NY Federal Reserve: 25% of college grads earn as much as high school grads

The Federal Reserve has repeatedly reported this year that it still pays to attend college, despite the fact that graduates are leaving school under the stranglehold of enormous debt levels, and not entering the labor force with meaningful employment.

Although the median college graduate earns between 60 and 70 percent more than the average high school graduate, the bottom 25 percent of college-educated workers are not gaining that same advantage.

According to a study authored by the New York Federal Reserve Bank (NYFRB), college isn’t necessarily a fantastic investment for all interested parties. The report discovered that the lower quartile of college graduates earned roughly the same amount as high school graduates, and sometimes even less.

“Overall, these figures suggest that perhaps a quarter of those who earn a bachelor’s degree pay the costs to attend school but reap little, if any, economic benefit,” wrote Jaison R. Abel and Richard Deitz. “In fact, once the costs of attending college are considered, it is likely that earning a bachelor’s degree would not have been a good investment for many in the lowest 25 percent of college graduate wage earners. So while a college degree appears to be a good investment on average, it may not pay off for everyone.”

This isn’t necessarily a new concept. A chart published in the report – using data from the Bureau of Labor Statistics (BLS) – showed the amount of pay for a high school graduate and a bottom 25 percent college graduate has been roughly the same since the 1970s. At times, a high school graduate has earned more than someone with a Bachelor’s degree in a lower quarter – from about the 1970s to roughly the mid-1980s.

In other words, if you’re not someone who is an avid scholar and receives superb grades all year around, then perhaps college or university isn’t the place for you. Instead, it’s these individuals who may be better positioned to receive higher pay if they gained a trade or met the demand in certain areas of the economy where there are labor shortages.