Education Is Biggest Determining Factor For Earning Potential

level of higher education determines earningsIt's long been known that more education means more earnings for American workers. But a new report from the federal government shows just how stark the difference is among workers, depending on their level of education.

The survey reveals that, for every educational hurdle they cross, workers' annual earnings increase significantly, with the exception of professional and doctorate degrees.

In a report released this month by the Census Bureau, data show a strong correlation between education and earnings power.

Those holding bachelor's degrees, for example, earned a median $42,783 annually, according to the American Community Survey, which includes data from 2006 to 2008. That's about double the yearly earnings of workers with only a high-school diploma ($21,569).

But workers needn't hold a bachelor's degree to get a leg up. A two-year associate's degree or even just some college courses were instrumental in helping boost workers' wages, according to the report.

Those with "some college" earned about 27 percent more than those with a high-school diploma, while those holding associate's degrees earned about 51 percent more.

The survey data show little difference between the annual earnings of those workers who had little or no education and those who attended some high school but didn't graduate. Both earned about $11,000 a year.

But the data also showed that those with the least education were also much more likely to be unemployed, with 35 percent of high school dropouts reporting that they didn't work. That's only slightly better than the 37 percent of workers, with a grade school education or less, who said that they were unemployed.

By contrast, 22 percent of high school graduates said that they held no job, while 17 percent of those with "some college," 14 percent of workers with associate's degrees and 12 percent of college graduates with four-year degrees, were without work.

The Census Bureau notes that its survey doesn't take into account the kinds of occupations that people worked. But its data collection efforts are moving that way. The agency said that it may be able to examine the earnings power of bachelor degree-holders depending on their field of work, based on information it began gathering in 2009.

The government report also notes that the educational level of Americans has risen steadily during the last 70 years.

In 1940, according to Census Bureau data, 24.5 percent of people aged 25 and over had at least a high school diploma. In 2008, 85 percent of this group had at least a high school diploma, and 28 percent had a bachelor's degree or higher. In addition, 10 percent of people aged 25 and over had advanced degrees.

Beyond education, the data also showed disparities among the sexes and within racial groups. Median annual earnings for working-age men totaled $36,422, while those for women barely topped $20,000. The data noted that there were about 1.1 million more women of working age (25 to 64) than men.

Within racial groups, working-age whites not of Hispanic origin recorded the highest annual mean wages of all Americans, with annual earnings of about $31,500. Those of Asian descent weren't far behind at $30,265.

Other ethnicities, however, earned much less. Working-age Hispanics reported annual median earnings of about $20,000, while blacks earned $21,239 and those claiming "Other" as their racial identity made $21,700 a year.

Age, too, played a part in how much Americans made. The data showed that the youngest workers (25 to 29) made the least, with median annual earnings of nearly $23,000. Wages then rose about 21 percent in the next segment -- those aged 30 to 34 -- and then again by 12 percent for the next group of workers, aged 35 to 39.

By age 40, however, workers' earning power flatlined until age 55, when it fell about 16 percent. By the time workers reached retirement age, wages dropped dramatically. The Census Bureau data showed median earnings of just $9,272 for those 60 to 64.

The Census Bureau cautions that the data shouldn't be viewed an estimate of how much workers can expect to earn during their lifetimes. Still, it said, for the most part education is the biggest determinate of how much someone will earn -- more than age, sex or ethnicity.

