Economic well being by education attainment
The evidence continues to pour in that those with a four-year degree or more have the highest incomes and wages. Not that a four-year degree guarantees you either a job or high wages and income, but that it is for, all but the top entertainers, athletes and entrepreneurs, the most reliable path to the middle class in an increasingly knowledge-based economy.
The American––and even more so the Michigan––economy continues to produce not enough jobs. And even more so not enough good paying jobs. And globalization and technology––as we have explored frequently––continue to make it easier for employers to get work done with fewer and fewer workers. Add to that polices tilting more and more at the national and state level to favoring employers over employees. So all employees, no matter their education attainment, are facing serious headwinds in terms of finding good paying work.
But in that environment, those with a four-year degree are doing best. An analysis from the Federal Reserve Bulletin entitled: Changes in U.S. Family Finances from 2010 to 2013 provides updated data on income by education attainment.
Lets start with the results from the headwinds everyone––except at the top––are facing. The only group to enjoy income gains since 2010 are the top ten percent. Average real household income up ten percent, median income up two percent. Every other group (in both the mean and median) saw a decline in real household income from 2010-2013. The median household income for all households declined by five percent.
When it comes to education attainment the only group to enjoy household income gains are those with a college degree. Median household income and the change corrected for inflation by education attainment from 2010-2013 is:
- College degree: $80,000 up one percent
- Some college: $40,900 down eleven percent
- High school degree: $37,000 down six percent
- No high school diploma: $22,300 down nine percent
For most of us, particularly households in the bottom ninety percent––the main source of income is from our jobs. So what is happening with wages corrected for inflation? Basically the same story. At the median everyone struggling. But those with a four year degree or more doing better.
Don Grimes compiled median wages for 2006 and 2013 in 2013 dollars for the country and Michigan by education attainment. (Using 2006 as the base year allows us to see structural, rather than cyclical, trends.) Here is what he found:
For the U.S.
- All: $35,600 down 4.0 percent
- No high school diploma: $20,100 down 6.5 percent
- High school degree: $27,400 down 9.4 percent
- Associates degree or some college: $32,400 down 12.2 percent
- Bachelors degree: $50,000 down 4.2 percent
- Graduate degree: $65,600 down 5.1 percent
- All: $34,900 down 10.1 percent
- No high school diploma: $20,300 down 10.1 percent
- High school degree: $27,800 down 11.3 percent
- Associates degree or some college: $32,600 down 10.2 percent
- Bachelors degree: $50,000 down 9.4 percent
- Graduate degree: $69,900 down 5.7 percent
Once again, not good news for anyone. We have a huge and growing problem, both at the state and national level, with an economy where the economic gains are increasingly going to companies and the top few percent. But those doing best in this difficult environment are those with the most education attainment.