Occupational Outlook Handbook--Economists
The Bureau of Labor Statistics publishes information on economics as a career:
|What Is Economics?
Let's start with what economics isn't. Economics isn't a meal ticket to make lots of money in the stock market, although economics helps you understand how stock markets and other markets work. Economics also isn't a business degree, although economics teaches important business skills. Economics, first and foremost, is a social science. As such, economics helps to explain the mysteries of how people and society operate.
Economics is defined as the study of how people choose to use their scarce resources in an attempt to satisfy their unlimited wants. In other words, we have unlimited possibilities in life to do whatever we want, but we are limited by the resources we have to do these things. Think, for example, why you don't own a ferrari or a porsche (if you do, congratulations). You probably can't afford to purchase these expensive automobiles, or even if you can, this is not the best use of your money. You may want a ferrari, and in fact there is no prohibition against your buying a ferrari. But you don't have the resources--namely, money--to buy a ferrari.
Take this one step further. Why don't you go to the movies every night, or go out dancing until 2 AM every evening? You may want to, even prefer to, but you can't because you have homework, or a job, or both. Even if you could financially afford this lifestyle, your time is a scarce resource. You need to spend time studying or working which prevents you from movie watching and dancing.
Economics builds scientific models to explain why people behave the way they do. And economists use these models, in conjunction with their observations of the world, to analyze and explain why things happen the way they do.
Does this sound boring? It shouldn't. Again, economics is about solving problems. Even more, economics is about finding the truth, even if the truth may go counter to what you, and most people, may intuitively believe. As one economist put it, economics is about paradoxes, about providing answers to riddles that are contrary to accepted opinion yet are true. Think about a few such paradoxes:
Supermodels and athletes may be better off bypassing college for professional work than by attending college. Why? The potential income they forego by attending school is greater than the benefit a college degree brings to a supermodel or star athlete. This is not to say that education is bad, or supermodels can't afford college; rather, it simply says that the allocation of time is better spent working than by attending school.
Traffic jams can be prevented. Traffic jams seem to be a necessary evil, right? What if drivers needed to pay a toll, say $1, during busy rush hours. This would certainly prevent some drivers who didn't need to drive from driving during rush hour, and traffic congestion would lessen. In economics, driving is a want and freeways, time, and money are resources. If we could better allocate these resources, then we could lessen traffic.
It's kind of fun, isn't it? This is what economics is all about--finding answers to problems that are not always as they seem to be.
Don't just take our word for it. Check out what your economics department has to say, or visit the economics departments at these schools:
Major in Economics?
Why major in economics? As discussed above, economics teaches valuable skills and problem-solving techniques that will help you solve the mysteries life presents, not to mention be the hit of cocktail parties. But there's another reason. Namely, jobs, and decent-paying ones at that. In addition to academia and government, economists work in all facets of the business world, including manufacturing, mining, banking, insurance, and retailing. Not to mention sports, recreation, entertainment, and technology.
Why do businesses need economists? First, economists are trained to think analytically and critically to solve complex problems. Second, and relatedly, economists is a social science, and as such economists are trained to recognize human behavior in relation to work, production, distribution and consumption, the fundamental operations of most businesses.
The National Association for Business Economics (NABE)
The NABE is a non-profit organization whose goal is to enhance the careers of people applying economics in their work.
European Job Openings for Economists
Jobs Are Available to Economics Majors?
As we discussed above, economists are prized assets in the workforce. Let's examine in more detail the where economists find jobs.
The role of the economist may differ from that of the manager. Economists analyze data and provide information; the manager uses this information to make decisions. The public profile may not be there, but the power of the information is great. This may explain why so many corporate CEOs rose to their positions through the economics division.
Where do business economists tend to spend their time on the job? Take a look at the following table:
Economists in the Government and Academe
Almost all government agencies hire economists, and most high schools and colleges hire economics teachers. Often, an advanced degree, whether a master's or doctoral degree or a teaching certificate, is needed for these jobs, although this isn't always the case.
