Pay gap between college grads and everyone else at a record
WASHINGTON — Americans with no more than a high school diploma 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.
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.
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, economists say, many high school grads would benefit from a 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.
- They are 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.
- 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.
- 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.