An important factor in determining what type of lifestyle you are going to have is making the right choice for your career. In this discussion I assume that most of you have not yet chosen a career. Some of you are in a business school and know you want to get a degree in business—either a B.A. or an M.B.A. Many of you, however, are simply taking economics in order to satisfy a social sciences requirement.3 A rational career choice requires at a minimum the following:

1. A knowledge of yourself, including your skills, abilities, likes, dislikes, strong points, weak points.
2. A knowledge of available careers, including their education and training requirements, as well as their potential salaries.
3. A strong dose of realism.

Let's take this third point first because it seems so out of place. What I mean by a strong dose of realism is the understanding that for most of us there is no easy way to settle into a career that within a relatively short period of time will yield complete job satisfaction, a pleasant working environment, congenial colleagues, six-weeks’ vacation per year with full pay, a company-provided Mercedes-Benz, a terrific pension, and a salary in six figures. Let's look at the reality of income figures in the United States. In 2000 the median income for a family of four was estimated to be around $46,000. That's gross income. Remember we're taking about a family of four. You may be thinking that that is not even enough money income to live well as a single person. What would you think is a good salary even for the head of a family of four? Okay, so you picked $75,000. Do you know that if you made $75,000 you'd be in the top 10 percent of income earners in the United States? What about $110,000. Then you'd move into the top 4 percent of income earners.

The point I am trying to make is a simple one: you can't really expect to be paid more than your marginal revenue product. What determines your value to any employer? What you can produce and what that product can be sold for. You have relatively little say over what your product can be sold for, but you can determine what you can produce. You determine this by developing your skills and abilities; this is done through training and schooling. What does that mean? Simply that you have to seek training, whether it be in school or on the job, and you can't expect to be rewarded more than you are worth to an employer.

I am not saying that you should "get all the education you can get." I dispelled that notion earlier. But realize that the more you do to make yourself potentially productive to an employer, the higher you can expect your income to be, at least eventually. It's not surprising that general-purpose humanities' degree holders earn less than specifically trained computer scientists, for example, even when both groups have exactly the same number of years of schooling. This does not mean a humanities' education is worthless and that everyone should become computer scientist. Rather, this is the dose of reality that I referred to earlier. If you spend your life doing things that are fun and enjoyable for you, you normally cannot necessarily expect the market to reward you. You'll have to get your reward from the satisfaction you receive from doing something you like—it won't usually come in the form of a higher paycheck.

In the job market, the more desirable the job, the more fun it is to do, the more glamorous it is, the more it involves exotic travel, the more "perks" it seems to have, then the more competition there will be for that job, and therefore the lower the entry-level salary. It's not surprising that people who want to break into the movie business, the video business, the music business, and the art business must expect to earn virtually nothing in the beginning and must expect to work extremely hard. Is this unfair? Economics is silent about the issue of fairness for that involves normative analysis. Positive economic analysis simply provides the dose of reality.

Know Thyself

Career planning involves knowing thyself—obtained through self assessment. That is something you can do in the hands of a competent career guidance counselor. Most colleges and universities offer this service free of charge. If it is not available, somebody, somewhere on your campus will be able to steer you to a guidance counselor who can give you a battery of tests so that you might find out things about yourself that can help you decide what to do.4

Finding Out About Careers

Career information is plentiful. The federal government puts out numerous publications. All are available in the reference section of your library and may be online as well. The most important are the following:

1. Occupational Outlook Handbook (OOH). This is the best source of general information about occupations, about 250 of which are described in detail. These occupations account for about 80 percent of all jobs. Each occupation description tells about the nature of work and the working conditions as well as training, required qualifications, and possibilities for advancement. You can view it at http://www.bls.gov/oco/.
2. Dictionary of Occupational Titles (DOT). In this publication, over 20,000 different kinds of jobs are listed and given a specific number. Perusal of the DOT reveals jobs that most people don't even know exist. You can view it at http://www.occupationalinfo.org/.
3. Guide for Occupational Exploration (GOE). This publication divides careers into groups according to interest. There are twelve groups called interest areas. The GOE gives a definition of each interest area and then explains it in more detail. If you know what your strongest interests are, the GOE can be extremely helpful.

⁴ Permit me another personal footnote here. I took all those tests as a senior in high school and was told that I should become a technician. My counselor warned me against a career that required written English. (Do not believe everything you are told.)
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