As we take a break from session talk for a couple weeks, I told you last week about a study I have read called “The College Payoff.”
After reading more of the report on the study, undertaken by a research center at Georgetown University, I am more convinced than ever before that what we have been hearing, teaching and preaching for over 25 years through the work of the Kentucky General Assembly, the Pritchard Committee for Academic Excellence, the KEA and countless others is true: “No matter how you cut it, more education pays,” as the Georgetown study puts it.
The gist of the report is that earning a two or, especially, four-year degree means greater lifetime earnings than a high school diploma, and, in many cases, advanced degrees mean even greater earnings (all earnings are given in 2009 dollars). But there are variations, even among degree holders.
The report demonstrates that age, gender, race or ethnicity and, “above all”, occupation are very important factors in how much a degreed person earns. This week, will focus on the occupation factor and the range of pay within specific jobs that depends greatly on higher education level.
First, let us look at the top 10 occupations per education level (no high school diploma, high school diploma, some college/no degree, Associate’s degree, Bachelor’s degree, Master’s, doctoral and professional degree), cited in the report and see what they offer. Overall, lifetime earnings of those with no high school diploma are $973,000, with drivers/sales workers and truck drivers, construction workers, and carpenters the highest paid with lifetime earnings of up to $1.3 million. For those with a high school diploma, lifetime earnings are $1,304,000, although here is where education level starts to pay off: Drivers/sales workers and truck drivers earning around $1.3 million over their lifetime with no diploma are earning over $1.5 million over a lifetime with a diploma, and factory or production supervisors and other managers with a diploma are earning more than $1.8 million over their lifetime.
The numbers only grow from there. (Average lifetime earnings below are based on the top 10 occupations per educational attainment level, in 2009 dollars):
· Average lifetime earnings for those with some college/no degree is $1.547 million. Managers of retail workers earn $1.507 million over their lifetime, while managers in other fields earn $2.22 million. Sales reps in both wholesale and manufacturing earn over $2 million over their lifetime.
· For those with an Associate’s (two year) degree, average lifetime earnings rises to $1.728 million. The highest earners are Registered Nurses (at $2.267 million lifetime earnings) and medical technologies and technicians (at $2.187 million lifetime earnings).
· For Bachelor’s (four year) degree holders, average lifetime earnings rise significantly to $2.268 million. Managers with a four year degree earn over $3 million in their lifetime (about the same as sales reps and financial managers with a four year degree). Computer software engineers with the same level of education earn over $3.5 million in their lifetime, while marketing and sales managers take in slightly less at $3.4 million. Those earning the most at the Bachelor’s level are chief executives, with $4.48 million in lifetime earnings.
· Those with a Master’s degree (earned typically after two years graduate study) have average lifetime earnings of $2.67 million, according to the report. Management lifetime earnings rise to $3.76 million, although the highest paid are software engineers (at $3.8 million lifetime earnings) and chief executives with lifetime earnings of more than $5.16 million. The report makes clear that more pay for those with Master’s degrees follows specialization in their chosen field and that “additional educational preparation—which is often only two years of schoolwork, leads to a significant payoff—but that payoff varies by occupation.”
· Those with a doctoral degree (typically four or more years of graduate study) have average lifetime earnings of $3.25 million. Physicians, many managers, pharmacists and chief executives can earn significantly more than that.
· The occupation with the highest lifetime earnings, based on the report, is the career of professionally degreed physician/surgeon with lifetime earnings of $6.17 million. Other professionally degreed jobs are dentist, pharmacy, veterinarian, accountant, lawyers and judges, postsecondary teachers (professors), and nurses. The report clearly states that in the managerial field, particularly, is undercounted because there are so many industry-specific managers out there. Remaining occupations in the professional degree top 10 are auditors and secondary school teachers, as well are Registered Nurses “(who actually make less than their counterparts with a Master’s degree).”
Lifetime earnings is a very direct example of how education pays in our state and nationally. Next week, we’ll look a little more at this topic, and other topics of note. Have a great week.