I was reading this article on Bill Moyer’s website, which is essentially following up on a Pew Study which indicates in very broad terms that educated people tended to see increases in wages over the past 20 years. Many commenters responded by saying they hadn’t seen those sorts of increases. I too haven’t seen them and it got me thinking about earnings and how we humans study/talk about them.
My parents, probably like many others, emphasized the need for a college degree and even outright told us that college educated people make significantly more money over the course of their lifetime than non-college educated. Where their info came from, I am not really sure, but it seems to have almost burst forth from the collective unconscious of the entire Baby-Boomer generation. The Pew study which seems to support this idea is based on aggregate census data. But, we all know that past trends are not an indicator of future performance. [Apologies for the poor financial joke.] So should today’s parents focus so much on the idea that their children must go to college to be successful?
One of the more interesting points about this data comes at the end of the Pew article:
Between 1991 and 2012, the aggregate household income of college-educated households increased by $2.1 trillion according to the Census data. Over the same period, the share of all households who are college educated increased from 23% to 33%. How much of the $2.1 trillion income gain received by the college educated is due to growth in numbers of educated households versus growth in income per college-educated household? If the fraction of households who are college educated had remained constant at 23%, instead of rising to 33%, the income pie going to the college educated would only have grown by $0.8 trillion. So, over half of the income gain of the college educated is due growth in numbers. But a substantial portion reflects their improving income fortunes.
So this means that the numbers of post-high school educated people are increasing and they are making more collectively (although not as much more as the numbers could lead one to believe). Or more succinctly put – my parents were mostly correct. But this doesn’t necessarily look at the jobs themselves. It would be interesting to see if jobs in the early 1990’s had the same educational requirements as the same jobs in 2012. Has the job market shifted? Or is there just more competition for the same jobs? Or are over-educated people working jobs that a high school grad should be doing?
Also if the increases are located in only certain fields of endeavor, it really puts a damper on the idea that college degree = more $$$. If I have kids, I am pretty sure I would strongly encourage them to do what they are best suited/inclined to do regardless of degrees [which I hope will be an elevator repairman].