There seems to be an ever louder chorus of politicians and the press questioning the value of a four year degree. The basic case is that the supply of college graduates exceeds the demand for college graduates.
The American economy is not creating enough jobs. So there isn’t enough demand from employers for workers at all skill levels. But in that environment those with a four year degree or more are doing best. Its not even close. And all the evidence is once the American economy starts to grow strongly again the demand for college graduates will be greater than for those with less education attainment. Add to that the growing wage differential and getting a four year degree or more continues to be the best path to the middle class for Americans.
The Bureau of Labor Statistics in their report on monthly household employment include data on employment by education attainment in December 20011 compared to December 2012. Here is what they report:
- Less than a high school degree: employment fell by 258,000 and the employment rate (those 25 years and over working) was 40%
- High school graduate, no college: employment grew by 45,000 and the employment rate was 55%
- Some college or associates degree: employment grew by 558,000 and the employment rate was 64%
- Bachelors degree and higher: employment grew by 1,664,000 and the employment rate was 73%
A little more than two million more American were working in December 2012 than December 2011. 83% of them had a four year degree or more.
The Pew Charitable Trusts just released a report that covers the same topic, but for 21-24 year olds only. And for a longer period of time: comparing from just before the Great Recession to in the current recovery. Young adults are a group that is paying a big price for an American economy that is not creating enough jobs. But even for that group the more education attainment leads to higher employment and higher wages. (The full report can be found here. Worth reading. The New York Times did a summary article on the report. It can be found here.)
Pew found:
- The employment rate for high school graduates fell from 55% before the Great Recession to 47% in the current recovery.
- The employment rate for those with an associates degree fell from 64% before the Great Recession to 57% in the current recovery.
- The employment rate for those with a bachelors degree fell from 69% before the Great Recession to 65% in the current recovery.
In terms of wages:
- The average weekly wage for high school graduates fell from before the Great Recession to the current recovery by 10% to $394
- The average weekly wage for those with an associates degree fell from before the Great Recession to the current recovery by 12% to $452
- The average weekly wage for those with a bachelors degree fell from before the Great Recession to the current recovery by 5% to $645
The report authors conclude: “The data here are at odds with media accounts suggesting that young college graduates are finding it much more difficult to get jobs, are accepting much less desirable positions and lower wages when they can get jobs, and are increasingly “camping out” at home and in schools when they cannot get jobs. When the comparative lens is applied, it is evident that recent college graduates were well-protected against the worst effects of the recession.”
