by James A. Bacon
Wonder why young Americans are souring on the higher-ed value proposition? The Old Dominion University Strome College of Business’s “2024 State of the Commonwealth Report” supplies data that provides the answer.
Ten years after leaving high school, one in five bachelor’s degree recipients earned less than the median income of high school graduates here in Virginia.
The aggregate numbers hide a lot of variability between institutions, degree programs, and students’ socioeconomic background, the report cautions. But the bottom line is clear.
“Substantial proportions of college graduates end up earning less than the members of their high school graduating classes who did not attend college,” states the report in its chapter entitled, “Does It Still Pay to Attend College in Virginia?”
Even at the University of Virginia, the state’s flagship university with arguably the most selective admissions standards, nearly one in twelve graduates earned less than the median income for Virginia high school grads.
Worse yet at the opposite end of the spectrum, at the Virginia University of Lynchburg only 47.9% of graduates earned the high school average. By that measure, a majority of VUL grads were worse off than if they’d just entered the workforce after graduating high school! (The report did not examine for-profit colleges where the comparative earnings numbers for most institutions are even worse.)
Correction: In the paragraph above, I had mistakenly referred to the University of Lynchburg, a different institution than the Virginia University of Lynchburg.
The report does not address the social fallout from what some observers call “elite overproduction.” But the impact should be obvious: There will be considerable social discontent when thousands of college graduates struggle to pay off their debt with high school grad-level wages. How many baristas will suffer depression and anxiety as they direct their disillusion inward? How many waiters will become radicalized politically as they turn their disappointment outward and seek someone or something to blame?
The ODU report also does not touch upon the all-consuming racial/ethnic demographics of the low-earning graduates. We know that Blacks and Hispanics are more likely to drop out of college than Whites and Asians; they are more likely to be burdened with debt that they must repay even though they didn’t earn the credentials they counted on to generate higher incomes. Are low-earning college graduates also disproportionately comprised of Blacks and Hispanics? If so, would they have been better off had they chosen to enter the workforce debt-free and gotten a head start earning on-the-job experience?
Higher-ed propaganda promoting college attendance stresses the fact that the average college bachelor’s degree recipient earns about $1.2 million more over their lifetime than a high school graduate.
“Whether this turns out to be true for a specific individual,” notes the ODU study, “depends upon a variety of factors — what college the individual attends, what subjects they emphasize in their studies, and where the college is located.” Further, earnings may vary over time, depending upon fluctuating demands for particular skills in the labor market.
In another complicating factor, the authors question whether the higher earnings of some college grads can be attributed to the value added by the institution they attended or whether the higher earnings reflect their native abilities, their family backgrounds, and their fields of study.
The report acknowledges that college students derive value from college education that cannot be measured in dollars: “If someone’s goal is to learn and better appreciate French Impressionist painters or to master the Japanese language so that one can converse with one’s relatives, then most of the analyses we have presented in this chapter may be interesting but are largely irrelevant.”
Very true. The college experience — which can also include a lot of partying, football games, dating and mate-seeking — can be viewed in economic terms as a form of consumption. But Virginia (and other states) don’t invest billions of dollars in their public systems of higher education so students can engage in four years of partying, finding themselves, or appreciating other cultures. They invest billions of dollars (1) to equip citizens with the skills to thrive in the increasingly knowledge-based economy, and (2) to provide a ladder of social mobility for the poor and minorities.
Given the numbers published in the report and highlighted in this post, one might legitimately ask how well Virginia’s public and private higher-ed institutions are advancing either goal. The authors of the study endeavor to address that question. The quick answer is that there is no simple answer. I’ll explore more of ODU’s findings in follow-up posts.
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