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.
The growing disparity has become a source of frustration for millions of Americans worried that they — and their children — are losing economic ground.
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.
The dominance of college graduates in the economy is, if anything, accelerating. Last year, for the first time, a larger proportion of workers were college grads (36 percent) than high school-only grads (34 percent), Carnevale’s research found. The number of employed college grads has risen 21 percent since the recession began in December 2007, while the number of employed people with only a high school degree has dropped nearly 8 percent.
Behind the trend is a greater demand for educated workers, and the retirement of older Americans, who are more likely to be high schoolonly graduates.
The split is especially stark among white men. For middle-age white men with only high school degrees — the core of President-elect Donald Trump’s support — inflation-adjusted income fell 9 percent from 1996 through 2014, according to Sentier Research, an analytics firm. By contrast, income for white men in the same age bracket who are college graduates jumped 23 percent.
Long after the recession ended, many young college graduates struggled to find well-paying jobs in a slowly recovering economy, and stories about graduates working as coffee shop baristas abounded. But data collected by the New York Federal Reserve suggests that trend has faded as the economy has improved.
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.