Does Education Pay?

Does Education Pay? By Dr, E. B. Brossard, in charge Agricultural Economics and Farm Management, Utah Agricultural College Educational Values Undoubtedly the greatest values of an education are found in the intellectual, social, cultural, and spiritual development which mean so much towards health of body and mind, inter- est in and understanding of the affairs of nature and things about us, and the refined sensitiveness and appreciation of the relationship of man to his fellows and to his God. The development of the intellect in itself is a worthy achievement. To gather, classify, segregate, analyze, and retain information is a valuable accomplishment. To be able to reason logically is a great asset. To do refined thinking requires a well-trained mind. The moral value of an education in self- control cannot be over-estimated. Constructive moral educa- tion was never needed more than at the present time. The stim- ulation of imagination and the proper control over it are goals to be striven for. The vivid picturing of worthy ideals and making them universally attractive would revolutionize the modern world. Man needs spiritual development to clarify his vision and give purpose and zest to his thinking and his work. Without spiritual vision the people perish. Practical Education Aside from these somewhat classical phases of education, and yet so closely connected with them that a sharp distinction cannot be drawn between them, is the practical side of educa- tion. By practical, as used here, is meant that which is usable in our daily lives in helping .us to understand what we read in books, magazines, and newspapers, that enables us to discuss current events intelligently and that guides us in plans for busi- ness or travel, but more especially that which helps us become more efficient eccfiomic units in society or adds to our economic income. Labor Income Since 1914, the writer has been studying the farming busi- ness in Utah and elsewhere, and has gathered some very inter-

1014 IMPROVEMENT ERA esting data on the profits that are made from farming enter- prises. The Labor Income of many Utah farmers has been cal- culated to show what profits they make from their farms. Labor Income is a technical term and needs to be carefully de- fined in order to avoid misunderstanding and erroneous com- parisons with incomes in other occupations. It is found by subtracting from the gross farm receipts the sum of the gross farm expenses and interest on the total capital invested in the farm business. The receipts include all cash receipts for farm products sold or held for sale and labor done for others by the farmer or his hired help or the farm horses or machinery; and any increase in inventory of livestock, machinery, feed and supplies, cash, or land and buildings due to improvements made by the farmer himself. Eggs traded for groceries are counted as cash sales. But the farm-grown products that are used in the farm family are not counted as receipts. The farm expenses include all cash paid out during the year for the running of the farm business as separated from the per- sonal expenses of living and education of the farm family. They include any decrease in inventory and the estimated value of the farm labor supplied by the members of the farm family other than the operator or father. It may be seen that the Labor Income is not the total in- come of a farmer. In addition to his Labor Income the farmer has all the farm products used in the home, the interest on his capital invested, and increase in land value not due to his own efforts. Schooling Adds to Income Investigations made by the writer and others, in 1914 and 1915, among farmers of several counties in Utah, show the value of formal education to them in their business. Tabe 1 shows these results. (See also Fig. 1.) Table 1. Education and Labor Income* of Farmers, Utah, 1914 and 1915: Education Years No. of Records Labor Income Grade School 1914 260 $472 Or Less 1915 194 411 Average 2 Years 454 446 More Than 1914 103 1,040 Grade School 1915 89 1,902 Average 2 Years 192 1,439 *Five per cent was the interest rate used in calculating these labor incomes.

DOES EDUCATION PAY? 1015 zoo 4oo 600 ecc Two. or fcECoeps !j 1 "I LflBOE INCOME no. or BBCOCP3 LABOR INCOME NO. OF EKOMJ LABOR INCOME {NO. OF EECOED5 LABOR. INCOME ("NO. or ttCOEDS IlABOE INCOME |"ko. or «Ecoeoo LlABOC INC -T- Relation of Schooling to Labor Income of Utah Fanners, 1914 and 1915 »280O T < z a* Z e H S H H < 10 U I- Z<0 u hX 52 I8 Education and Labor Income of Farmers, Utah, 1914 and 1915

1016 IMPROVEMENT ERA Of the 454 farmers who are reported to have had a Grade school education or less, 19 had no formal education, 314 had attended the District school, and 121 had completed the Dis- trict School. Of the 192 farmers who are reported to have had more than a Grade school education 130 had attended High school and 62 had more than High school training. The average Labor Income of the 19 who had no formal education was $445, the average of the 314 who had attended the District school was $395, the average of the 121 who had completed the District school was $579, the average of the 130 who had attended High shcool was $805, and the average of the 62 who had more than High school training was $2,770. These figures are significant, but because there are so few records in some of these groups larger groups were made and therefore but two classes are pos- sible— those with Grade school training or less and those with more than Grade school training. The average of the larger groups reflects more truly the actual conditions. The 1914 average Labor Income of the farmers who had but a Grade or Common school education or less was $472 and for those farmers who had attended high school or more it was $1,040. In 1915 the difference in Labor Income was even greater, being $411 for those who had a Grade school educa- tion or less and $1,902 for those having had more schooling than this. The average for the two years shows the Labor In- come of those with only Grade schooling or less to be $446 and for those with more schooling than this to be $1,439, or about three and one-fourth times as much as those with less schooling. The difference in the two-year average annual Labor In- come is $993. That is to say that those farmers who have more than a Common school education make annually a Labor In- come which is $993 greater than the farmers who have not had this much schooling. It is true that there are individual cases among those who have the lesser education who make very large Labor Incomes. It is also true that some farmers who have a High school and some farmers who have a College education make little or nothing as a Labor Income. But when they are considered as groups and the averages of the groups are com- pared, the better educated farmers make the most money. The 1920, U. S. census shows the average mortgage-rate of interest paid by farmers in Utah to be 7.1 per cent. Capitalizing this increased annual Labor Income of $993 at 7.1 per cent shows it to be equal in earning power to a capital of $13,986. The average farm in Utah, according to the Fourteenth U. S. Decennial Census, was valued at $12,130, and this includes all the 197 acres of land with all the farm buildings and improve-

DOES EDUCATION PAY? 1017 inents, all the farm implements and tools, and all the farm live- stock. These figures show that in the long run education above the common schools is of greater value to a prospective Utah farmer than a present or* gift of the average farm in the state of Utah. Putting the problem in another way, one may see that formal education is one way of solving the problem of farm ownership and tenancy, for with the $993 greater income the better educated farmers would be able to buy the average Utah farm valued at $12,130, and pay for it in twelve to thirteen years (12.2 years). Formal education tends to increase efficiency of production and to give to us all the enjoyment of more economic goods which satisfy more of our economic wants for the same or a less proportionate amount of effort, and therefore amply justifies its cost to the state and the nation and should be taken advantage of by every one who desires to be well prepared for life, for education does pay. Logan, Utah