Conventional wisdom is overwhelmingly that earning a B.A. is now less and less valuable. The reality is the exact opposite: the young adult B.A. advantage is large and growing post pandemic.

The Pew Research Center just released a report titled Is College Worth It? that documents both that conventional wisdom of the lack of value in obtaining a B.A. and the exact opposite reality.

The report has national poll data on how Americans answer that question. And also economic outcome data by education attainment today, a decade ago and fifty years ago for 25-34 year olds. The survey results found big skepticism that college is worth it, particularly if one has to take out a student loan.

The focus of this post is on the reality of economic outcomes. What may be most striking about the economic well being data is how well 25-34 year olds overall are doing today compared to their own perception, the public’s perception, and their peers a decade ago. No matter your education attainment, 25-34 year olds today are doing substantially better than 25-34 year olds a decade ago. The notion that young adults post pandemic are doing far worse than young adults prior to the pandemic is simply inaccurate.

This is particularly true for young adults with a B.A. A completely different reality emerges from the data than conventional wisdom or the messaging that young people are getting from elites about the value of a B.A. The report contains lots of data on labor force participation, full time/year round employment, poverty rates and median household income.  Most broken down for men and women. But to keep this post short here I want to focus on median earnings from work and median net worth. All the data tell the same story, the young adult B.A. advantage is substantial and growing. 

Let’s start with median work earnings for full time/year round workers between the ages of 25 and 34. All figures are in $2022, so they are inflation adjusted.

• Median earnings for males in 2023 is $77,000 for those with a B.A.; $50,000 for those with some college but less than a B.A.; and $45,000 for those with a high school degree. 
• Median earnings for females in 2023  is $65,000 for those with a B.A.; $40,000 for those with some college but less than a B.A.; and $36,000 for those with a high school degree. 

The report also includes data on median net worth of households headed by a 25 to 34 year-old. Net worth means that the data includes subtracting student loans outstanding. Median net worth in 2022 for those with a B.A. was $120,200; for those with some college but less than a B.A. $52,900; and for those with a high school degree $30,700. 

How does this compare to a decade ago?

• Median earnings for males in inflation adjusted dollars is up $9,500 for those with a B.A.; $900 for those with some college but less than a B.A.; and $5,700 for those with a high school degree.
• Median earnings for females in inflation adjusted dollars is up $9,800 for those with a B.A.; $2,300 for those with some college but less than a B.A.; and $5,100 for those with a high school degree.

Median net worth of households headed by a 25 to 34 year-old in inflation adjusted dollars is up for those with a B.A. $73,600; for those with some college but less than a B.A. $37,200 and for those with a high school degree $18,000. Remember that this data includes subtracting student loans outstanding.

So the depth of the misinformation we have been communicating to young people is astonishing. The reality is with or without student loans young adults are far better off economically with a B.A. Student loans are not crushing those with a B.A., rather they lead to higher work earrings and wealth. And no the advantage of having a B.A. has not declined post pandemic. 

Add to that the wage and wealth premium grows substantially after age 34. Not to mention all the other advantages in median household income, time working, regaining a job after losing one, marriage, health, on and on and on. 

The post The young adult B.A. advantage is growing appeared first on Michigan Future Inc..

A new Pew Research Center analysis calculates the proportion of lower income, middle income and upper income households in 1971 and 2021. The headline of the analysis is the shrinking of the American middle class over the last half century. 61 of American households in 1971 were middle income. In 2021 that had declined to 50 percent.

The reason for the decline in middle income households is both a good news and bad news story. The bad news is that the proportion of lower income households grew from 25 to 29 percent. The good news is that the proportion of upper income households grew from 14 to 21 percent.

Pew defines middle income households as those with annual household income that was two-thirds to double the national median income in 2020, after incomes have been adjusted for household size, or about $52,000 to $156,000 annually in 2020 dollars for a household of three. Lower-income households have annual incomes less than $52,000 and upper-income households have incomes greater than $156,000.