In the federal government, both Congress and the Executive Branch have economic advisors. For example, the president has the Council of Economic Advisors and Congress has the Congressional Budget Office to supply economic analysis.
As well, most departments have agencies established to perform economic research and analysis. For example, the Labor Department relies on the the Bureau of Labor Statistics to act as the principal fact-finding agency in the broad field of labor economics and statistics. The Commerce Department relies on the Bureau of Economic Analysis to act as the nation's economic accountant, preparing estimates that illuminate key national, international, and regional aspects of the U.S. economy. The Department of Agriculture relies on the Agricultural Research Service and the Environmental Protection Agency relies on the Office of Policy, Planning, and Development. The list goes on.
State and local governments also hire economists to perform similar tasks as their federal counterparts.
Occupational Outlook Handbook--Economists
The Bureau of Labor Statistics publishes information on earnings for economists.
|How Much Do
Economists Get Paid?
Salary shouldn't be the only factor that influences your career choice, but neither should it be ignored. And it's hard to ignore these numbers. According to a 1994 survey, the median starting salary for economists was $31,300 a year. Take a look at the following information, taken from the Bureau of Labor Statistics Occupational Outlook Handbook, for a further breakdown:
According to a 1997 salary survey by the National Association of Colleges and Employers, persons with a bachelor's degree in economics received offers averaging $31,300 a year.
The median base salary of business economists in 1996 was $73,000, according to a survey by the National Association of Business Economists. The median entry-level salary was about $35,000, with most new entrants' possessing a masters degree. Ninety three percent of the respondents held advanced degrees. The highest salaries were reported by those who had a Ph.D., with a median salary of $85,000. Master's degree holders earned a median salary of $65,500, while bachelor's degree holders earned $60,000. The highest paid business economists were in the securities and investment industry, which reported a median income of $100,000, followed by banking and mining at $93,000 and the nondurable manufacturing industry at $87,000. The lowest paid were in government and nonprofit research.
Perhaps more important than starting salary, however, is the fact that economists with an advanced degree appear to have better promotion opportunities. The entrance salary for economists having a bachelor's degree was about $19,500 a year in 1997; however, those with superior academic records could begin at $24,200. Those having a master's degree could qualify for positions at an annual salary of $29,600. Those with a Ph.D. could begin at $35,800, while some individuals with experience and an advanced degree could start at $42,900. Thus, staying in (or returning to) school to get a master's and/or Ph.D. may be a wise move.
Economists' salaries increase with experience. In 1994, the median base salary for economists of all experience levels was $70,000. Additionally, more than half of all economists (58 percent) earned $10,000 in extra compensation (overtime of bonuses) from their jobs and a quarter of all full-time economists earned another $5,000 from "professional secondary income"--usually teaching or consulting.
Visit a few economics departments around the country to get an idea of the course load required for an economics major. (Don't forget to see if your own college has this information on the Web. If not, stop by the department to pick up a printed copy of this information). For a more complete listing, visit Economics Departments, Institutes and Research Centers in the World (EDIRC) at the University of Quebec at Montreal:
Course work Is Involved for an Economics Major and an Economics Minor?
As an economics major, what economics courses will you take? Typically, you will take the following economics course:
To get a better idea what these course are about, browse our catalog, which has a listing of books with descriptions for these courses.
Where to learn more
WebEc Index to Economics Journals
WebEc maintains a links to online journal information.
Recommended Economics Titles
If the study of economics has whetted your appetite, there are plenty of places to go and things to read to learn more. Here are a few of the publications most economists have on their desk or bookshelf (or in their computer).
Wealth of Nations--Perhaps the premier treatise on economics, Adam Smith's classic is actually quite readable and still relevant over 220 years since its first publication.
Principles of Economics--Principles of Economics, by Alfred Marshall, was the first economics textbook ever written, published in 1890.
Sources: A number of South-Western titles contributed to this article and, in particular, Chapter 26, The Economic Degree, from Principles of Economics, William S. Brown, West Publishing, 1995.Copyright © 1998 South-Western College Publishing, All Rights Reserved.