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What to do and where to live? Intersecting education, earnings, purchasing power, and return on investment: Part I

Few would debate that there will be an abundance of attractive employment opportunities in health-related industries for the foreseeable future. Chmura Economics & Analytics forecasts an average annual employment growth rate of 1.9% through 2026 for the healthcare and social assistance sector, which is more than three times the average annual growth rate of all industries (0.6%) in the nation. The ambulatory healthcare services industry alone is forecast to grow at an annual rate of 3.1%![1]

However, from the perspective of an aspiring healthcare worker, there is plenty to consider (and debate) when evaluating which healthcare careers to embark upon. Aside from the qualitative aspects that draw workers into healthcare fields, there are of course, quantitative aspects to consider. Chief among these might be questions like “how much will I earn?” Or “what will the return on my investment in the required training be?”

Let us imagine that Marty is our career explorer in this case and that Marty wants to examine three different careers in healthcare, each typically requiring a different level of education: diagnostic medical sonographer (associate’s degree); registered nurse (bachelor’s degree); physical therapist (postgraduate degree).[2]

Through basic research,[3] Marty has decided to pursue training in one of three regions: Omaha-Council Bluffs, NE-IA MSA; Pittsburgh, PA MSA; Seattle-Tacoma-Bellevue, WA MSA. Moreover, Marty is committed to remaining in the region to work after completing training.

To help guide this decision, Marty first wants to discover what career earnings in each of these occupations might be and Marty assumes these earnings will be amassed over a span of 40 years. Naturally, Marty reached out to Chmura for this data request and received the worksheet below in response:

Earnings and Growth for Select Healthcare Occupations by Region
Occupation MeanCost of Living (Base US)Adjusted MeanCOLA Real Career EarningsAvg. Annual Growth (10 years)
Omaha-Council Bluffs, NE-IA MSA
Physical Therapists$73,80091.4%$80,744$3,229,7593.1%
Registered Nurses$60,90091.4%$66,630$2,665,2081.5%
Diagnostic Medical Sonographers$64,70091.4%$70,788$2,831,5102.5%
Total - All Occupations$44,80091.4%$49,015$1,960,6130.8%
Pittsburgh, PA MSA
Registered Nurses$63,10095.5%$66,073$2,642,9321.0%
Diagnostic Medical Sonographers$56,30095.5%$58,953$2,358,1151.8%
Total - All Occupations$47,10095.5%$49,319$1,972,7750.1%
Seattle-Tacoma-Bellevue, WA MSA
Registered Nurses$81,600127.8%$63,850$2,553,9911.9%
Diagnostic Medical Sonographers$86,300127.8%$67,527$2,701,0952.8%
Total - All Occupations$56,900127.8%$44,523$1,780,9081.2%
Source: JobsEQ®
Wage data as of 2015; forecast data as of 2016Q1

Marty was immediately reassured that a career in healthcare was a prudent move based upon the mean (average) wages and annual growth forecast for each occupation compared to the average values for all occupations. Next, Marty’s eyes were drawn down the page to the Seattle region because the mean wages were so much higher than Omaha or Pittsburgh (plus, Marty could finally justify rooting for the Seahawks after spending two decades as a closet fan – bonus points to Seattle!). But wait… “what’s this cost of living stuff?” Marty wondered.

So Marty wrote back to Chmura seeking an explanation. And sure enough, Chmura had one: “The Cost of Living Index estimates the relative price levels for consumer goods and services. When applied to wages and salaries, the result is a measure of relative purchasing power.” Based on Chmura’s cost-of-living index, it turned out that adjusted mean wages for physical therapists were highest in the Pittsburgh area and actually lowest in the Seattle region. Head scratch.

And adjusted mean wages for registered nurses and diagnostic medical sonographers were highest in the Omaha region. This was quite the revelation for Marty… what at first seemed like a simple and clear-cut decision was suddenly begging to become more precise and intentional.

Based on cost-of-living-adjusted (COLA) real career earnings, Marty stands to potentially earn the most by moving to the Pittsburgh region and pursuing a career as a physical therapist. But of course, it’s not this simple. What’s it going to cost Marty to earn a postgraduate degree in the Pittsburgh region? And how will this cost measure up against the potential earnings to be reaped over a forty-year career? How does this cost/benefit ratio compare to the ratios of the other careers that Marty is considering? What other factors must be considered?

These questions and more will be addressed over the next few weeks as Marty discovers reliable new approaches to further informing this decision. Stay tuned.

[1] JobsEQ®

[2] JobsEQ®

[3] Namely that Marty has extended family in each of these regions who have basement apartments available and each of these regions has reputable postsecondary institutions that confer the relevant academic credentials.

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