The data source is the Current Population Survey’s Annual Social and Economic Supplements. Income is defined as money income received (exclusive of certain money receipts, such as capital gains) before payments for such things as personal income taxes, Social Security, union dues and Medicare deductions. Non-cash transfers, such as food stamps, health benefits, subsidized housing and energy assistance, are not included.

The decline of middle income households accompanied by a rise in both lower income and upper income households has widened greatly the distribution of income between upper income households and everyone else. In 1970 aggregate household income was 10 percent for lower income households, 62 percent for middle income households and 29 percent for upper income households. In 2020 upper income households had 50 percent of aggregate household income, middle income households 42 percent and lower income households eight percent. More evidence of an increasingly two-tier economy.

The two tiers are increasingly defined by college attainment. With the higher-income tier dominated by those with a four-year degree or more and the lower-income tier by those without. As Dr. Carnevale wrote in our last post the most reliable path to the middle class is a B.A. or more.

Pew found that 87 percent of those with a B.A.or more were in middle income or above households. It was 72 percent for those with some college, 61 percent for high school graduates and 43 percent for those with less than a high school degree.

Getting a B.A. is even more important to being an upper income household. Pew found:

In 2021, about four-in-ten adults with at least a bachelor’s degree (39%) were in the upper-income tier, compared with 16% or less among those without a bachelor’s degree. The share of adults in the upper-income tier with at least a bachelor’s degree edged up from 1971 to 2021, while the share without a bachelor’s degree either edged down or held constant.

More specifically the proportion of upper income households with a B.A. or more grew from 36 to 39 percent, while the proportion declined from 21 to 16 percent for those with some college, from 14 to 10 for high school graduates and from 6 to 5 percent for those with less than a high school degree.

Despite constant claims of the widespread availability of six figure jobs in occupations that do not require a four-year degree, the reality is that the most reliable path to annual household income of at least $156,000 is getting a B.A. or more.

The post Upper income households by education attainment appeared first on Michigan Future Inc..

I thought about this exchange as I read Becoming Brilliant: What Science Tells Us About Raising Successful Children, by Roberta Michnick Golinkoff and Kathy Hirsh-Pasek. The book’s central thesis is that most American schools are solely organized around teaching quickly-evolving content, but students who want to build successful 21st century lives and careers also need to gain skills in five other “c” disciplines: critical thinking, creativity, collaboration, communication and confidence.

There was a time when the modern era was known as the Information Age but we now know that information alone is not sufficient to build a strong workforce and economy. 21st century workers need knowledge: The ability to sift through, analyze, improve upon, challenge and find application for information. Golinkoff and Hirsh-Pasek quote psychologist Diane Halpern, who predicted this quandary in an article published in American Psychologist in 1998, near the beginning of the internet boom.

“People now have an incredible wealth of information available, quite literally at their fingertips, via the Internet or other remote services with only a few minutes of search time on the computer. The problem has become knowing what the do with the deluge of data. The information has to be selected, interpreted, digested, evaluated, learned and applied or it is of no more use on a computer screen than it is on a library shelf.”

Given the obvious importance of the ability to interpret, synthesize and build upon information in the modern workforce, it seems unlikely that there would be resistance to efforts to boost students’ critical thinking skills. But not everyone is thrilled about the push for higher order thinking. For example, Golinkoff and Hirsh-Pasek cite the Texas Republican Party, whose 2012 party platform stated their opposition to education that emphasizes critical thinking skills.

“…We oppose the teaching of Higher Order Thinking Skills (HOTS) (values clarification), critical thinking skills and similar programs that are simply a relabeling of Outcome-Based Education (OBE) (mastery learning) which focus on behavior modification and have the purpose of challenging the student’s fixed beliefs and undermining parental authority.”

Imagine where we would be if previously “fixed beliefs” that the world is flat or that the earth is the center of the universe had gone unchallenged!

According to the Pew Research Center for Journalism and Media, a third of 18-29 year old Americans cited social media as the “most helpful type of source” to get information about the 2016 presidential election. As a former newspaper reporter, I am a strong defender of First Amendment protections, even for speech I find ridiculous or odious. But as much as I support Americans’ right to free speech, I believe that our schools should arm students with the intellectual tools to question whether information sources are credible, reliable and accurate.

