Get an education they said, you’ll make more money they said, and although that’s not untrue as a college graduate has the potential to make 1 million dollars more over their lifetime compared to someone with just a high school diploma. This discussion is based more on economics than educational statistics. Let’s take a look how and if education can solve income inequality.
So, if you haven’t picked up on the pattern established in the first part of this article, underemployed Ph.D. or Masters Degree graduates will be compensated roughly the same as a someone who only attained a bachelor’s degree and underemployed bachelor’s graduates will earn roughly the same as someone with a high school diploma or lower. So the financial benefits and potential earning power of a degree is negated when the person with the degree is underemployed. Also, if you are one of the 66% of public school graduates you now also have to pay back your average $29.400 loan.
Opportunity cost is a term used in economics to describe what it costs you to do one profession or professional enrichment instead of doing something else. So if you are studying Archeology and Medieval Sewage Systems instead of working you are not only paying out the wazoo for books, tuition and housing, you’re also missing out on about $9.000-15.500 worth of income by not working. If we do some simple math and take into consideration that 60% of students take more than six years to graduate, then that amount (the average $12250) adds up to roughly $75000. And let’s not forget that even jobs that don’t require diplomas usually reward experience so you’re also missing out on that.
Ultimately, as tested by Laurence Kotlikoff Professor of Economics at the University of Boston, someone that went into a trade (such as plumbing, construction or facility maintenance) has the same buying power as a person with a bachelor’s degree and, even more, buying power than someone with a master’s or a PHD (from a prestigious private school at that).
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