Thursday, January 11, 2007

Guest Post: How Much is Your College Degree Worth?

How Much is Your College Degree Worth
By Christine Silva

Although many Americans work in unskilled labor, the outlook for non-college graduates continues to grow bleak. Now, with the majority of unskilled and mildly skilled labor being outsourced, it is almost impossible to guarantee a stable income without some higher education.

According to the US Census Bureau, a college education almost certainly guarantees a higher income and overall lifetime net worth. American workers with bachelor’s degrees earn almost double those with only a high school diploma. The average college-educated US worker earns $51,206 per year, versus only $27,915 for a high school graduate. Those with college degrees also have higher employment rates than those with less education. Workers with advanced degrees are employed at a rate exceeding 86%. They have better job security, better retirement, and have an easier time finding employment.

Non-high school graduates, on the other hand, have a poor employment outlook. Only 52% of these workers are employed, and they retain an abysmal employment outlook throughout their lifetimes. And, if these workers find employment, their relative earnings never exceeds $25,000 per year. Even more alarming, when these workers become senior citizens, very few of them are working. At age 55, only 38% of high school drop-outs are employed. Contrast this with senior degreed workers, who are employed at a rate of 74%. Educated workers also choose to continue working past retirement age at a higher rate. At age 65, educated workers are employed at a rate of 25-33%, almost double the rate of uneducated workers.

Many of these unskilled workers will have a difficult time supporting themselves in their elder years. With Social Security in danger, the outlook for these employees is grim. In some states, such as Alabama and Louisiana, over half a million senior citizens live below the poverty level. These states also have some of the highest school drop-out rates. In eleven states, one student in every four does not graduate from high school. In Mississippi and Puerto Rico, the dropout rate is even higher, averaging 28%.

There is a clear connection between education and prosperity. An education is excellent insurance against financial hardship, and continuing education, especially in financial and computer literacy, is decidedly beneficial to both younger and older workers. Educated Americans make more money, have more job prospects and more job security than those without a college degree. Even a two-year degree has positive impact on future earnings and employment security. With Americans living longer, it pays to invest in a college degree.

Christine P Silva, BA, CRTP

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