The post Why critical thinking skills matter for Michigan students appeared first on Michigan Future Inc..

The Atlantic writes:

The past is another country. In 1980, the typical young worker in Detroit or Flint, Michigan, earned more than his counterpart in San Francisco or San Jose. The states with the highest median income were Michigan, Wyoming, and Alaska. Nearly 80 percent of the Boomer generation, which at the time was between 18 and 35, was white, compared to 57 percent today.

Three decades later, in 2013, the picture of young people—yes, Millennials—is a violently shaken kaleidoscope, and not all the pieces are falling into a better place. Michigan’s median income for under-35 workers has fallen by 26 percent, more than any state. In fact, beyond the east coast, earnings for young workers fell in every state but Hawaii and South Dakota.

… The deeper explanation might be structural. Many young adults, particularly those who represent their families’ first college graduates, are earning more than their parents. But young adults without a college degree have been run roughshod by technological changes, globalization, and slow wage growth that continues to this very week. Many of the cities with the largest declines in median income (Flint, Detroit, Cleveland, Youngstown, Toledo) were industrial hubs undone by the demise of manufacturing employment. … Although these figures paint a lugubrious picture of young workers today, it’s nonetheless true that Boston, San Jose, Washington, San Francisco, and New York’s metro areas have all seen double-digit real income growth since 1980. (Emphasis added.)

The varying fortunes of college educated Millennials from those without a four year degree is detailed in the terrific report from the Pew Research Center we have written about previously. Entitled the “The Rising Cost of Not Going to College” the report found:

On the one hand, it is clear that young, college-educated workers are having more difficulty landing work compared with earlier cohorts of young adults. They are more likely to be unemployed, and it takes them longer, on average, to find a job. On the other hand, once they’re employed, their earnings are higher than those received by earlier cohorts of young, college-educated adults. For less-educated young workers, there is no upside: They are more likely to be unemployed and they are spending more time searching for a job compared with less-educated young workers who came before them. And their earnings are significantly below those received by less-educated young workers in earlier generations (with the exception of high school-educated Gen Xers).

Michigan’s 18-35 year olds were doing the best in 1980 because they were participating in the old economy, of which Michigan was at the epicenter, of high paid factory jobs. An economy that paid those without a college education well. Michigan’s 18-35 year olds of today have fallen farther than those in any other state because that economy is gone. Employment growth and high wages are increasingly concentrating in  knowledge-based industries. And the winners of all generations are those with a four-year degree or more.

The post Michigan millennials and economic decline appeared first on Michigan Future Inc..

So much for what now passes as conventional wisdom that we have too many with four year degrees or more.

MLive reports from the MSU survey that: “Hiring of new graduates for almost every degree type will increase. The exception is for new graduates with master’s degrees, which project hiring to stay flat with last year’s numbers. The biggest jump is for those with MBAs, which companies are projected to hire 38 percent more of than last year. The increase for those with bachelor’s degrees is 16 percent over last year. PhD hiring will go up 20 percent and associate’s 19 percent.”

These results are consistent with the findings for 25-32 year olds of the Pew Research Center’s terrific “The Rising Cost of Not Going to College” report we explored in a previous post. As well as all the national data on both employment and income by education attainment. All of which consistently shows that those with a four year degree work more and earn more than those with lower education attainment and that the gap is widening.

Hopefully, the MSU survey results indicates that the economy is starting to generate, on an ongoing basis, lots of high skill jobs. That would be very good news. But what has been true for years is the American economy is not producing enough jobs at all skill levels. That effects those with four year degrees like everyone else. But what has not been true is that those with four year degrees are faring worse than those without. The exact opposite is the case. In a weak recovery those with four year degrees or more are doing best.

The bottom line: a four year degree or more––irrespective of what you major in––is the most reliable path (except for extraordinary athletes, entertainers and entrepreneurs) to a good paying job and career. End of story!

