Pay gap between college grads, everyone else hits record
WASHINGTON >> Americans with no more than a high school degree have fallen so far behind college graduates in their economic lives that the earnings gap between college grads and everyone else has reached its widest point on record.
The growing disparity has become a source of frustration for millions of Americans worried that they — and their children — are losing economic ground.
College graduates, on average, earned 56 percent more than high school grads in 2015, according to data compiled by the Economic Policy Institute. That was up from 51 percent in 1999 and is the largest such gap in EPI’s figures dating to 1973.
Since the Great Recession ended in 2009, college-educated workers have captured most of the new jobs and enjoyed pay gains. Non-college grads, by contrast, have faced dwindling job opportunities and an overall 3 percent decline in income, EPI’s data shows.
“The post-Great Recession economy has divided the country along a fault line demarcated by college education,” Anthony Carnevale, director of Georgetown University’s Center on Education and the Workforce, said in a report last year.
College grads have long enjoyed economic advantages over Americans with less education. But as the disparity widens, it is doing so in ways that go beyond income, from homeownership to marriage to retirement. Education has become a dividing line that affects how Americans vote, the likelihood that they will own a home and their geographic mobility.
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The dominance of college graduates in the economy is, if anything, accelerating. Last year, for the first time, a larger proportion of workers were college grads (36 percent) than high school-only grads (34 percent), Carnevale’s research found. The number of employed college grads has risen 21 percent since the recession began in December 2007, while the number of employed people with only a high school degree has dropped nearly 8 percent.
Behind the trend is a greater demand for educated workers, and the retirement of older Americans, who are more likely to be high school-only graduates.
The split is especially stark among white men. For middle-age white men with only high school degrees — the core of President-elect Donald Trump’s support — inflation-adjusted income fell 9 percent from 1996 through 2014, according to Sentier Research, an analytics firm. By contrast, income for white men in the same age bracket who are college graduates jumped 23 percent.
Long after the recession ended, many young college graduates struggled to find well-paying jobs in a slowly recovering economy, and stories about graduates working as coffee shop baristas abounded. But data collected by the New York Federal Reserve suggests that trend has faded as the economy has improved.
Yet few experts think the solution is simply to send more students to four-year colleges. Many young people either don’t want to spend more years in school or aren’t prepared to do so. Already, four in every 10 college students drop out before graduating — often with debt loads they will struggle to repay without a degree.
Rather, labor economists say, many high school grads would benefit from a more comprehensive approach to obtaining skills, especially involving technology, that are increasingly in demand.
“If the only path you offer them is a traditional college path, they’re not going to be successful,” says Harry Holzer, an economist at Georgetown University.
Helping lift high school graduates’ skill levels is critical, given the many ways they are lagging behind their college-educated peers:
— They’re less likely to have a job. Just two-thirds of high school-only grads ages 25 through 64 were employed in 2015, down sharply from 73 percent in 2007. For college graduates in the same age group, employment dipped only slightly from 84 percent to 83 percent.
— Less likely to be married. In 2008, marriage rates for college-educated 30-year olds surpassed those of high-school-only grads for the first time. And women with college diplomas enjoy an 8-in-10 chance of their first marriage lasting 20 years, according to the Center for Disease Control’s National Center for Health Statistics. That’s double the odds for women with just high school degrees.
— Home ownership. High school-only grads are less likely to own homes: Sixty-four percent are current homeowners, down from 70 percent in 2000. By contrast, three-quarters of bachelor’s degree holders are homeowners, down slightly from 77 percent in 2000, according to real estate data firm Zillow.
— Union membership. A college-educated worker is now more likely to belong to a labor union than a high-school-only worker is, according to Pew Research Center. Unions have played a key role in raising pay for members. Yet just 6 percent of workers with only a high school degree now belong to one. Public employee unions, which often represent teachers and others with college educations, have generally maintained staying power while large industrial unions have deteriorated.
— Retirement savings. College grads are more likely than high school-only graduates to contribute to a 401(k)-style retirement plan , according to research by Christopher Tamborini of the Social Security Administration and Changhwan Kim, a sociology professor at the University of Kansas. College grads contributed 26 percent more even when members of both groups had similar incomes and access to such plans, their research found.
