For all of those freshman flooding college campuses this week: Welcome to High School. The Bachelor’s Degree has been the new high school diploma for the past decade.
There’s a frightening new study out from the Economics Policy Institute that shows that wages for people with B.A./B.S. only have a net gain of 1% since 2000. With wages for high school graduates in free fall, that’s only a 3% change with a Bachelor’s degree.
Here’s the gist: if someone is making $8 per hour with a high school diploma (and the data shows that it’s 95% likely that this is true), then when that person gets their Bachelor’s Degree, they will likely make $8.24 per hour. That’s $0.24 per hour to pay back all of those student loans. No wonder student loan debt hit a trillion dollars.
And don’t think that working more hours is going to help. Here’s my computation of recent data from BLS (click for larger image):
There’s not only no relationship with Hours to anything, there’s a somewhat negative relationship between hours and earnings: to the tune of a -58% Pearson correlation (p=.05). That means that if you work more hours, there’s a chance that you’ll get less wages. If you get a raise, then there’s a chance that that your hours will be cut. There’s a chance you could get lucky though (that being the nature of probability statistics). So it’s a crap shoot that hours may or may not help in raising income; even though people will “rent seek” in renting their hours for a constrained wage regardless.
In the retail sector, the largest sector of employment today, there is ZERO correlation between hours and wages. That’s right: BLS data shows ZERO (r=.004) correlation. If you have a retail job, forget renting your time for wages.
Paul Krugman also has this idea that if you eliminated employer health care (which to be fair, he does NOT support) then wages will rise. That’s a pretty rosey economic model, but there’s actually evidence of the contrary happening. Eliminating employer health care would just mean no more employer health care, with no real wage increases.
The EPI study shows that you actually need advanced degrees in order to show any wage increases (click for larger image)
(Source: Economics Policy Institute Data)
Welcome to high school/college…