The post In demand: those with four year degrees or more appeared first on Michigan Future Inc..

Jim Jacobs, the terrific President of Macomb Community College, in an email to me and Carol Churchill, President, Mid Michigan Community College, in a comment to my Bridge column both took me to task for writing: So much for,“You would have been better off going to a community college!” (That sentence is in both the commentary and the speech.) In this post I want to deal with the rationale for that sentence.

First my Bridge commentary should have included the background that the column was an abridged version of my Alma commencement address. The comments about making the right choice was directed at those students who had just earned a four year degree. The evidence cited in both the column and speech makes clear that getting a four year degree from a liberal arts college like Alma was a better choice for their career than pursuing a two year degree or occupational certificate that so many of our high school graduates are being steered towards.

Second in the Bridge column I should have written: So much for “You would have been better off going to a community college and getting an associates degree or occupational certificate.” As both Jacobs and Churchill wrote some students do start at a community college and transfer to a four year university where they earn a bachelors degree. I’m sure some of the Alma graduates took that path.

At our high school initiative–Michigan Future Schools––we are working on a partnership with Schoolcraft College, the University of Michigan Dearborn and DEPSA to encourage DEPSA high school graduates who for either academic or financial reasons will not be able to attend a four year institution to enroll at Schoolcraft with the goal of earning the credits and GPA to transfer to UM/Dearborn.

So starting at a community college and transferring to a four year college is clearly one of the paths to earning a four year degree. That said the authors of Crossing the Finish Line––the definitive book on what matters to earning a four year degree––concluded: “… we find that students who began their studies at two-year colleges were much less likely to earn a bachelor’s degree than were similar students who started at four-year institutions. As we shall see, this large effect is observed even for the least well-prepared students, who might be expected to benefit the most from starting at a two-year college.” (Emphasis added.)

The reasons are too complex to detail here. The basic explanation is that students have better outcomes when they enroll in more academically challenging instituitions. Although it seems counter intuitive, students who enroll in colleges for which they are over-matched (they barely qualify for admission) do better than if they enroll in colleges that should be easier but where they are under matched. This includes starting at a community college rather than a four year university.

(For those wanting to explore this specific topic further or more broadly learn about what predicts four year college success, Crossing the Finish Line is a must read. Its findings are taken from the most detailed data ever assembled on the topic.)

The basic case for my statement comes from the recent The Rising Cost of Not Going to College study by the Pew Research Center. As I covered in the column and speech the study found:

Today the unemployment rate for 25-32 year olds with a bachelors or more is 3.8 percent; for those with a two year degree or some college its 8.1 percent; and for those with a high school degree 12.2 percent. In terms of median annual earnings for full-time workers: those with a bachelors or more earn $45,500; two-year degree or some college $30,000; high school degree $28,000. No matter what you hear, the reality is Millennials with a four-year degree are doing substantially better than their peers without a four-year degree. 

The gap in median annual earnings for young, full-time workers has grown consistently for those with a four-year degree compared to those with a high school degree, from $7,500 in 1965 to $17,500 today. The gap between 25-32 with a four-year degree and those with some college or an associates degree has grown from $5,000 in 1965 to $15,500 today. 

In a terrific column on a new Economic Policy Institute study, New York Times The Upshot editor David Leonhardt writes:

… the new Economic Policy Institute numbers show that the benefits of college don’t go just to graduates of elite colleges, who typically go on to earn graduate degrees. The wage gap between people with only a bachelor’s degree and people without such a degree has also kept rising. Tellingly, though, the wage premium for people who have attended college without earning a bachelor’s degree — a group that includes community-college graduates — has not been rising. The big economic returns go to people with four-year degrees. (Emphasis added.)

For high school graduates who are interested in jobs and careers that can be obtained with a two year degree or occupational certificate clearly enrolling in a community college is a good choice that almost certainly will pay off long term. But the data are clear that high school students who want to earn a four year degree make the right choice when they resist the growing chorus that claims that they would be better off learning a trade at a community college or a technical training program.

