In a new publication from the Department of Workforce Services, Local Insights, and their traditional Trendlines publication, recent articles reported on numerous studies regarding educational achievement levels, salaries and unemployment rates.
While there are no surprises in the findings of these studies regarding the strong correlation between higher education and higher salaries, there are other correlations that were enlightening, and even somewhat surprising.
In addition to confirming the adage that “education pays,” the findings of these studies also show that the higher the education level, the lower the unemployment rate.
The following indicates the Utah Educational Attainment, Unemployment and Median Annual Earnings as reported by the U.S. Bureau of Labor Statistics CPS Survey:
• Less than high school: median earnings $23,542 with an unemployment rate of 14.1 percent.
• High school or equivalent: median earnings $33,304 with an unemployment rate of 9.4 percent.
• Some college or associate degree: median earnings $38,576 with an unemployment rate of 7.8 percent.
• Bachelor’s degree or above: median earnings $60,030 with an unemployment rate of 4.3 percent.
The additional correlation of higher education and lower unemployment rates comes somewhat as a surprise, especially with such a large spread between those with less than a high school education, that came in at well more than double the current state unemployment rate of 6 percent to those with a bachelor’s degree or above that came in at a very low 4.3 percent unemployment rate.
That spread of almost 10 percentage points is somewhat surprising and certainly adds more substance to that “education pays” adage.
Another interesting finding of these studies is that, independent of economic conditions, volatility in employment decreases as the level of education increases. While the unemployment rate among college graduates did increase with the recent recession, it did not increase as much as in those groups with less than a college education.
Specifically, the 2002 unemployment rate for college graduates was below 3 percent (which is close to or at full employment) while the unemployment rate for those less than a high school diploma was over 8 percent. As the recession started and deepened in 2008, the spread in unemployment rates between college graduates and those with less than a high school diploma widened.
Also, according to the U.S. Census Bureau’s Local Employment Dynamics program (as reported in an article in Trendlines), while some industries pay more than others, all industries in Utah pay degreed workers more than those with less than a college degree.
It is important to know that all of these studies were done with data of those 25 and older, thus ensuring the data is not skewed because of younger adults who may not be in the labor force as yet.
Yes, education pays, but it pays in far more than just a higher salary expectation; it pays in better employment prospects and in significantly lower unemployment rates.
More information about these studies and other labor force/employment information, including the above-mentioned publications and articles, can be found at www.jobs.utah.gov under the ‘Information’ tab.
Ron Campbell has worked extensively in the job preparation and job search industry. He can be reached at 801-386-1111 or firstname.lastname@example.org.