Bad Decade for Male College Grads

For years I’ve been tracking the decline in the real earnings of college-educated workers. Now, with the latest income statistics, we can see just what the decade of the 2000s has wrought.

In terms of real earnings, male college graduates were absolutely pounded, taking a 9.7% decline in real pay from 2000-2010 (that’s bachelor’s only). Meanwhile female college grads saw no decline at all in real earnings. (we’re looking here at the real mean earnings of full-time workers 25 years and over).

For every educational category, the same pattern holds: Males doing worse than females in terms of change in real earnings. This is not directly related to the sharper job loss for men, since this data covers only full-time workers. However, it does provide corroborating evidence that the labor market seems to have moved against male-dominated industries and occupations, affecting the college educated as well as workers with only high school diplomas.

This is obviously not universal, given the high demand for computer and tech jobs, which tend to be male dominated. For example, 80% of computer software engineers are male. which should be a plus for male wages. But the ‘tech effect’ seems to be overpowered by the ‘health-education-effect’, since health and education occupations, which have done well over the past decade, are for the most part are disproportionately female.

A Bad Decade: 10-Year Private Income Growth Goes Negative

Each month the BEA releases figures for personal income and disposable personal income. These figures are a mix of private sector income and money received by individuals from the government. These government payments take the form of wages paid to government employees, and social benefits such as Medicare and Medicaid.

So I decided to take a shot at calculating ‘private’ personal income. From personal income I removed government social benefits (about $2.1 trillion in 2009) and wages paid to government employees (about $1.2 trillion). Then I added back in contributions for government social insurance, such as Social Security and Medicare payroll taxes (just under $1 trillion). Finally, I adjusted for inflation and population size to get a figure for real ‘private’ personal income per capita.

Here’s a chart of  the 10-year growth rate of real private personal income per capita (the first quarter figure for 2010 is based on the average of January and February).  

Over the past decade, real private personal income per capita has fallen at a 0.2% annual pace, the first time that has happened since the Great Depression.

Let’s compare this with the usual figure quoted by economists, real disposable income per capita. Real disposable income per capita–which includes government wages and social benefits, and adjusts for tax changes–rose at a 1.2% rate over the past ten years. In other words, when we add in government spending increases and tax cuts, real incomes per capita rose rather than fell.

The logical conclusion is that the private sector has been crapped out for the past ten years. Even before the crisis hit, the main thing that  kept the economy afloat was the succession of Bush tax cuts and the expansion of federal spending which boosted benefits,  particularly in healthcare. 

This was a bad bad decade.