23 May 2006

Incomes of Degree Holders May Look Flat, But Hold On

An article in The Wall Street Journal Online makes some interesting points about salaries of college graduates. Two analyses, one from the Economic Policy Institute and one from the White House, show college grads have averaged flat or even negative income growth in recent years. Yet, we all know from nightly newscasts that the economy is expanding.

Before anyone starts questioning the value of a college degree in today's economy, though, let's refresh ourselves with the fact that workers with bachelor's degrees, on average, earn 75 per cent more than non-degree holders. The gap between workers with degrees and those without continues to grow, so there's reason enough for those with bachelor's degrees to appreciate their education. And, as the article notes, if recent history repeats itself, workers with college degrees are likely to enjoy a boost in the future. As case in point, from 1991 to 1996, the incomes of four-year grads barely kept pace with inflation, yet from 1996 to 2001, their incomes increased 15 per cent.

Of those with college degrees, workers skilled in hot fields, such as science and technology, have enjoyed enviable income growth, even during this flat first half of the decade.

College-bound high school students and adults hoping to pursue higher education should be buoyed by this news. The earnings difference between those with degrees and those without continues to be dramatic, and college graduates who have pursued studies in hot fields are likely to enjoy significant long-term benefits.

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