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A Part of this article is based somewhat on Information Graph/Chart from a Source:US Census Bureau American Community Survey 2006-2008 It seems to me thats a Bit outdated according to recent statistics do you think ? Its right on the bottom of the chart in the middle of the article ...a lot has changed Its now September of 2011 ,I have Family Members and aquaintences that have more than one Degree in several Fields and are certified for different trades over the years I agree with more than one Person that has written that it will get People a lot of Debt ( and Large amounts of student Loan Debt is supposed to Stimulate or help the Economy ? How is that ?It sounds like a farce to me and a lot of other People that are afraid to say anything ... If you get a Loan to further your Education and you get a Degree and then when your done no one is still hiring !? How is that Person that Just went for the Degree supposed to pay back that loan if no one is Hiring ??) with Student Loans and a Lot of the Corporations ***ARE NOT Hiring** even for People with Degrees and certifications They are laying off thousands of People ..even the ones with the Degrees a lot of people out there are looking for Jobs some are even taking Jobs that are just there for much lower pay and some with no Benefits and these are People with Degrees and more?What is wrong with the Big Picture here !?

September 14 2011 at 10:15 PM Report abuse +2 rate up rate down Reply

college is a sure way to a huge student debt and poor employment choice because you have no experience in the real world. Skilled trades are where the real money is. I am certified in several welding disciplines and although the work is very dangerous, I make more than a physician with specialites. HA!

September 14 2011 at 8:33 PM Report abuse +2 rate up rate down Reply

I can say with confidence that education DOES NOT mean a better job, better wage. Unless you are talking about fields of math or science, some tech jobs. Liberal Arts is a total loss and education is not recognized as being valuable by a large majority of employers. A cultural distancing from education is more the truth, many US employers will NOT pay extra for any education you have. Don't believe these blanket statements saying education determines anything, because everyone knows someone who went to school many years and has never worked in their field.

September 14 2011 at 7:49 PM Report abuse +2 rate up rate down Reply


September 14 2011 at 7:28 PM Report abuse +2 rate up rate down Reply

Having a college degree isn't everything today..Corporations are looking to hire the young while slowly dumping off their former skilled wokers as they approach their mid 40's to early 50's, and you have to guess why that is? This is no joke. My husband has three college degrees and in business and engineering and everywhere he's gone, it's much the same ol story. Sorry Charley, You're over qualified.
So don't believe having a degree is going to be your salvation.

September 14 2011 at 7:12 PM Report abuse rate up rate down Reply

Education is fine, but when we've got these corporations showing up at these colleges hunting for signing up high technology students here from 3rd world countries giving them a head start over our American stuents I find it particularly disgusting. Thus, the corps get a cheap worker for 2-3 years, and in the mean time that worker is being helped along filing papers for obtaining his H1b Visa...And after that he's well on his way to a good ol USA Green card. All BS! America has no shortage of skilled workers, there mostly veging at home after being laid off for years now not finding jobs anywhere.
The big work is over qualified. After that it's age discrimination...and it's just as big.

September 14 2011 at 7:00 PM Report abuse +1 rate up rate down Reply

we cannot just teach our kids about computers they must learn hands on jobs manufacturing
anything industrial computers are fine but it is sad that our kids don't have a clue on how to make
things with thier hands ask them about the internet they know everything but they cannot count money add or subtract and even read. Very sad this world better make changes before it is too late
politions should wake up and the UNITED STATES NEEDS TOO AS WELL

September 14 2011 at 6:54 PM Report abuse rate up rate down Reply

I agree with Erin.. the only people able to get education is people that can afford high tuition cost or have a parent that is wealthy paying of school. Besides students go to college drop out of school with so much debt and credit card bills is not funny... low income people that have a child and decided to skip college because they need money to take care of their child or family are the one suffering the consequences and most of this people are the one on unemployment and unable to find work.. Now the jobs are asking for so many requirements including bachelor degrees etc the low income people are the one getting turn away... The rich and the ones that can afford school are the one's getting the benefits of employment... :(

September 14 2011 at 5:47 PM Report abuse +1 rate up rate down Reply

Talk about a catch 22. Americans are dumber because no one can afford a decent education yet education is the determining factor in getting a better job or career.
Thank the Republicans and their wealthy cronies for this. They don't care about the general population. They just care about their rich cronies.

September 14 2011 at 3:32 PM Report abuse +3 rate up rate down Reply

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