Participation in 401(k)-style plans requires decisions — whether and how much to contribute and how to invest — that can become barriers for the less educated. That contrasts with traditional pensions, which automatically enrolled everyone eligible and provided defined benefits. But traditional pensions have been rapidly phased out.
— Mobility. College graduates are more likely to move to find work than high-school-only workers are, says Enrico Moretti, an economist at the University of California, Berkeley. Companies tend to recruit more broadly for high-skilled jobs than for low-skilled work.
“College graduates are essentially in a nationwide labor market,” Moretti said.
All of this contributed to a sharp political split in the presidential election. College graduates favored Hillary Clinton by 9 percentage points. Non-college grads chose Donald Trump by 8 points, according to exit polls. That was the largest disparity between the two groups on record since 1980, according to the Pew Research Center.
“These are some of the largest (demographic) shifts in recent years,” said Jocelyn Kiley, an associate director at Pew.
The gap is most pronounced among whites: Nearly two-thirds of white non-college grads voted for Trump, compared with just 45 percent of whites with college degrees.
Some of these trends might eventually reverse themselves if more high school grads acquire the skills needed for higher-paying work. Though many middle-income jobs don’t require college, nearly all require some post-high school education or training.
What Holzer calls the “new middle” includes such health care jobs as X-ray technicians and phlebotomists, as well as computer-controlled manufacturing and some office occupations, like paralegals.
A typical X-ray technician, for example, earns nearly $60,000 a year and needs only a two-year degree, according to government data.
And these “new middle” positions are typically the same jobs for which employers have complained that they can’t find enough qualified people to fill. Labor experts say the U.S. educational system is failing to help young people acquire such skills.
If they know where to look, high school graduates can choose from among numerous options for vocational skills training — from two-year programs to online courses to for-profit schools. Yet many aren’t likely to get much help from high school guidance counselors.
Joseph Fuller, a professor at Harvard Business School, says counselors increasingly focus on things like substance abuse, discipline, and standardized testing, rather than on career advice.
Nor do U.S. high schools funnel students into the kind of on-the-job apprenticeships that exist in some countries. Instead, Fuller says, U.S. apprentices are typically older workers upgrading their skills in areas like construction. The average age of an apprentice in Germany is 17, he notes; in the United States, it’s 27.
“We have a very limited vision of how to get people from their graduation in high school onto a path that’s going to lead them to have a successful, independent life,” Fuller said.
Asia Howard, 26, of Jacksonville, Florida, is navigating that path right now. She was stuck in mostly retail and fast-food jobs after graduating high school, unable to get a job in banking, a profession she prized for its steady hours. A friend told her about a nonprofit called Year Up, which teaches such career skills as resume writing, interview techniques and time management.
Year Up participants also typically receive internships, which Howard spent at Everbank. She also took classes to upgrade her computer skills. Early last year, she began a job in mortgage lending at PNC Financial that pays nearly twice what she earned in previous jobs. She saw many people lose homes during the financial crisis. Now, she helps people buy them.
“It gives me a chance to see what that side of life is like,” Howard said. And unlike in her previous jobs, “I can see a lot of room to grow.” She is also studying for an associate’s degree in business administration at Florida State College at Jacksonville.
The driving force for many of these changes was the recession, which reshaped the job market in ways that left far fewer opportunities for workers like Howard. Many routine jobs were replaced by computers or robots or were outsourced overseas.
There are nearly 1.5 million fewer office administrative and clerical jobs now than there were before the recession, according to an analysis by Georgetown’s Center on Education and the Workforce. That narrowed a long-time path to the middle class for high school graduates, particularly women.
Manufacturing employment is also 1.5 million lower than when the recession began in 2007. The construction industry had offered a lifeline to many high-school educated workers, particularly men, during the housing boom in the 2000s. Yet construction now employs 840,000 fewer people than it did nine years ago.
Since the recession, the fastest-growing industry for high school-only grads has been a mostly low-paying sector that includes restaurants, hotels, and amusement parks, according to Georgetown’s analysis.
Those are the types of jobs that Crystal Thompson, 35, of Seattle, has held since she finished high school. She has worked at Domino’s Pizza for seven years.
