Workers With Lower Education are Getting Paid LessAugust 26, 2011
Your education level has a dramatic impact on the type of job you can take, and how much money you can earn. We highlighted these drastic differences in The Earning Curve: How Education Affects Your Income. That information provides a snapshot of how much a worker might expect to earn now, but another trend emerges when you look at wages over a period of time.
The U.S. Department of Education and the National Center for Education Statistics publishes a report each year called the Digest of Education Statistics. This report includes trends on workers wages compared to their education level, and they adjust the prices based on the current dollar value, as measured by the Consumer Price Index. If you were to compare the value of the US Dollar today to it’s value back in 1990, you’d see a noticeable difference in what consumers could expect out of their wage. That difference, or inflation, is tracked through the Consumer Price Index.
We looked specifically at workers who failed to complete high school, and those who earned at least a Bachelors Degree and the results show a dramatic contrast.
In 2009, the median wage for full-time male workers was $49,990, and $37,260 for females. In 1990 male workers earned just $30,730 per year, and females earned $21,370. That might seem like a huge difference in wages, but if you were to adjust those same prices for inflation you’d see that, in 1990, males earned the current equivalent of $50,450, and females earned $35,080 per year.1
Why is there such a noticeable difference in wages?
There are a number of reasons why the wages of male and female workers are different, such as the types of jobs available, or the number of laborers in the workforce, and wages are consistently trending towards the middle ground. Is it gender discrimination? Probably not.
As you can see, the real wages (adjusted to the 2009 CPI) have stayed fairly constant over the past 20 years, with males earning slightly less today, and females earning slightly more. Despite the consistency of wages across the entire labor force, workers with lower education levels are being paid less, while workers with higher educations are being paid more.
Males who had a Bachelors Degree or higher earned 38.8% more than the median worker in 1990, and 42.9% more in 2009, while workers who hadn’t completed their high school diploma or equivalent earned 31.9% less than the median wage in 1990, and 43.9% less in 2009. The wage gap between those with higher levels of education and those without is growing larger and larger each year.
The same trend is evident for female workers.
While the median wage for all females has risen since 1990, effective wages have actually decreased for most workers with a High School Diploma or lower.
The increase in wage for workers with a Bachelors Degree or higher is also outpacing the increases for workers without a diploma at a drastic rate. In 1990, male workers with a Bachelors Degree earned 104% more, and in 2009 they earned 155% more than those without a diploma.
So What Does This Mean To You…
Failing to complete your education now will cost you increasingly more in the future. If you think that you can earn more now by dropping out of school and working full time, think again.
… And What Can You Do About It?
It’s never too late to finish your high school diploma, in fact, Park City Independent offers an Online High School Program For Adults. Our online high school is fully accredited by the same organizations used by public high schools throughout the nation. We can help you graduate high school and get out there earning what you’re really worth!
1 U.S. Department of Education, National Center for Education Statistics. Digest of Education Statistics, 2010.