Do College Graduates Make More Money?

            In today’s world earning a college degree has become an important step of life and has even been incorporated into the “American Dream”. A college degree prepares an individual intellectually and socially in addition to presenting an individual with opportunities to get higher-paying jobs that require skilled professionals.  Studies have confirmed that a higher percentage of college graduates make more money throughout their lifetime when compared to those with only high school education. However, individuals to include Mark Zuckerberg and Steve Jobs have defied the odds and made millions after they threw off the chains of education. The inspirational story of these people leads people to assume that a college education is not necessary, and college is a waste of money and time, in addition, many graduates experience a difficult time when seeking employment that matches their area of specialization. This makes people believe that obtaining a college degree doesn’t necessarily guarantee one a better paying job, however, an extensive body of research has proved that, college graduates earn more than high school diploma holders.

            A recent study conducted by Georgetown University concluded that on average a college graduate earns about $1million more in their lifetime. Also, another study on the same conducted by the Pew Research Center concluded that the median yearly income gap between high school and college graduates is about $17,500 (Pew Research Center, 1). There are many jobs that people cannot do without a degree, this means that there will be a higher demand for people with degrees accompanied by higher wages. According to Pew Research Center (1), college graduate salaries are 70% higher than those of high school graduates. This percentage is even higher for college graduates who graduate from private institutions of higher learning. This gap in salaries has continued to rise over the decades since 1970 (Habley, et al., 69). Research has also indicated that the earning of those with only a high school diploma have remained constant over the years and most especially from 1980 to 2007, contrariwise the salaries of college graduates increased from $43, 700 to over $66,000 during that specific period (Habley, et al., 69).

Not only do college graduates earn more, but they are also more likely to have a decent job. In addition to this, the number of students enrolling in college is increasing and many freshmen are reporting that they are able to make more money and this is as a result of attending college.  However, college graduates earn salaries depending on the field they majored in college (Templin, et al., 30). According to the United States Bureau of Labor and Statistics (BLS), the higher the level of one’s education the higher their weekly earnings. Nevertheless, some occupations that require a degree may pay less than some jobs that only require a high school diploma. There are no measures that can be used to establish whether a job that requires a college graduate will pay a higher salary or not (Templin, et al., 30).  The main determinant of salaries is the field of work instead of the job. For example, a college graduate working in the field of social services is likely to earn less when compared to college graduates working in fields to include, finance.

Finding a job immediately after college might prove to be difficult. Unemployment rates are at 2.1% among college graduates and 4% among high school grads as of 2017 (Ellis, et al., 1). The unemployment rates prove that more college graduates are employed than high school graduates, therefore, college graduates are likely to make more money when compared to high school graduates.

In the United States, more than 60% of the college degrees are awarded by public institutions and a higher percentage of these degrees are guaranteed to have a substantial earning premium.  College graduates were also able to weather the recent great recession better than high school graduates. Poverty incidences are lower among college graduates since most of the available job opportunities require an individual to have at least a post-secondary education (Timiraos et al, n.p). The preference of college graduates over high school graduates means that college graduates have higher chances of making more money without much struggle (Cappelli, 43).

When determining whether a college graduate earns more than high school graduates it is important to consider the rising cost of a college education. According to substantial research, college graduates have been paying more money in college and earning less amounts of money upon graduation, this is an alarming trend that questions whether investment into college education is necessary. By the year 2013, the aggregate amount of student loans in the US was over $1trillion and over 10% of these loan balances were already in default (Zumbrun, n.p).  However, following a close examination of economic returns to college since the mid-1970s the benefits of attending college still outweighs the high amounts of education fees students are paying (Zumbrun, n.p).  The economic returns of college have remained high over the decades despite this rising cost, this is because the salaries of those without a college degree have been falling too.

With each dawn new academic standards are being set, as education standards continue to rise the value of a high school diploma continues to decline. This decline is reshaping the economic landscape (Timiraos et al, n.p). This decline widens the gap between high school graduates and college graduates, thus making the earnings of high school graduates to fall while the earnings of college graduates continue to rise. In 1965 college graduates earned approximately $7,000 more than high school diploma holders, however, this income gap has widened over the decades and today the gap has more than doubled (Timiraos et al, n.p).

