Stagnant Pay for College Grads .... Declining Pay for High School Grads .... Politics Sucks

In terms of its potential for growth, the economy sucks.


That's because politics sucks.


While the politicians debate climate change and income inequality, real inflation adjusted incomes don't rise in the case of college grads and continue to decline in the case of all others.


Does College Pay? tells the story with facts. You know ---facts ---- those things largely missing from the political discussions these days:


"Over time, a large and growing majority of incoming freshmen have ranked making more money as a “very important” reason for going to college . . . .

And in fact college graduates do — and will continue to — make more than high school graduates. The recent average wage for a college educated worker comes to $29.46 an hour, compared to $16.20 for a high school educated worker.

But the key to getting ahead is not simply making more than someone else. The key is rising wages, and by that measure, even college-educated workers have hit a wall.


Here is the situation in two graphs.

The first graph shows the “college premium,” which is basically the percentage difference between the pay of college grads and high school grads. The graph is widely misinterpreted — by students and parents — to mean that wages for college-educated workers go nowhere but up.

I asked the Economic Policy Institute to annotate the graph to show how much of the premium is from real wage gains for college grads, and how much is from wage declines for high school grads. In the 1980s and 1990s, college grads strongly outpaced high school grads. But since then, the better pay performance of college grads is due to high school students losing ground, not to college grads pulling ahead.

This second graph, taken from a recent editorial, shows the prolonged stagnation in pay for college educated employees.

I am not trying to talk anyone out of going to college.

Graduating from college still means better job prospects. And there are ways to try to buck the wage-stagnation trend, like choosing an in-demand major, though — let’s face it — most people are not cut out to be electrical engineers. . . .

What’s missing from the picture is a thriving economy to employ college graduates in jobs that require advanced education. With too few jobs, there is also too little competition for workers to drive wages up in the jobs that do exist."

Summing Up

The economy is slow and unemployment remains unnecessarily high.

Higher government spending, higher taxes and higher public sector employment gains won't change the picture for the better. Only for the worse.

Only private sector investment will make things improve for al Americans in a meaningful and sustainable way.

And as long as things like the Keystone Pipeline decision and taking appropriate actions to reduce government spending (at all levels) aren't taken, both our national economy and our fellow citizens will continue to pay the price in terms of fewer jobs and lower pay.

Facts are stubborn things.

Politics sucks.

Oh, and one more thing.

Happy Mother's Day. Bob.