A report from the U.S. Census Bureau confirms once again that higher degrees really are worth the heavy cost, when it comes to the boost it gives your lifetime earnings. Your level of education has more of an effect on your salary than your race, gender, ethnicity, citizenship, English-speaking ability or location. But race, gender and ethnicity in particular still matter -- a lot.
A fully employed junior high dropout earns close to $40,000 less than someone with a professional degree, as in law or medicine, when those two people are under 30 years old. And as these two individuals age, their salaries diverge increasingly. That junior high dropout will be making the same $20,000 a year or so at 60, while the J.D. will be taking home an annual average of $103,000, in 2008 dollars.
But if these numbers are parsed out by gender, race, and ethnicity, many more gaps appear, according to data collected between 2006 and 2008 by the American Community Survey, a large monthly national poll. And in general, women in even the most economically advantaged race groups, white and Asian, earn less than men in the most economically disadvantaged race and ethnic groups, black and Hispanic.
White males and Asian males with professional degrees have by far the highest earnings, which inch close to $5 million over a lifetime. An Asian woman with a professional degree makes the same over her lifetime, on average, as a white man with the lower earning power of a Ph.D. ($3.7 million).
A black man with a professional degree earns a little more, on average, than a white man with just a master's degree ($3.5 million). A white woman and a Hispanic man with professional degrees earn a little less than him ($3.2 million and $3.1 million, respectively).
Black women and especially Hispanic women fare the worst. A black woman with a professional degree earns the same as a white man with a bachelor's ($2.8 million). A Hispanic woman with a professional degree earns just a little more, on average, than a white male who has a degree from a community college ($2.3 million and $2.1 million, respectively).
In some cases, the race and gender gap only widens -- the more education a person gets. A Hispanic woman with just a high school education, for example, earns 60 percent of what a similarly educated white man would, but a Hispanic woman with a Ph.D. earns just 49 cents for every dollar earned by an identically credentialed white man.
But education remains the most effective way to improve your earning potential in absolute dollars (especially since gender, race and ethnicity aren't so easy to change). Someone with a professional degree will take home $72,000 more a year on average than an otherwise identical person with just an eighth-grade education, which is probably worthwhile, even if the median white man is taking home more.
Don't Miss: Companies Hiring Now
Stories from AARP
- Collecting Social Security Benefits While Working
- 8 Things You Can Learn From Your Intern
- Great Summer Jobs for Retirees