William Simpson
College was once widely seen as a path to success, but today only about 1 in 4 Americans say a bachelor’s degree is necessary to secure a high-paying job, according to a new study. survey from the Pew Research Center.
Fifteen years ago, about 3 out of every 4 people counted Pew that a college degree was extremely or very important for getting ahead in life. The move comes at a time when higher education costs continue to rise, with some universities now charging close to $100,000 per year for monthly fees and other costs.
At the same time, job opportunities and earnings for young people without college degrees have improved over the past decade, reversing some of the economic damage that eroded the group’s fortunes starting in the 1970s.
“Things are looking up for less-educated young people,” Richard Fry, senior economist at Pew, told CBS MoneyWatch. Americans’ changing views about college could be based “not only on improving job markets and outcomes for less-educated young people, but it is also clear that there is concern about college borrowing.”
Young people with only a high school education have seen a slight rebound in their income since 2014, Pew found. The median annual income for men ages 25 to 34 without a college degree was $45,000 in 2023, a 15% increase from $39,300 in 2014 when adjusted for inflation, according to analysis of Census data from Pew.
Difference between generations
But while less-educated young men are doing somewhat better than they did a decade ago, they have not yet reached the earnings of older generations of men the same age in the 1970s. In 1973, young men without a college degree earned nearly 58 thousand dollars a year. This means that the typical income for this group remains 22% lower than it was half a century ago, according to Pew.
“If you were a young man with a high school education in the early 1970s, you were more likely to be a member of a union, employment in manufacturing was much higher. So, in short, from the 1980s onwards things changed in terms of opportunities. for young people with less education”, noted Fry.
“In the grand scheme of things, young, less educated men are not where they were 50 years ago,” he added.
Young women without college degrees fared better in some respects than young men, in part due to expanded employment opportunities. His earnings have increased from about $35,000 annually in 1973 to $36,000 today. But young women with college degrees still earn much more, about $65,000 a year, Pew found.
More Income and Wealth for College Graduates
When asking whether a college degree is important for securing a “high-paying” job today, Pew did not define the term, leaving it open to a person’s interpretation, Fry said.
But the data from Pew’s analysis clearly shows that today’s typical college graduate not only earns much more than their high school-educated counterparts, they are also capable of accumulating much greater wealth. In other words, a college degree opens the door to a lifetime of higher income, which in turn helps unlock ways to build wealth, such as jobs with 401(k) plans and stock plans.
That’s not to say that young workers without a college degree can’t also earn higher incomes or accumulate wealth. For example, people who work in jobs like plumbing or welding generally earn higher incomes. The average annual salary for plumbers is $61,550 – significantly higher than the typical annual income of $45,000 for high school graduates. according to to the Bureau of Labor Statistics.
But this is still far below the average annual income of $77,000 for young men with a college degree and below the average income of $65,000 for young women with a college degree.
Young college graduates also have roughly four times the wealth of their less-educated counterparts, Pew found. People ages 25 to 34 with a bachelor’s degree have a median net worth of about $120,000, versus about $31,000 for those with just a high school education.
“Higher education creates greater wealth,” Fry said. “Wealth tends to come from two places: the value of the home and the value of stocks or retirement assets. Households with college-educated heads have a higher homeownership rate. And college-educated adults have higher likely to have access to 401(k)s and 403(b)s”, referring to employer-sponsored retirement programs.
Is college worth paying for?
Half of Pew Americans said college is only worth the money if you don’t have to go into debt, Pew found. Only 22% consider the investment to be worth it if you need to take out a loan to obtain your degree.
“I’m a little surprised at how low it is,” Fry said of the 22% turnout, “but it suggests that how you pay for college is also a cause for concern.”
This comes as Americans accumulate US$1.7 trillion in student debt, a burden that has made it harder for some to buy homes or achieve other features of middle-class life.
Among those most skeptical about the value of college are Republicans, with the survey finding that nearly 6 in 10 Republican-leaning respondents said it is less important to have a college degree today than it was 20 years ago. About 4 in 10 Democrats agreed with that proposal.
Such views could be a warning sign for the higher education sector, especially as the percentage of young males with secondary education enrolled in higher education has declined. And some colleges have closed in recent years due to low enrollment and other financial challenges.
“College administrations, boards and presidents should be concerned about these perceptions of the value of college,” Fry said.
