Get an education they said, you’ll make more money they said, and although that’s not untrue as a college graduate has the potential to make 1 million dollars more over their lifetime compared to someone with just a high school diploma. This discussion is based more on economics than educational statistics. Let’s take a look how and if education can solve income inequality.
Like I said in the introduction, over a lifetime a person with a college degree can make a million more dollars than a high school educated individual. Just like anything else in this world, though, there is a caveat. According to the U.S. Bureau of Labor Statistics the job market doesn’t have enough jobs for people with college degrees, and sure someone with a doctoral degree can make a million more than someone with a bachelor’s degree, only 3% of the jobs available can provide this kind of income. And much like the unemployed doctor’s out there, jobs for people with bachelor’s degrees only account for about 18% of the job market.
If you look at jobs that employee people with a high school diploma or lower, they make up 66% of the jobs on the market (39% and 27% respectively). So, what is the effect you ask…;you might want to sit down for this one. Data from the U.S. Census Bureau shows that 44% of bachelor degree holders under 25 years old were underemployed in 2015. Adding a master’s degree doesn’t it make it better because fifty freaking nine percent (numerically that’s 5freakin!9%) of master degree holders are underemployed. You also have the fact that the average post-graduate degree holder incurs about $43.500 worth of debt compared to the $26.000 of debt the average four-year degree holder incurs.
So, if you haven’t picked up on the pattern established in the first part of this article, underemployed Ph.D. or Masters Degree graduates will be compensated roughly the same as a someone who only attained a bachelor’s degree and underemployed bachelor’s graduates will earn roughly the same as someone with a high school diploma or lower. So the financial benefits and potential earning power of a degree is negated when the person with the degree is underemployed. Also, if you are one of the 66% of public school graduates you now also have to pay back your average $29.400 loan.
Opportunity cost is a term used in economics to describe what it costs you to do one profession or professional enrichment instead of doing something else. So if you are studying Archeology and Medieval Sewage Systems instead of working you are not only paying out the wazoo for books, tuition and housing, you’re also missing out on about $9.000-15.500 worth of income by not working. If we do some simple math and take into consideration that 60% of students take more than six years to graduate, then that amount (the average $12250) adds up to roughly $75000. And let’s not forget that even jobs that don’t require diplomas usually reward experience so you’re also missing out on that.
Ultimately, as tested by Laurence Kotlikoff Professor of Economics at the University of Boston, someone that went into a trade (such as plumbing, construction or facility maintenance) has the same buying power as a person with a bachelor’s degree and, even more, buying power than someone with a master’s or a PHD (from a prestigious private school at that).
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