Students choosing to attend and graduate from a four year university, including those focused on the liberal arts, are taking the most reliable path to a good paying career. And the case for that choice over a two year degree or occupational certificate is stronger today than in the past and is likely to be even stronger tomorrow than today.

The post Community colleges appeared first on Michigan Future Inc..

What Schmidt understands is that the best way to prepare for a successful career/meet the Governor’s career ready standard is getting a four year degree or more. The evidence is overwhelmingly: those with a four year degree earn more and work more over a career than those with less education. And the gap since the onset of the Great Recession is growing, not, as conventional wisdom increasingly tell us, shrinking .

The Business Journal writes: “In determining Michigan’s economic future, “probably the single most important issue is talent,” according to Gov. Rick Snyder — specifically, technically skilled talent for Michigan manufacturing and agriculture.” (Emphasis added.)

Does the Michigan economy need more young adults after high school to pursue careers in the skilled trades and other technical jobs requiring the equivalent of an Associates degree or occupational certificate? Of course. Although not mainly in manufacturing and agriculture. Two sectors that are a declining component of the American and Michigan economy.

But the need for more skilled technicians should not be instead of more Michiganders earning four year degrees. As the chart below on the Millennials economic well being by education attainment from the Pew Research Center makes clear Michigan’s education system is not too focused on college degrees. One can make a strong case that the opposite is the case. That both the Michigan public and its leaders––a too large proportion of both political and business––are not committed enough to the need to increase four year degree attainment.

It is not just the most reliable path to prosperity for individuals but also the state as a whole. States with high college attainment rates are overwhelmingly the most  prosperous states. Michigan is 34th in the proportion of adults with a four year degree which leads to being 35th in per capita income.

At the 2011 Mackinac Policy Conference, Geoffrey Canada, President and CEO of Harlem Children’s Zone offered what might be the best advice on whether going to college makes sense for all Michigan kids or not when he said: “… I tell people, when you’re in doubt, when the experts at Harvard are writing that college is not for everyone, when in doubt, do what rich people do. … I know a lot of wealthy people. And I have yet to see one of my friends who has three kids, and says ‘Ok, I’m sending you to Harvard, I’m sending you to Princeton, but you, I’m thinking hair dresser school,’ right? I’ve never heard it. They only have one goal, which is to get all of their kids in college.” (Emphasis added.)

And to get to the best possible four year degree university, the affluent by and large send their kids to college prep high schools either in the best public schools or private schools. Schools that emphasize a broad liberal arts curriculum. And where vocation training in most of those schools is not offered.

As Geoffrey Canada concluded: “… if you get paid to teach other people’s kids, you should have the same expectations for those kids as you do your own.” Exactly!

The post Go to college II appeared first on Michigan Future Inc..

What is amazing is that this is news. If facts matter––and increasingly they don’t in our politics or public conversation––this is the ultimate no-brainer.  As Schmidt says it can’t be clearer: the value of a four-year degree over a career is rising, not falling. See this recent report from the Pew Research Center and this report from the Hamilton Project at the Brookings Institution and this report from the Center on Education and the Workforce at Georgetown University for the detailed evidence.

As I wrote in a post three years ago: “The value of a college degree is far more than how quickly a graduate gets a first job and how much it pays. These are the short term metrics that fuel the “college isn’t worth it” nonsense. Rather the payoff is over an entire career. It comes from having skills that give you a competitive edge in all industries and most occupations, in having skills that may not be in demand today but will be in the future and in learning how to learn so that you can better spot new opportunities and take advantage of them in a constantly changing labor market.”

(The Pew and Georgetown research makes clear that even if the measure is only the first job, those with four-year degrees are doing substantially better than those with less education on both employment and pay in the still less than robust post Great Recession  economy.)

The value of higher education is in developing broad skills –– including becoming a lifelong learner –– that are the foundation of successful forty year careers. Careers that will look much more like rock climbing than ladder climbing. Building a foundation to do well over a long career is only going to grow in value in an economy where technology and globalization accelerate creative destruction. Destroying jobs and occupations and creating new, unimaginable, jobs and occupations at a quicker and quicker pace.

