Education Pays, But An MBA Pays Better
According to the Oct. 19 Wall Street Journal (The WSJ), the typical American worker with a four-year college degree earns 45 percent more than a similar worker who earned only his or her high school diploma. But, according to the report, in today’s economy a bachelor’s degree no longer guarantees wage increases large enough to beat inflation. The WSJ Capital column reported that after adjusting for inflation the only group of college-educated American workers who enjoyed rising wages over the past five year were those with MBA, JD, MD, and to a lesser extent PhD degrees.
A current population survey included in The WSJ article showed that individuals with business, law, and medical postgraduate degrees—who make up 1.9 percent of the American workforce—enjoyed a 10.6 percent increase in wages between 2000 and 2005. During the same time period, individuals with PhD degrees average wage increased only 2.9 percent, the survey showed. Compare that to individuals with other postgraduate (Master’s) degrees whose average wage actually dropped 1.8 percent over the past five years.
The article gives three explanations for the trend, including that the demand for educated workers is growing faster than the supply. In the middle—where most four-year college graduates work—imports, overseas outsourcing, and technology, the article explains, appear to be reducing U.S. employer demand most significantly, and thus restraining wages.