According to statistics collected by Georgetown University (Carnevale, et al., 2), After the great recession, the United States economy added over 11 million jobs and 99% of these jobs have been given to individuals with at least a college degree. About 7.5 million jobs were lost during the recession, notably, over 5.5 million jobs lost were held by high school diploma holders. In half a decade high school graduates have only recovered less than 2% of these jobs. Workers that fall under the category have not registered any substantial growth with benefits (Carnevale, et al., 6). Recessions and economic changes affect the jobs of high school diploma holders making them more susceptible to layoffs than college graduates. This serves as an indication that college graduates will continue to earn more than high school graduates since they have reduced chances of losing jobs during economic crises.

The digital information age has brought with it many changes in the workforce. These changes have profoundly impacted the white-collar clerical jobs that are held by high school diploma holders. The introduction of personal computers has reduced the need for hiring typists and personal secretaries that only require a high school degree.  The digital age has also reduced the use of papers in offices, therefore, eliminating the need for hiring a file clerk to organize and manage paper records. Emails have eliminated the use of post office clerks (Carnevale, et al., 23). The innovation of financial software has reduced the need to hire bookkeeping accountants. The need for secretaries too has reduced with the new dawn (Carnevale, et al., 23). Technology innovations have eliminated repetitive tasks that are performed by high school graduates. The labor market is now dominated by complex repetitive jobs that can only be held by workers with post-secondary education. The demand for a skilled labor force with college degrees is an indication that college graduates will always earn more compared to non-college graduates.

Regardless of the industry, a college graduate works in, an occupation has similar requirements. For example, the tasks of an accountant are similar regardless of whether he/she is working in the mining or healthcare industry (Carnevale, et al., 25).  Therefore, the training for this job is the same regardless of the sector, in addition, the pay is similar. This shows that if a job requires a higher degree of skills then the demand for college graduates will be high regardless of the various sectors (Carnevale, et al., 25).  With this demand, college graduates will earn more than high school graduates.  The labor market is increasingly being defined by the demand for highly skilled employees, thus making it hard for the less skilled high school graduates to find their footing in the labor market. 

Industries to include the healthcare sectors have become a strong generator of jobs since the great recession and recovery, the presence of healthcare innovation and an aging population have led to the creation of jobs (Carnevale, et al., 29). By 2030, baby boomers will be approaching the age of 65. This segment needs more medical attention. This sector has been responsible for adding 2 million jobs and due to the complexity of this sector, 99% of the jobs created have been occupied by works with a college degree. Workers with only a high school diploma have been forced to take the less paying jobs to include drivers (Carnevale, et al., 29). This serves as evidence that college graduates will earn substantially higher incomes than high school diploma holders in the healthcare sector.

Inconclusion, today earning a college degree is a step towards achieving the American Dream. A college degree is responsible for preparing an individual before joining the task force. Studies have confirmed that college graduates make more money than non-college graduates, throughout their lives. However, only a few individuals have defied this and made millions despite being college dropouts.  Not only do these graduates make more money they have decent jobs.  Factors to include the rising cost of a college education and the accumulating student debts have raised the question of whether a college education is a worthy investment. The labor market is largely defined by the demand for a skilled labor force, this demand for college graduates is evidence that graduates make more money than non-college graduates since they have higher chances of gaining employment.

 

 

 

 

 

 

 

 

 

 

 

Works Cited

Cappelli, Peter. Will College Pay Off?: A Guide to the Most Important Financial Decision You   Will Ever Make. , 2015. Print.

Carnevale, Anthony., Jayasundera, Tamara., & Gulish, Artem., “America’s Divided Recovery:    College Haves and Have Nots,” 2016.

Ellis, David B, Doug Toft, and Dean Mancina. Becoming a Master Student Concise. Boston,       MA: Wadsworth, Cengage Learning, 2012. Print.

Habley, Wesley R, Jennifer L. Bloom, and Steven B. Robbins. Increasing Persistence: Research- based Strategies for College Student Success. , 2012. Internet resource.

Pew Research Center, The Rising Cost of Not Going to College, 2014. Retrieved from;             https://www.pewsocialtrends.org/2014/02/11/the-rising-cost-of-not-going-to-college/

Templin, Joseph R. R. Financial Mistakes of New College Grads: The Seminar. Ballston Spa,      N.Y: Unique Minds Consulting Group, 2009. Print.

 Timiraos, Nick., Zambrum, Josh. The July Jobs Report in 15 Charts. 2016. Retrieved from;             https://blogs.wsj.com/economics/2016/08/05/the-july-jobs-report-in-15-charts/

Zumbrun, Josh. Income for Recent Graduates the Highest in Over a Decade. 2016. Retrieved             fromhttps://www.wsj.com/articles/ny-fed-report-finds-rising-incomes-falling-         unemployment-for-young-college-graduates-1454079989;