“The only jobs that are out there are pretty much minimum wage jobs — coffee shops, restaurants, things like that,” she said. “I’m pretty much stuck in fast food for now.”
Her raises have come from minimum wage increases. She went on strike twice during Seattle’s recent “Fight for $15” campaign, which led the City Council to approve a citywide $15 minimum wage.
Thompson, who has three children, wants to return to school to become a translator. She is mostly fluent in Spanish. Yet she has found it hard to do so in part because her work schedule can fluctuate and is typically distributed just a day in advance.
The closest community college lacks the classes in medical and legal translation she needs. Those classes are offered at another community college a half hour away, so she needs to buy a car to attend them.
“It’s definitely one of my goals, to get some kind of career going,” she says. “I want to be a productive member of society.”
AP Writer Collin Binkley contributed to this story from Boston.
60 responses to “Pay gap between college grads, everyone else hits record”
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Anyone 50 and under has heard this their whole life; human capital in the form of a college degree is the great equalizer in our economy. Now you see the data.
Yes, that is why my mom, who did not graduate from high school worked hard to get me to a fine university like the UH. I was hired immediately upon graduation and had several offers. I do work in Waikiki part time for additional money given the horrid cost of living here.
Just imagine those kids with uncolleged parents with no jobs because of American jobs going overseas or borders! Just because your mom had opportunities working jobs doesn’t mean we all have that opportunity. You only think of yourselves and there probably many more unemployed workers wanting that opportunity. TheDonald is bringing to light of all the US jobs leaving our country for Gawd’s sake. Smell the Kona Coffee! I’ve been told by educators that not all students are of college material and I would think that these students could do well in other jobs such as in the labor force of sorts. You Libertards/Democrats believe in the dreams what your parents tell you, the American Dream but not all have the genes or whatever to reach them goals
I was homeless, my Mom and I, for 18 months in freezing North Dakota. Waianae? Rich community compared to what I knew. You don’t know the suffering we experienced. Salvation Army took us in finally and saved us.
Why do you call other Americans libertards?
Sorry, but us libtards are ones with the college degrees. I’m also sorry that your pay probably reflects your opinions.
Thought this was sarcasm at first! Then I realized….
advertiser1, yes you Libtards with worthless college degrees in Libtard Politics and Chicano Studies. What jobs do you do again?
My friend’s kid was working as a security guard at an Alcoa plant in Washington. The kid tried college and dropped out and was going nowhere. Then one day he tells my friend that Alcoa has jobs that pay much more than his $10 per hour but he needs to learn how to operate these milling machines and the place to do it is at a community college. Anyway the kid goes to community college and instead of learning how to operate the mill he learns how to maintain and repair the machines, he goes back to Alcoa and is now making $27 an hour plus full benefits fixing the milling machines. Moral is you do need to improve your skills, to increase your human capital. You do not necessarily have to go to a four year college to do that. My friend’s son was lucky in that he knew the job would be there and it paid a good hourly wage. What caught my ear was that he had to go to community college to learn his craft. These new manufacturing jobs seem to be different, you can’t just walk in off the street and go through some OJT then go to an assembly line. You need real skills and not everyone wants to go through the process of learning them.
I know people who only have a GED, and make a 7 figure income by owning their own business. They work 7 days a week tho. But its more about determination and hard work, than just following the masses into going to college. Look at the data, almost half that enroll drop out anyway, so without aspiration and ambition, school or work, both cannot be achieved. Too busy partying when you’re young? Old? You have nobody to blame.
And then there are those of us with professional degrees, and earn less, six figures. Still good, but not enough to afford a Tesla. Or a big Hawaii home. Many in Hawaii who are doing well, inherited what they have. Self-made does not abound.
This article doesn’t explain the ‘school of life.’ You have to enjoy what you do, and many do not carefully determine how to fulfill their life’s calling. Parents get it wrong. School counselors get it wrong. So how can the kids get it right?
“So if you think going to college is the answer, Mr/Ms counselor, then why are you working as a counselor in a school, instead of a professional career or business person?”
