College Degree Is Shield Against Recession
October 5, 2012
There continues to be debate about the value of a college education and whether or not the benefits of a bachelor’s degree outweigh the cost in dollars and time it takes to get a degree.
According to a report recently released by Georgetown University’s Public Policy Institute’s Center on Education and the Workforce, the answer continues to be a resounding “yes.”
The report, entitled “The College Advantage: Weathering the Economic Storm,” shows us that since the Great Recession began in late 2007, nearly four out of five jobs lost were held by those with no formal education beyond high school. Furthermore, employment for those with a bachelor’s degree actually rose during the recession.
According to the report, some 7,176,000 total jobs were lost during the recessionary period between December 2007 and January 2010. Of those, 5,611,00 were lost by those holding a high school diploma or less. Workers with some college education or an associate’s degree recorded 1,752,000 job losses while those with a bachelor’s degree or better actually gained 187,000 jobs.
The Center’s 2011 report, “The College Payoff” shared that workers with a bachelor’s degree earned 84 percent more over a lifetime than high school graduates in 2009, up from 75 percent 20 years earlier.
As a global manufacturing center, our area has been particularly hard hit by the recession which has seen more than two-thirds of jobs lost come from the construction and manufacturing sectors of the economy. Interestingly, education attainment level is a factor there as well: construction employment dropped only four percent for those with a bachelor’s degree or better, compared to a 24 percent job loss for those with a high school diploma or less.
As valuable as a college education has been throughout the recession, it will be essential in coming years as it is anticipated that 60 percent of jobs will require some higher education credential by the year 2020. Currently, only 42 percent of young adults hold a post-secondary certificate or degree. According to projections from the Governor’s office, the state of Georgia will require 250,000 additional college graduates to meet workforce needs within the next eight years.
Consider the student pipeline of 100 ninth grade students in a Georgia public high school: research tells us that 59 of those will graduate high school and 29 will start a four-year college. Of those, only 21 will come back for their sophomore year and just 14 of those will graduate on time.
Low educational attainment has a seismic impact on the total economy. A study entitled “The High Cost of Low Graduation Rates” released by the American Institutes for Research, reported that the nearly half million college dropouts recorded in one year gave up some $4.5 billion in income they would have otherwise earned on which taxes that would have been paid.
The report extended the analysis to project that over the span of their working lives, the cumulative loss from one class of dropouts would be $158 billion in lost income, $32 billion in lost federal income taxes, and $7 billion in lost state income tax.
Our region has historically had a very low level of educational attainment: only 15 percent of adults 25 and over holds a bachelor’s degree or higher, compared to the state and national average of 27 percent. There is much work to be done but the evidence is compelling that a college education is not only a good personal hedge against recession, but also essential to the economic vitality of our community, region, state, and nation.