market and be aware of trends in the economy like the rise of the contingent workforce. In other words, you should hedge your bets accordingly. The casino game of roulette provides the perfect analogy.

Roulette Game Explained

The casino game roulette may look complicated and intimidating for those that have never played it. In reality the rules are pretty simple. The game revolves around luck, of course, and the player’s threshold for risk and reward. Roulette is all about odds and hoping that the ball drops on numbers/bets that the player is on.

There are several bets you can make and some have long odds and some are shorter. People place their bets with chips on the board and then the ball is thrown and the wheel is spun. After several times around the wheel the ball lands on a number and if players are playing that number they are paid.

Roulette is Akin to Choosing a Major

Make no mistake, regardless of what Vegas insiders might say, the game is dumb-luck, period. However, it can be a whole lot of fun and is often a social event where people make the same bets and everyone is happy (if they win). The house has the edge, of course, but the player can determine different levels of risk based on their betting style and bank roll.

Here are the basic payouts and the odds from the most to least risky:

  • Playing a number straight up is 35:1 odds – $10 bet earns the player $350 if that number hits
  • Playing 2, 3, or 4 numbers by placing chips on corners or in-between can be 18:112:19:1 – $10 bet earns the player $180, $120, and $90 respectively
  • Playing 0 or 00 is 35:1 odds (like all the other numbers) – But if Green/Zero or Double-zero hits all of the outside bets lose –  of course this is one way the house gets an edge on the player
  • Playing 1st 12, 2nd 12 or 3rd 12 – Player is playing numbers in that section – 2:1 odds – $10 bet earns the player $20 return if number in that area hits
  • Playing the columns – Player is playing all the numbers in that particular column – 2:1 odds – $10 bet earns the player $20 return if number in that column hits
  • Playing Red / Black (there are 18 red and 18 black numbers) – 1:1 odds – $10 bet earns the player $10 if red hits and they played red (vice versa with black)
  • Playing Odd / Even (there are 18 odd and 18 even numbers) – 1:1 odds – $10 bet earns the player $10 if odd number hits and they played odd (vice versa with even)
  • Playing 1-18 / 19-36 (betting that any number between 1-18 or 19-36 to hit) – 1:1 odds – $10 bet earns the player $10 if number between 1- 18 or 19-36 hits and they placed that bet

So, roulette provides players a plethora of betting options and ways to manage their risk and reward with every spin. I’ve played roulette for years and witnessed people win and lose a lot of money on the game. It turns out this is similar to making a decision on your major and career choice. Do you want to try and enter a field with long odds or shorter (more friendly) odds? This is a key questions college students need to ask. Given the shifts in the economy there are careers and college majors that have a much higher (and lower) chance of success for college graduates.

Picking a Major Is Like Playing Roulette – Odds Matter

Picking a major in college and trying to lay out one’s potential career path is very important. Having a firm grasp on the competitiveness and ‘odds’ of being successful is also essential. We should never underestimate the power of ‘expectation setting’ for our careers. If students decide to major in things that have a high probability of leading to jobs in high-demand areas like data science, financial advising, nursing, or physical therapy that is akin to betting Red/Black or betting the 1st 12 on the roulette wheel. This is a safer bet and the odds of being successful are higher than normal. On the contrary, if a student decides to major in anthropology or photography that is similar to playing a few numbers straight up on the roulette wheel and ‘hoping for the best.’ The payoff is great, but the odds of that student “hitting” (or landing a job) are much lower. Odds matter and shouldn’t be overlooked when important decisions about majors and careers are on the line.

Let It Ride?

Before I made a career change to content marketing I applied to several ‘assistant professor in sociology’ jobs in the Seattle/Tacoma area. Having achieved a Ph.d. and taught for 14 years, at several institutions of higher learning, I figured I’d be a good fit for many schools (whether 4-year institutions–public or private or community colleges). From the dozens and dozens of applications I filled out I ended up getting very few interviews and no job offers. One community college HR person told me that there were over 400 applicants for the ‘Assistant Professor of Sociology’ position I applied for. The odds were not in my favor–aka Hunger Games.

These are incredibly difficult odds and something I should have been more aware of when I was an undergraduate (picking a major) and in graduate school too. Clearly, I speak from learning some very hard lessons. I followed my passions and it didn’t work out as planned. The other structural change in academia that I should have seen coming was the shift from 70% of professors being full-time (with benefits and decent wages) and 30% being part-time (with no benefits and low pay) to the reverse in the last ten to fifteen years. Now, only 30% of professors are full-time with benefits and 70% are part-time. This is a shift in the work force that is crucial. I followed my passion and ignored the economic reality that was staring me in the face. Blindly ‘following your passions’ can be a recipe for disappointment.

Don’t get me wrong, following your passions should also factor into these decisions. However, students need to have a firm grasp on the odds-game given their major and career choice. What’s more it may be that students find they are most happy by being involved in the gig economy (for the benefits I’ve outlined in this article). The number of people working ‘side hustles‘ in the U.S. economy is clearly growing and can help bridge the gaps when full-time jobs aren’t as plentiful (or as satisfying) as they used to be. When I was between jobs I had football and basketball officiating to help keep money coming in and keep me busy. Side-hustles truly can be a life-line if things get tight. They might also lead to creative business opportunities that you didn’t know were possible.

In conclusion, the days of picking a major and career-choice based solely on your passions and what you ‘dream about doing’ are long gone for 95% of college graduates. The smarter way to go is to research heavily the job market and figure out how much risk you are willing to live with and calculate the odds that you can achieve the career-path you wish to pursue. And, of course, even if you do everything I’ve said you still may end up doing or being something different than you envisioned, but at least you will do it with your eyes wide open.


Source: College Students Should Hedge their Bets Smartly in the Gig Economy – Crelate

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