College Degree Requirements Creep Into Lower Income Brackets

Earlier this month, nan Kraft Heinz Company KHC announced it is seeking an “Oscar Mayer Wienermobile Spokesperson,” whose occupation responsibilities see driving a “27-foot-long basking canine connected wheels” crossed nan state representing nan Oscar Mayer brand. The position, which pays $35,600 per year, requires a bachelor’s degree. The occupation posting is unluckily emblematic of a broader trend: nan slow creep of assemblage grade requirements into lower-paid jobs.

In theory, a assemblage acquisition equips students pinch valuable skills that let them to nutrient much successful nan labour market. Everyone wins: graduates gain higher salaries reflecting their expanded productivity, and nan system benefits from much skilled workers. This is 1 logic that nan national authorities has invested hundreds of billions of dollars successful expanding entree to higher education.

But there’s a danger. Broad subsidies for higher education, by expanding nan number of workers pinch degrees, whitethorn simply lead employers to ratchet up nan acquisition requirements they connect to occupation descriptions. Occupations that were erstwhile accessible to group pinch only a precocious schoolhouse certificate whitethorn statesman to require assemblage degrees. But if those degrees don’t make workers much productive connected nan job, commensurate net increases whitethorn not travel heftier acquisition requirements. Overall, America’s sizeable finance successful higher acquisition whitethorn not output nan returns we expect—either for students aliases for society.

Measuring grade inflation

The yearly American Community Survey (ACS) asks a ample sample of American workers astir their incomes and acquisition levels. If rising assemblage attainment rates make workers much productive, assemblage should thief much Americans move into higher income brackets. College attainment rates within a changeless income range, by contrast, should stay astir nan same. But if higher assemblage attainment fuels grade inflation, we should spot rising acquisition levels wrong little income brackets.

In 2000, 16% of prime-age workers earning astir $35,000 per twelvemonth successful today’s dollars—roughly nan aforesaid net arsenic our basking canine driver—held a bachelor's grade aliases higher. But by 2022, that proportionality had risen by much than half. Roughly a 4th of workers earning Wienermobile-level salaries person astatine slightest a four-year degree.

The aforesaid arena has affected different income brackets. Between 2000 and 2022, nan stock of prime-age workers earning astir $65,000 per twelvemonth pinch astatine slightest a bachelor's grade roseate from 35% to 51%. While workers without a four-year grade erstwhile dominated nan ranks of group enjoying this middle-class modular of living, a assemblage grade is now nan norm alternatively than nan objection among this group.

College grade requirements person steadily crept down nan income ladder complete time. In 2022, $65,000 was nan lowest net astatine which a mostly of prime-age workers held astatine slightest a bachelor’s degree. Ten years ago, however, nan “threshold salary” astatine which assemblage grade attainment flips from number to mostly position was $80,000. Ten years earlier that, nan period net was $95,000. If we spell backmost to 1990, only workers earning much than $100,000 were likelier than not to person a four-year degree. (All figures are adjusted for inflation.)

These patterns person troubling implications. First, a little period net intends that middle-income profession pathways are progressively closing to individuals without assemblage degrees, who relationship for 62% of nan big population. Second, for those who do be college, nan financial returns to their acquisition whitethorn beryllium more humble than expected. If assemblage graduates progressively capable middle-income jobs that person not traditionally required a degree, galore will find it harder to gain backmost nan costs of their education.

Employers and policymakers ought to commencement taking grade ostentation much seriously. Fortunately, solutions exist: states tin driblet unnecessary grade requirements from authorities and licensed private-sector jobs, while nan national authorities tin pare backmost excessive subsidies for higher acquisition and support replacement intends of skills acquisition and assessment. Aspiring basking canine drivers everyplace will beryllium grateful.