This is what we should all be asking ourselves, and others who are giving us career advice. Even in these SA comments. Don’t listen to us. Its not about money, as it is about serving others, and having pride in your work. Is the sun, and surf, too tempting? Or the cheap price of alcohol in Hawaii? I see a big difference in the work ethic when I travel outside of the 50th state. Many in Hawaii, lack this mindset, as I write this from my travel to the 42nd state. Brrrr.
https://www.youtube.com/watch?v=H91JDqeR_jg
If kids don’t want to go to school it’s their call on what kind of life they want. And don’t give me that we can’t afford it. There are many ways out there to make it happen. I did.
Not all people are of College material as some choose different routes in life. The problem lies with our LAME politicians who have ceded American jobs going overseas or borders.
Pocho,
You are absolutely correct. NAFTA ruined many American manufacturing centers. Our companies can compete if allowed to pollute, abuse and otherwise act like the companies operating in China. However, this is not the way to do things here or in Asia. The playing field should be level.
Come on now with the pollution thinking. There’s more to it than pollution restrictions. We have no control over China’s polluting ways and even they know of their polluting problems. We US consumers are aiding and abetting China’s polluting factories importing/buying cheap Chinese goods and for Gawd’s sake most of their products are cheap for a reason: Junk! Buy American made as they tend to be of better quality. So, up the Chinese import tax so American goods can compete against cheap Chinese goods and you get the better product. Eveyone’s looking for cheap prices and most times you get what you pay fer! You no the saying, you GET what you Pay fer!
But to be fair, NAFTA created millions of jobs in the USA while lifting millions overseas out of poverty. Trump lied about the issue and he never told the full truth.
allie, you might be too young to remember but I once remember WHITE people doing construction and picking fruit in fields. Yes WHITE people and they did a great job while earning a decent living. Today the millions of jobs NAFTA created are all low wage unsustainable income grunt jobs paying so low due to competition from illegals that no one in their right mind wants them.
allie: So, are overseas poverty stricken more important to you than our fellow citizens? Drive anywhere around HNL and see people sleeping on the streets. While stopped at a light on Nimitz today, I unfortunately noticed an elderly woman lift her skirt next to a bus stop an urinate right in front of the people waiting for a bus and all the traffic passing. I’m 70 and never before saw this in all of the mainland travel I’ve completed.
I think that with the exception of certain types of disablities, many more people then we think are in fact college material they just need more suport in getting there. Higher eductiaon is the only way we will survive as a country. Russia for example has the highest rate of college graduates in the world. Just saying…
It’s also true that there are many non-college employees who should be promoted to those jobs that college graduates have. They are very trainable because they are sharp.
Companies do not want to train and educate these employees because they are afraid that they will lose them to a competitor. OTOH when they do promote a non-college graduate, they treat them as 2nd class managers and supervisors with less pay and authority.
Is it any wonder that even their best non-college employees would leave these companies as soon as they are able?
Pocho, Your first sentence, besides being totally grammatically incorrect, is totally illogical and incoherent. Had you gone to high school, you maybe you could have formed better thoughts and sentences.
As long as you are blaming others, you will not achieve. Only you can make it happen. No one else.
it was easy for you. college was actually affordable back in your day. Minimum wage was more than enough to pay for college.
The BLAME rests on Barry’s shoulder! TheDonald is trying to change this trend by keeping jobs in America. It’s not to hard to figure this out but you Liberatards/Democrats are so blinded by your Pied Pipers Tunes of Lies and Deceit!
Nah, let’s raise the minimum wage to $15, then let’s see it go up to $22/hr. I want to see our fast food workers get paid that much because they deserve it. Then because of that, the Unions need the raise too because you know they need their cut too. Yes that’s right, unions like HGEA, UPW, HSTA are going to want raises too. So let’s get ready to pay more taxes as well. Forget the $1 hamburgers from McDonald’s, I want to pay $2. The workers work hard, they deserve it. Our unions also deserve the raise too, they work so hard as well. Let’s get ready to pay more taxes so we can raise the minimum wage.
Why not unionize these entry level jobs while your at it?
