The value of a high school degree has collapsed since 1980 – By Aimee Picchi (CBS News) / Nov 11 2019
- The average income of high school grads has declined 12% during the past 40 years.
- Advanced degree holders, meanwhile, have enjoyed an 18% increase in income during the same time.
- The value of a high school degree has declined along with a loss of manufacturing jobs and an increase in low-wage service jobs.
The U.S. may be returning to levels of inequality last seen in the Victorian era, with a stark divide between the haves and have-nots that economists say could be due to educational attainment.
Workers with advanced degrees who work more than 40 hours a week have boosted their income since 1980, according to a new study from economists at UCLA and the Pontificia Universidad Católica de Chile. At the same time, wages for workers with only high school degrees have declined, partly due to a loss of manufacturing jobs, the economists write in a new working paper at the National Bureau of Economic Research.
In other words, the value of a secondary education has declined during the past 40 years, with the average incomes of high school grads dropping 12% during that time. Income for advanced degree holders, meanwhile, has jumped 18%, the study noted. One issue, the economists say, is that low-wage service jobs in hospitality, leisure and health care have popped up to fill the void left by higher-paying manufacturing jobs.
“To end this essay provocatively, we suggest we may be returning to the income inequality of the Victorian age but with talent replacing land as the source of inherited wealth and power,” the economists, Chile’s J. Rodrigo Fuentes and UCLA’s Edward E. Leamer, wrote in the paper.
The findings come as the gulf between the top 1% of income earners and everyone else is the widest it’s been in at least 50 years, according to Census data. While every society has some level of inequality, an excessive imbalance can hamper economic growth and create challenges to social mobility.