By Ellen Ruppel Shell, The New York Times, May 16, 2018
Last year, New York became the first state to offer all but its wealthiest residents tuition-free access to its public community colleges and four-year institutions. Though this Excelsior Scholarship didn’t make college completely free, it highlights the power of the pro-college movement in the United States.
Recent decades have brought agreement that higher education is, if not a cure, then at least a protection against underemployment and the inequality it engenders. In 2012, President Barack Obama called a college degree an “economic imperative that every family in America has to be able to afford.”
Americans strove to rise to that challenge: A third of them ages 25 to 29 now hold at least a bachelor’s degree, and many paid heavily for the privilege. By last summer, Americans owed more than $1.3 trillion in student loans, more than two and a half times what they owed a decade earlier.
Young people and their families go into debt because they believe that college will help them in the job market. And on average it does. But this raises a question: Does higher education itself offer that benefit, or are the people who earn bachelor’s degrees already positioned to get higher-paying jobs?
If future income was determined mainly by how much education people received, then you would assume that some higher education would be better than none. But this is often not the case.
People who have dropped out of college — about 40 percent of all who attend — earn only a bit more than do people with only a high school education: $38,376 a year versus $35,256. For many, that advantage is barely enough to cover their student loan debt.
And not all have even that advantage: African-American college dropouts on average earn less than do white Americans with only a high school degree. Meanwhile, low-income students of all races are far more likely to drop out of college than are wealthier students. Even with scholarships or free tuition, these students struggle with hefty fees and living costs, and they pay the opportunity cost of taking courses rather than getting a job.
The value of a college degree also varies depending on the institution bestowing it. The tiny minority of students who attend elite colleges do far better on average than those who attend nonselective ones. Disturbingly, black and Hispanic students are significantly less likely than are white and Asian students to attend elite colleges, even when family income is controlled for. That is, students from wealthy black and Hispanic families have a lower chance of attending an elite college than do students from middle-class white families.
It’s a cruel irony that a college degree is worth less to people who most need a boost: those born poor. This revelation was made by the economists Tim Bartik and Brad Hershbein. Using a body of data, the Panel Study of Income Dynamics, which includes 50 years of interviews with 18,000 Americans, they were able to follow the lives of children born into poor, middle-class and wealthy families.
They found that for Americans born into middle-class families, a college degree does appear to be a wise investment. Those in this group who received one earned 162 percent more over their careers than those who didn’t.
But for those born into poverty, the results were far less impressive. College graduates born poor earned on average only slightly more than did high school graduates born middle class. And over time, even this small “degree bonus” ebbed away, at least for men: By middle age, male college graduates raised in poverty were earning less than nondegree holders born into the middle class. The scholars conclude, “Individuals from poorer backgrounds may be encountering a glass ceiling that even a bachelor’s degree does not break.”
The authors don’t speculate as to why this is the case, but it seems that students from poor backgrounds have less access to very high-income jobs in technology, finance and other fields. Class and race surely play a role.
We appear to be approaching a time when, even for middle-class students, the economic benefit of a college degree will begin to dim. Since 2000, the growth in the wage gap between high school and college graduates has slowed to a halt; 25 percent of college graduates now earn no more than does the average high school graduate.
Part of the reason is oversupply. Technology increased the demand for educated workers, but that demand has been consistently outpaced by the number of people — urged on by everyone from teachers to presidents — prepared to meet it.
No other nation punishes the “uneducated” as harshly as the United States. Nearly 30 percent of Americans without a high school diploma live in poverty, compared to 5 percent with a college degree, and we infer that this comes from a lack of education. But in 28 other wealthy developed countries, a lack of a high school diploma increases the probability of poverty by less than 5 percent. In these nations, a dearth of education does not predestine citizens for poverty.
It shouldn’t here, either: According to the Bureau of Labor Statistics, fewer than 20 percent of American jobs actually require a bachelor’s degree. By 2026, the bureau estimates that this proportion will rise, but only to 25 percent.
Why do employers demand a degree for jobs that don’t require them? Because they can.
What all this suggests is that the college-degree premium may really be a no-college-degree penalty. It’s not necessarily college that gives people the leverage to build a better working life, it’s that not having a degree decreases whatever leverage they might otherwise have.
This distinction is more than semantic. It is key to understanding the growing chasm between educational attainment and life prospects. For most of us, it’s not our education that determines our employment trajectory but rather where that education positions us in relation to others.
None of this is to suggest that higher education is not desirable: I’ve encouraged my own children to take that path. But while we celebrate the most recent crop of college graduates, we should also acknowledge the many more Americans who will never don a cap and gown. They, too, deserve the chance to prove themselves worthy of good work, and a good life.
Ellen Ruppel Shell, a professor of journalism at Boston University, is the author of the forthcoming “The Job: Work and Its Future in a Time of Radical Change.”
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