The post “Go to college” appeared first on Michigan Future Inc..

Using data from the Census Bureau’s Current Population Survey (CPS) it makes clear that in terms of both employment and wages 25-32 year olds with a four year degree are doing substantially better than their peers with some college or a two year degree as well as those with only a high school degree. So much for the increasing conventional wisdom that many young adults would be better off with an occupational certificate or community college degree rather than a four year degree!

The report presents a comparison of 25-32 in 2013 by education attainment. As well as comparing today’s 25-32 years olds to those in previous generations. They do that by looking at CPS data for 25-32 year olds in 1969, 1979, 1986 and 1995. Each is four years into a national recovery from the trough of a recession. And with all earnings in 2012 dollars to correct for inflation.

Lets review first the headlines for today’s 25-32 year olds by education attainment.

Unemployment rate

• Bachelors or more: 3.8%
• Two year degree or some college: 8.1%
• High school degree: 12.2%

Median Annual Earnings for full time workers

• Bachelors or more: $45,500
• Two year degree or some college: $30,000
• High school degree: $28,000

No matter what you hear the reality is Millennials with a four year degree are doing substantially better than their peers without a four year degree. End of story!

(The good news is that the Millennials seem to be ignoring the conventional wisdom. They have a much higher four year degree attainment rate than previous generations. 34 percent compared to around 25 percent for Generation X and the Boomers and only 13% for the generation before the Boomers which Pew calls the Silents.)

In many ways what is more interesting in the report is the comparison of generations data. Pew summarizes those findings this way:

On the one hand, it is clear that young, college-educated workers are having more difficulty landing work compared with earlier cohorts of young adults. They are more likely to be unemployed, and it takes them longer, on average, to find a job. On the other hand, once they’re employed, their earnings are higher than those received by earlier cohorts of young, college-educated adults. For less-educated young workers, there is no upside: They are more likely to be unemployed and they are spending more time searching for a job compared with less-educated young workers who came before them. And their earnings are significantly below those received by less-educated young workers in earlier generations (with the exception of high school-educated Gen Xers).

The unemployment rate for today’s 25-32 year olds is substantially higher than those of the same age in 1969, 1979, 1986 and 1995 at all education levels. The unemployment rate ranged in those years from 1.4-2.8 percent for those with four year degrees compared to 3.8 percent today; from 3.2-5.0 percent for those with two year degrees or some college compared to 8.1 percent today; and from 4.3-9.0 percent for those with high school degrees compared to 12.2 percent today.

But the median annual earnings story is different. Here those with a four year degree today are doing better than their peers of previous generations. Certainly not the story we are told over and over again. Today’s 25-32 year olds with a four year degree working full time have median annual earnings of $45,500. The range for previous generations at the same phase of the cycle and in inflation adjusted dollars is $38,833-44,770. The gap in median annual earnings for young full time workers has grown consistently for those with a four year degree compared to those with a high schools degree from $7,500 in 1965 to $17,500 today.  (The proportion of those working who worked full time is virtually the same for the generations at around 90 percent.)

This is not true for those who have a two year degree or some college and those with only a high school degree. In both cases those 25-32 year olds working full time have lower inflation adjusted median annual earnings than the previous four generations. For those with two year degrees or some college the gap is between roughly $2,000 and 6,500. For those with only a high degree the gap ranges from roughly even for Generation X (in 1995) to $4,000 in 1979 (what Pew calls Early Boomers).

What is most surprising to me is how poorly 25-32 year olds with some college or a two year degree are doing compared to their peers both with only a high school degree and those with a four year degree. The earning premium for those with some college or a two year degree compared to those with a high school degree has collapsed. From about $4,000 in 1979, 1986, and 1995 to $2,000 today. And the gap between those with a four year degree and those with a two year degree or some college has grown steadily from $5,000 in 1969 to $15,500 today. (From 1995 to 2013 its grown from $11,000 to $15,500.)

The post College educated Millennials winning appeared first on Michigan Future Inc..