Education has long been considered one of the gateways to socioeconomic success in the United States. In today’s labor market, however, education is more essential to lifelong economic success than ever before.
As Alan Krueger, President Obama’s Chairman of the Council of the Economic Advisers, explains, the American economy is experiencing a “skill-biased technology change,” where technology, automation, and globalization are replacing the need for low-skill labor (2012). As demand for low-skill labor declines, individuals without a high school or college degree are having an increasingly difficult time finding gainful employment than their counterparts did in previous decades.
On the other hand, individuals with analytic skills and college degrees have benefited from this skill-biased technology change, as these individuals have the educational training to meet the demands of the changing labor market. The decline in union membership (20 percent in 1982 compared to 12 percent in 2012) has further decreased the availability of livable wages and job security for employees with lower levels of education, as unions have been shown to protect low-skill jobs from unequal shifts in the labor market (Card, as cited in Krueger, 2012). In many cases, less educated workers are forced to work at or near the minimum wage, an hourly rate that has decreased in relative value since the 1980s (Lee, as cited in Krueger, 2012).
The Education Wage Gap
This economic shift is one of the primary reasons the wage gap between high school graduates and college graduates has soared over the past four decades, contributing to an increase in economic inequality in the United States.
- While education had been a predictor of income for several generations, according to The Hamilton Project, over the past 40 years, incomes for college graduates have increased by more than one-third while decreasing for individuals with only a high school degree or less (Greenstone, Harris, Li, Looney, Patashnik, 2012).
- The National Center for Education Statistics (2012) reports that in 2010, the median annual income for a young adult with a bachelor’s degree was $45,000, compared with $37,000 for an associate’s degree, $29,900 for those with a high school diploma, and $21,000 for those without a high school degree or GED.
These statistics suggest that young adults with a college degree earn 50 percent more than individuals with only a high school degree and twice as much as individuals who did not complete high school.
- The Pew Charitable Trust (2012) cites that over 80 percent of those who do not complete high school earn less than $30,000 annually, and nearly half are unemployed compared with only 15 percent of college graduates.
- According to Looney and Greenstone (2011), after adjusting for inflation, the median annual income for a male in 1970 with only a high school degree was close to $50,000, compared with $26,000 in 2012.
This increasing income differential between high school and college degree earners represents a fundamental shift in the educational needs of American citizens. Today, education is not simply a gateway to economic improvement but is one of the key mechanisms for economic survival. While there was a time when an individual with a high school degree could participate and prosper in the middle class, this phenomenon is no longer a reality. Our current economy demands that Americans receive quality basic education to better insure their success in institutions of higher learning.
The Importance of Education for Low-Income Students
Today education represent the primary vehicle for economic mobility. This fact is especially true for low-income students. According to the Pew Charitable Trust’s Economic Mobility Project (2012):
- A four-year college degree programs was the largest source of economic mobility and stability for those living in poverty.
- Only 10 percent of people with a college degree raised in the bottom quintile of family income remained there in adulthood, compared to half of those who did not go to college.
- Having a college degree makes a person three times more likely to rise from the bottom of the economic spectrum all the way to the top.
- While individuals at the bottom quintile of family income are the least likely to surpass their parents’ income or wealth, a college degree earners from the bottom quintile of family income make the largest gains in absolute wealth compared with the income level they were raised in, and 85 percent had greater income than their parents did.
What these figures represent is that successfully completing high school followed by successfully completing college are essential steps for lifting people out of poverty.
Education, Income, and Well-Being
While income and wealth are not the only benefits of education, the realities of living in poverty make the link between education and income hard to ignore. Beyond income, however, higher levels of education have been shown to:
- Increase health and longevity,
- Increase civic participation,
- Decrease crime and incarceration rates (Lochner, 2011).
- Increase in productivity,
- Decrease in reliance on disability and welfare payments,
- Increase marriage rates,
- Decease the likelihood of raising children in poverty (Greenstone, Harris, Li, Looney, Patashnik, 2012).
While many of these factors may be related to income, citizens with higher levels of education have better access to information about health and preventative care, child development, personal finances, risk-behavior and lifestyle choices compared with individuals with less education.
Conclusion and the Role of Social Workers
Education in the 21st century represents a critical avenue for economic mobility, security, and social prosperity. In short, higher education has become the primary gateway to the middle class. However, higher education is still discussed as an “option” in many American schools and the high cost of colleges and universities reinforces old believes that college is a “privileged” experience. Both of these notions are false and the mechanisms supporting them must be reformed. Higher education must be affordable and our high schools must be explicitly designed to prepare and transition student into higher education settings.
The definition of higher education must also be explored. How well do trade schools equip students with marketable skills? Some trade schools are excellent while others simply bring people an inch above the poverty line. As such, some technical education programs should be considered higher education and supported, while others should be improved or phased out.
Social workers can play a pivotal role in helping families and systems adjust to the realities of the skill-biased technology change:
- When we work with families and adolescents, we can empower our clients to make more informed decisions about the future by making them aware of this valuable information.
- We can further transform our direct practice orientation to where higher education is a universal treatment goal and desired outcome for all consumers.
- When working in school settings we can foster a college-bound culture among our students and fellow faculty, and address shortcomings within administrations where failing to continue education remains acceptable.
- In community practice settings we can advocate a “cradle to college” continuum of care and bolster support for community colleges, scholarships, and higher education transition/support programs.
- Politically, we can advocate for continued education reform, an investment in schools serving low-income communities, support legislation aimed at making higher education more affordable and continuing support to effective community-colleges and trade schools.
- Finally, in schools of social work, we must ensure that social work students understand that education is a one of the primary empowerment method for out clients and is one of the most successfully mechanism for overcoming disenfranchisement.
The skill-biased technology change in the American labor market is real and we have yet to fully adjust to it. While raising the minimum wage is an important step towards supporting low-income workers, this effort will not be enough to combat the effects of the changing demand for labor. Higher education must become the norm and it should be accessible to ALL Americans.
Greenstone, M., Harris, M., Li, K., Looney, A., Patashnik, J. (2012). A dozen economic facts about k-12 education. The Hamilton Project, Sept 2012 Policy Memo.
Lochner, L. (2011). The importance of education on crime, health and mortality, and civic engagement. The Vox Organization.
Looney, A., Greenstone, M. (2011). What is happening to America’s less-skilled workers? The importance of education and training in today’s economy. The Hamilton Project
Krueger, A. (2012). The rise and consequences of inequality in the United States. The White House Blogs.
National Center for Education Statistics. (2012). The Condition of Education 2012 (NCES 2012- 045). U.S. Department of Education. Washington, DC.
Pew Charitable Trust. (2012). Perusing the American dream: economic mobility across generations. July 2012 Report. Washington D.C.: Author.