We keep hearing that students who stay in school supposedly make more money than students who drop out. This week, we'll look at some comparisons between college grads and dropouts to see if this axiom holds water. If so, then we can justify going into debt with a college career, because - hopefully - this indebtedness will lead to a higher-paying job opportunity upon graduation. If this saying isn't true, then how much education is enough education? Where's the breaking point?

One site I used for research on these questions is the NCES (National Center for Education Statistics) Digest of Education Statistics 2002, Chapter 5. This chapter deals with comparisons of educational attainment and workforce characteristics with tables that show "labor force participation and income levels of high school dropouts and high school and college graduates." I think this chapter is summed up best in the paragraph under "Income":

Between 1994 and 2000, the median annual income of male full-time year-round workers, when adjusted for inflation, increased by 6 percent and the income for females rose by 7 percent. Women's incomes remained lower than men's incomes, even after adjusting for level of education. The average 2000 incomes for full-time year-round workers with a bachelor's degree were $56,334 for men and $40,415 for women.

While the figures above seem a little dim, they also seem somewhat appropriate. About two years ago, I wrote an article about women in the workforce for BUYandHOLD, where I reported that "it appears women's progress in the workplace is regressing. A recent report released in January showed top women executives' pay fell between 1995 and 2000, increasing the gender gap in workforce equality. For example, female managers in the communications industry made 86 cents for every dollar earned by male managers in 1995. In 2000, a woman in the same field made 73 cents for every dollar earned by a man."

If we base the assumed 73 cents on that man's $56,334 salary at NCES, then women would make - on the average - more like $42,450 per year. Obviously, something's wrong here. That extra $2000+ could mean a lot to a single woman with children. At $40,415, women are making more like 71.5 cents for every dollar earned by a man. Either way, these figures aren't all that hot for men OR for women.

Is it any different anywhere else? Australia reported this year that degree-bearing graduates still make more money than non-graduates, but the margin has grown narrower over the past few years. Another report from the UK shows that "average graduate earnings are 59% above those of non-graduates." Of course, as the UK report points out, the percentage of college grads per country often influences the outcome of salary levels. Interestingly, the UK shows less than 50% of their young adults in pursuit of college degrees, while 70% of the young adults in Australia pursued a higher education. Do these figures outline the laws of supply and demand, perhaps?

After I re-read the previous BUYandHOLD article, I wanted to return to Junior Achievement, to read some new teen polls about work and education. The irony hit me this go-round when I read the poll titles on the JA/Harris Poll Interactive Poll Results Page. What do you think about the juxtaposition of the following headlines?

"One-Third of Teens Would Act Unethically to Get Ahead,"

"Parents and Teachers Named Top Role Models Among Teens for a Second Year in a Row."

Yikes! What are we teaching our kids? To answer that question, I followed a link to the 2004 JA Worldwide Poll on Global Business. This poll is revealing, as the returns are tabulated on a variety of ages in ten different countries. This in itself will modify some of the answers, but when some poll responses come in sometimes 25% higher than other poll responses, the reader can be assured that a true majority of these teens were much more concerned about one problem more than another problem.

For instance, on page 5 you'll find that a total of 30% of the responses were concerned more about unemployment than any other issue listed, including terrorism, lack of education, and national and personal debt. Of course, take into account that the highest return in this average came from South Africa (46%), where teens are also concerned about poverty (22%). Teens in America are slightly more concerned about terrorism (28%) than they are about joblessness (26%). I don't know about you, but that combination of concerns would keep me awake at night.

There's an interesting response from these teens on page 9, where they were asked what was most important to their economy's future success. Note that the question does not focus on a specific country or economy, so it's difficult to know what these teens were thinking when they answered the question. However, the answers are fairly unanimous across the board - 40% of the total responses would like to see more investments to create a steady growth of jobs.

The picture these teens paint seems realistic and fair. Most teens worldwide are concerned whether they'll have jobs in the future, and most teens can only hope that higher educations will make them more desirable to future employers. If you doubt this, check out the JA Worldwide Poll on Workforce Preparation. I won't go into detail, but only 42% of U.S. teens are "somewhat confident" in the ability of this nation's economy to provide the jobs that they and their friends will soon need (page 14).

While I did learn that college graduates make more than non-grads, the numbers seem small compared to media hype about this topic. What we might focus on, perhaps, is the teens' concerns about investments to create a steady growth of jobs?sometimes we need to listen to our teens, don't you agree?

Until Next Week,
Linda Goin