Tanya Elena Balsky
One More Reason to Stay in School Forever
An article in Monday's LA Times points out one of many reasons I chose to get my Masters rather than face today's job market: "That Raise Might Take 4 Years to Earn as Well." The article highlights the fact that "Wage stagnation, long the bane of blue-collar workers, is now hitting people with bachelor's degrees for the first time in 30 years. Earnings for workers with four-year degrees fell 5.2% from 2000 to 2004 when adjusted for inflation, according to White House economists." and "The White House economists did not lay out wage trends for people with master's and other advanced degrees. But other studies have found that their inflation-adjusted wages were essentially flat between 2000 and 2004, and the studies have confirmed a decline for people with four-year degree."
Sadly, nothing else in the economy is adjusting to compensate for this. An article in the Grand Forks Herald in 2005 pointed out that economic decline isn't just because of stagnant wages, but also because the young suffer from "cuts in vital noncash benefits such as health insurance and retirement plans. This deterioration of earnings and vital support goes hand in hand with business practices that disadvantage rank-and-file workers: the weakening of unions and wage bargaining; outsourcing; corporate "re-engineering"; "two-tier" job classifications; and the rising exploitation of contracted part-time help." As a result, the number of young workers (aged 18-24) covered by employer-based insurance between 2000 and 2004 dropped by 8.4 percentage points. And not only is inflation driving costs up while wages drop or stay the same, (inflation between 2000 and 2004 was 8.13%), the average cost of that college education of diminishing returns is rising much faster than inflation. During President Bush's tenure, public university tuition and fees increased 57%.
Some facts that Tamara Draut points out in her book, Strapped, are that over 25 percent of college graduates in 2003 had student loan debt higher than $25,000, up from 7 percent in 1992-93. Meanwhile the average college senior in 2002 had six credit cards and an average balance of just over $3,200. Disturbingly "In 2002, 14 percent of young adults reported that student loans caused them to delay marriage, up from 7 percent in 1991. One in five said their debt has caused them to delay having children, up from 12 percent in 1991. Forty percent reported they delayed buying a home because of their loans, compared to 25 percent in 1991." Meanwhile, those in the upper echelons are making more than ever. In June, this post pointed out the staggering fact that American CEOs earn 262 times that of an average worker; entry level workers, even with college degrees, earn less than average.
Of course, none of this surprise me- the other day, The Washington Post pointed out that rent in the Washington, DC area has gone up 7% in the past year- my financial aid as a student in the DC area, needless to say, has not. And, just to reinforce the notion that wages are going down, the Georgetown Public Policy Institute publishes the mean salaries for jobs that its graduates accept (not adjusted for inflation)- and for the two biggest hiring sectors, government and non-profit, the mean salary dropped 10.6% and 6.6%, respectively, between 2003 and 2004.
Maybe it's time to get that PhD.