Education-Based Inequality Increased In 2010

I usually don’t like graphs with lots of lines, but this one is too important to pass up.

This chart shows median weekly wages for full-time wage and salary workers, adjusted for inflation, and indexed to 2000 (the data comes from the BLS   “usual weekly earnings” series). There are three things to take away from this chart. 

*First, the wage gap between holders of advanced degrees and everyone else widened in 2010.

*Second, workers with advanced degrees have done much  better than everyone else over the medium run,  both since 2000 and since the Great Recession started in 2007. For example, since  2007,  real weekly wages for advanced degree holders have risen by 3.8%, compared to a 0.1% decline for holders of bachelor’s degrees only.

*Third, over the past ten years, the pay for a bachelor’s degree has more or less tracked the pay for high school grads. 

Now, within advanced degree holders, the pay inequality has widened as well. Take a look at this chart. The top decile–that is, the dividing line between the top 10% of advanced degree holders and everyone else–has risen 13% over the past ten years.  The median and the third quartile (top 75%) has risen by 3-4%, while the bottom 25% of advanced degree holders is actually down since 2000.

Comments

  1. The recession didn’t start till 2008, NBER marks the peak as Dec 2007. Wages had finally started going up just before that in 2007, that came to a screeching halt when the markets crashed in late 2008. Grade and degree inflation devaluing lower degrees along with the perceived benefits from specialization probably kept advanced degrees aloft a bit. All in all, that’s a very narrow growth range of -3 to 15%: wages basically tread water as health benefits ate up more and more of total compensation. Frankly, given the heavy debt and opportunity costs of advanced degrees, the fact that they only gained slightly further damns them.

Trackbacks

  1. […] industries, and the sharp decline in real wages for young college graduates (see my post here). (Young college grads, because they have no investment in legacy sectors, inevitably flock to the […]

  2. […] industries, and the sharp decline in real wages for young college graduates (see my post here). (Young college grads, because they have no investment in legacy sectors, inevitably flock to the […]

  3. […] Mike Mandel […]

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