Yes, unionize them and pay them all $50/hr and allow them to all participate in Hawaii’s ERS! Stop blocking ERS to only the privileged. All illegal immigrants should be allowed full access and full ERS pension benefits at the retirement age of 55 and free health care for life, it’s the “D” Aloha spirit to grant everyone access to ERS!
If the minimum wage is $15-$22 an hour, a lot of those entry level jobs will disappear, period. And those that remain will be filled by college graduates who can’t get jobs elsewhere. These entry level jobs are not supposed to be for people trying to buy a home or support a family. A high minimum wage sounds good but makes no economic sense.
yeah after all Obama signed NAFTA, oh sorry that was Bush,he is helping to send jobs to Mexico, oh sorry that’s firms like Goldman who is financng a lot of the new factories springing up long the border.
Clinton signed NAFTA, bozo.
True, but it was like a “renewal”
The gap will also increase as Trump shafts the undereducated who supported him. Does he care? No. He’ll blame someone else.
Millions of illegal Mexican no-college workers keep those jobs down. Blacks are damaged more because of low qualification. Funny they voted against Trump who will discourage illegals and job exports .
Don’t forget the countless million of illegitimate anchor babies born to the illegals. They’ll continue to breed and keep driving down wages.
“The growing disparity has become a source of frustration for millions of Americans worried that they — and their children — are losing economic ground.”>>> Yeah, but you kids keep on pumping out those babies. THAT should help your economic standing, right? First no college, then handicap yourselves with 2 or 3 kids you can’t afford. That should work out well. :/
Funny no mention about Student loans.
It was slightly mentioned for those who dropped out and still carry the burden, but not fully touched on was occupational training–trade schools. We need skilled workers–some kids don’t want college, they are bored and working with their hands is what they want. Welders, sheetmetal workers, carpenters, cement, plumbing, electrical, health care — plenty of skills to fit ones interest and abilities. Having said that I think the Air Force is the largest Trade school in the world–after four years you would have to be a skilled; policeman, vehicle driver, auto or airplane mechanic, cook, sheetmetal, etc etc. That and the ability to get to work on time, dress accordingly and basic hygiene. But they do have weight and aptitude standards!!!
Concur with your comments about doing a stint in the military. I was trained in the Army to repair and maintain medical equipment earning an associates degree in the process before leaving the Army after six years. Had I not gone to college, I could have had a very successful career in the medical field as done by many of my peers who left the Army. It’s funny to me that when I talk to young people about spending some time in the military, more times than not, they hem-haw about not being able to subordinate themselves as part of the job. I tell them that to be a success in the military requires three things 1) show up on time, 2) be in the proper uniform, 3) do what you are told to do by your supervisors ( as long as those instructions are legal, moral and ethical)……. funny how those three things equate to success in the civilian sector.
I agree with the idea that all 18 year olds serve the country for a mandatory 2 year stint in exchange for some career educational benefits. My USAF service provided me with the benefits to be the first in my family to finish graduate school and build a highly successful career.
Never too late to go back to college. Skilled hard working applicant vs an unskilled lackey. Which would you hire?
College education means nothing when it comes to success. There are even a few billionaires who are HS and college dropouts.
One of the biggest the things that made me a success was having a high school drop out as a father. He knew that he screwed up and preached the value of a college education as I grew up in the house. He was disappointed when I enlisted in the Army right out of HS thinking that I would never get to college. Of course when I left the Army six years later I enrolled full time and earned an engineering degree and that opened all the doors that allowed me to be finically sound and retired at 50. While college is not for everyone, it is imperative to pick up a skill that is marketable. Enlisting in the Army was by far the best decision I ever made. It allowed me to grow up a little bit and see the world and pay for college. I did not have to take a dime from my parents or take any loans
interesting
All people are not equal when it comes to neurological capacity, or physical prowess, or musical skill, people skills, etc etc. Regrettably there have always been the have-nots that provide the dots at one end of the bell-curve. The job market is competitive … there will be winners and those who will fill in the lower skill/paying positions. Most businesses operate in a supply and demand environment both from an expense and income prospective. So can I hire someone for less? The answer in most for profit businesses is yes. Will it ever be a level playing field? Communism did not work and the free enterprise capitalism system is flawed and may not seem fair to all concerned. Who adjusts the the playing field? Billionaires … of course!!
