Report: Blacks and Latinos earn less than white counterparts

15th August 2011   ·   0 Comments

WASHINGTON—African-Americans and Latinos earn less than their white counterparts, even if they are highly educated workers, states a new study by Georgetown University. Members of these groups who hold master’s degrees do not earn more during their lifetimes than whites with bachelor’s degrees, according to the report.

At the graduate degree level, however, Asians make more than all other races and ethnicities, including whites.

So does a college degree pays off? In this report, the Georgetown University Center on Education and the Workforce examines just what a college degree is worth — and what else besides a degree might influence an individual’s potential earnings. This report examines lifetime earnings for all education levels and earnings by occupation, age, race/ethnicity and gender. The data are clear: A college degree is key to economic opportunity, conferring substantially higher earnings on those with credentials than those without.

Experts from Georgetown and Lumina Foundation say that postsecondary education has become the new gateway to the middle class and one of the most important economic issues of our time. According to the study, individuals with a bachelor’s degree now make 84 percent more over a lifetime than those with only a high school diploma, up from 75 percent in 1999. Today, bachelor’s degree holders can expect median­lifetime earnings approaching $2.3 million. By comparison, workers with just a high school diploma average roughly $1.3 million, which translates into a little more than $15 per hour.

“On average, people with more education and higher attainment make more than people with less education,” said Anthony P. Carnevale, the Center’s director and co-author of the report. “But, major and occupation matter just as much as degree level. For example, 28 percent of people with an Associate’s degree make at least as much as the average Bachelor’s degree holder — mostly due to occupational choice.”

The release of the report comes as some experts are asking if the rising cost of college has created a higher education bubble. But, in addition to creating opportunities for significantly greater individual earning power, increased college attainment is also quickly becoming one of the key drivers for our nation’s economy.

“The vast majority of new jobs require higher skills and if you don’t have a college degree, your chances of being in the middle class are visibly diminished,” said Jamie P. Merisotis, president and chief executive officer of Lumina.

“There is a high probability that you’ll be poor without some form of postsecondary education and that makes education one of the most critical factors in our nation’s long-term economic growth plans. A dramatic increase in educational attainment must become a top national priority if we intend to build our labor pool and beat out other countries for the jobs of the future.”

In a separate study, the Center at Georgetown estimated that by 2018, 63 percent of U.S. jobs will re­quire some form of postsecondary education or training. Un­for­tu­nately, we are woefully unprepared for this reality as a nation. Today, approximately 41 percent of adults have a college degree in America.

The study also shows that a salary gap exists between women and men with the same college education.

“Women earn less than men, even when they work the same number of hours — a gap that persists across all levels of educational attainment,” states “The College Payoff” report. “…On average, to earn as much as men with a bachelor’s degree, women must obtain a doctoral degree.”

“Women’s earnings gaps have been diminishing over time, but there are still substantial, and are not completely explained by either educational attainment or occupational choices,” says Anthony P. Carnevale, the center’s director and study author.

The report also states that women with bachelor’s degrees earn about as much as men with some college education but no degree.

And while the study shows that college degrees always equals more earning power than high school diplomas, people with the same education can sometimes out-earn those with schooling in less remunerative occupations. Elementary and middle-school teachers with bachelor’s degrees, for example, make $1.8 million in a lifetime, while computer software engineers with bachelor’s degrees make $3.6 million.

Even people with less education can out-earn those with more education, depending on occupation. For example, Psychologists with graduate degrees make $2.2 million over a lifetime, compared with $2.7 million over a lifetime for engineers with some college but no degree.

“The bottom line is that what occupation you work in has as much of an influence on your earnings as your education level, if not more,” Carnevale says. “In many cases, people with lower educational attainment can make more than those with more education.”

The report does state, however, that on average, a high school graduate can expect to earn $1.3 million on average over a lifetime, while a bachelor’s degree-holder earns $2.3 million.

And that gap has widened over the years — people with bachelor’s degrees earned 75 percent more over a lifetime than a high school graduate in 2002 — now they earn 84 percent more.

While the report covers a lot of ground, it makes clear that going to college is still extremely important in the modern work environment.

“Obtaining a postsecondary credential is almost always worth it, as evidenced by higher earnings over a lifetime,” the report concludes.

“A college degree provides greater career mobility opportunities, greater lifetime earning power and a more promising future,” Carnevale says.

“That’s the college payoff.”

This article was originally published in the August 15, 2011 print edition of The Louisiana Weekly newspaper