Half A Million Good Reasons To Go To College
Several million young Americans will leave college with diplomas in hand during this graduation season, and many of them must be asking themselves: "Was it worth it?"
In sheer dollar terms, the answer is an unequivocal "yes."
That has been an acknowledged fact for a long time. But new research suggests that the gap in earnings between working people with a college degree and those without is steadily growing. Moreover, many factors are coming together to force the gap even wider in the years to come.
First, the outlook for those recent graduates: The latest government statistics available, for 2011, show that young adults with a bachelor's degree could expect to earn a median income of $45,000, while those with an associate's degree earned $37,000. Those with only a high school diploma or its equivalent earned $30,000. A worker without a high school degree could expect to earn just $22,900.
The wage gap persists for a lifetime: According to the Census Bureau, the median income for all Americans who had a college degree was $49,648 in 2011. The median income for those with only a high school degree was $28,659.
One more point of interest: it doesn't help much to attend college but not graduate. Those who did made only a little more than high school graduates, at a median $32,036.
In a new article for Science magazine, M.I.T. economist David H. Autor notes that the gap in wages has more than doubled over the past three decades.
It's not a trend that is likely to be reversed, he argues. We live in a world in which jobs that require physical strength, manual dexterity and sheer stamina have given way to jobs that demand analytical abilities, technical knowledge and communications skills.
In fact, he writes, colleges aren't turning out graduates nearly fast enough to meet the demands of the world we live in. And that means the wage gap continues, and even grows over time.
Autor studied the subject because he realized that this wage gap is of far greater relevance to most of us than the more attention-getting topic of "the one percent" and their enormous share of wealth in the U.S. That is, he writes, what is "most consequential for the 'other 99 percent' of citizens" is "the dramatic growth in the wage premium associated with higher education and cognitive ability."
And here's a calculation that may soothe prospective students facing the stupefying cost of a college education: Autor's research concludes that, based on lifetime earnings potential, the real cost of a college education is negative $500,000.
That is, your investment in a college education gets you a half million dollars more than you paid for it.
That's not an overnight windfall, of course. It's a payout over a lifetime.