Same here NorthShoreGuy… join the military shortly after HS and 6 years later Uncle Sugar paid for my all college education. And after 6 years in the real world I was much more mature and appreciated what an education had to offer… There are also lots of trade schools available… not everyone is cut out for college. I know some welders and electricians that make a lot more than many college graduates some 10 years after finishing their schooling.
Interesting how the press cannot let it go and keep publishing things like this:”The split is especially stark among white men. For middle-age white men with only high school degrees — the core of President-elect Donald TRUMP’s support”. and this “The gap is most pronounced among whites: Nearly two-thirds of white non-college grads voted for TRUMP, compared with just 45 percent of whites with college degrees.”
Maybe, but it’s true isn’t it? That’s the base…that’s the group that loved the rhetoric.
Yes but why not show the data of the folks whom voted for Obama back in 2008?
The other thing about a college degree, a lot ok kids have college degrees that are nearly worthless. If you are going to get a degree, get it in a technical field, engineering, medical, or education, forget political science, history and other near useless majors. Also, nothing wrong with becoming a plumber, electrician or carpenter, or mechanic, if you are good, you could make $100k per year and have decent job security, maybe even start you own business and have some control over your future.
Many lawyers have liberal arts undergraduate degrees. I do as well, but also have a professional license…so no the degrees are not useless. They show that individuals have the ability to learn, think, and complete something at higher levels. I’m going to assume you have no degree…
I have an advanced engineering degree and also registered PE, but many of the folks I work with make as much or more than I do and they have no degree, but they are skilled trades people and are in actually very high demand at the moment, more demand than many doctors and lawyers…
I’m not arguing that people can’t make more than folks with a degree (neither is that article because they are talking about averages). What I’m saying is that liberal arts degrees are not useless; I wasn’t clear in my post, I’m not a lawyer but a cpa. So my history degree was all I needed.
To get your CPA in Hawaii you need some technical course work, not just a liberal arts degree: HI requirements:
•Degree with a major in a subject other than accounting, must have 18 semester hours of upper division accounting
•Must meet minimum educational requirements at time of application or expect to meet it within 120 days from the date the NTS is printed
•To be granted certification, minimum of 24 semester hours in upper division accounting courses and 24 semester hours in upper division non-accounting business courses
wave1, great post with meat in it! I think you just caught advertiser1 in a bold lie. hahahaha,
You also say many layers have liberal arts degrees…If these lawyers had an engineering degree or medical degree they would be worth much more. And as you point out, you have a Law degree, that is what makes you employable, not the Liberal Arts degree…
I know many lawyers desperately looking for work and clients! Peddling their services like street hookers and changing law firms almost yearly barely earning above the federal poverty income levels. Not enough contract rubber stamping work and litigation to sustain the mass crowds of law degree holders. Only a few top law school graduates make it and the millions of others are like aspiring actors/actresses in Hollywood thinking they’ll make millions if they only win one big lawsuit on their hands! LOL
You’ve just proven your liberal arts major was useless. You couldn’t get a job if your life depended on it so you had to go into accounting work. LOL Again proving the point that Libtard politics has been a proven failure. Anyone in demand these days better have a STEMS degree or trades.
Whoa! Your ego shines thru! post a side face pic with your nose pointed in the air like Barry! lol
Your arrogance shone thru! You must be doing well Ad1!
It’s pretty obvious that businesses don’t promote from within. The college degree is looked as a good indicator of intelligence and integrity rather than trying to make judgement calls on their non-college employees.
The disparity will have to get larger before business recognize the insanity of their promotion policy.
It is much more cost effective to send an sharp experienced non-college employee to get a college education if they feel that the employee needs a college degree. They can do it part-time on the job.
If the company has been good to its employees and continues to reward good work performance and efforts to improve themselves, then these companies that invest in their employees can expect that they will remain with them after the employee graduates.
(The person quoted in the fourth paragraph, Anthony Carnevale, is really interesting as well as a nice guy. He’s a Hilo boy with a Harvard Ph.D. I met him years ago when he worked for the National Endowment. for the Humanities. He’s tried for a long time to provide opportunities on the national to stage for scholars from Hawaii.)