We’ve all heard about the statistics that show that people with college degrees earn more than people who only have a high school education or who dropped out of high school without receiving their diploma. But, does having a framed piece of paper on your wall necessarily mean you are destined for a bigger payday? Why don’t we take a closer look at what exactly these oft-quoted stats reveal?
Income rises and unemployment falls
First, information from the U.S. Bureau of Labor Statistics clearly shows that median income does indeed rise in accordance with education level.
More specifically, in 2010, the median weekly earnings for someone without a high school degree were $444, while that of someone with a high school degree was higher by 41%. Someone who attended college but did not receive a degree brought in 60% more than high school dropouts, while people with associate degrees, bachelor’s degrees and master’s degrees made 73%, 133% and 186% more per week, respectively, than people who did not finish high school.
Ok, but is the correlation between education and income as simple as the more educated you are, the more you get paid to do your job?
Shrinking job base for the high school educated?
Not quite. While it’s certainly true that some of the highest paying jobs (doctors, lawyers, etc.) require advanced degrees, data from the 2000 Census also revealed that another significant downward pressure on the salaries of people without college degrees is the sheer amount of competition for each available job. As of 2000, high school dropouts and people with high school diplomas collectively represented 63.6 million Americans and held 29.6 million year round full-time jobs. Compare this to the 40.7 million Americans who had either a bachelor’s or master’s degrees and held 26.2 million year round full-time jobs.
Further evidence of this is the fact that unemployment rates go up as education levels decline. According to the U.S. Bureau of Labor statistics, the unemployment rate for people without high school degrees was 14.9% in 2010, while only 4.0% of people who got their master’s were out of work.
College or bust?
So, to return to our original question, does all this mean that you’re destined to get paid when armed with a college diploma?
Of course not. First of all, median figures do not present a complete picture. Obviously, you can be successful if you have a marketable skill that sets you apart from the masses, no matter what level of formal education you ultimately attain. Bill Gates doesn’t have a college degree. Neither does Mark Zuckerberg. And I’ll bet that a sizeable portion of your local unemployment line is occupied by “bachelor’s,” and I’m not talking single men.
In addition, there’s something to be said for enjoying what you do. The idea that you need to have a college degree to get a job has helped to create an atmosphere of apathy towards education, where college is seen only as a business investment and degree mills proliferate to make sure that everyone can get a degree, regardless of their level of interest or dedication. The importance of education is therefore undermined. Rather than people going to college because they have a serious desire to better themselves, we now have people going to college because it is required of them if they want a job. And, the less you care about your studying, the less likely you are to get good grades, stand out in your field and get a job, nevermind a high paying one.
Finally, not all college degrees are created equal. Lost within the figures touched on above is the definite difference between how much a Harvard grad makes and how much a Phoenix, from the widely known online university of the same name, will pull in.
Attending college is not a magic event that will automatically result in higher lifetime earnings. Rather, education and income are merely highly correlated because high paying jobs tend to require higher levels of education. The bottom line is that if you know that what you want to do necessitates attending college, you should do so, and if you are interested in doing something not of an academic nature, you should spend your money perfecting your craft. Ultimately, your goal should be to do something that you love and develop a skill, academic or otherwise, that sets you apart from the masses. School for school’s sake won’t automatically result in higher lifetime earnings.