Americans with no more than a high school diploma have fallen so far behind college graduates in their economic lives that the earnings gap between college grads and everyone else has reached its widest point on record.
College graduates, on average, earned 56 percent more than high school grads in 2015, according to data compiled by the Economic Policy Institute. That was up from 51 percent in 1999 and is the largest such gap in EPI’s figures dating to 1973.
The pattern holds on Long Island as well. A Hofstra University study published last month showed that by age 29, Long Island millennials with a bachelor’s degree or higher averaged 90 percent more in annual earnings than their cohorts with just a high school diploma. The study of millennials aged 18 to 29, by Hofstra professor and economist Gregory DeFreitas, looked at census data from 2000 to 2014.
Since the Great Recession ended in 2009, college-educated workers have captured most of the new jobs and enjoyed pay gains. Non-college grads, by contrast, have faced dwindling job opportunities and an overall 3 percent decline in income, EPI’s data shows.
“The post-Great Recession economy has divided the country along a fault line demarcated by college education,” Anthony Carnevale, director of Georgetown University’s Center on Education and the Workforce, said in a report last year.
Compensation consultant Ted Turnasella of West Islip said the pay gap on Long Island has been widening for some time. He pointed to the formerly “very healthy, high-paying aerospace and defense economy,” whose workers and their children “have inherited an economy that just does not offer the same opportunities to high school graduates.”
And while people may point to a lower unemployment rate, he said, jobs in the service economy that many high school grads hold are not coming close to replacing the higher salaries of manufacturing.
As the disparity widens across the nation, it is doing so in ways that go beyond income, from homeownership to marriage to retirement.
Yet few experts think the solution is simply to send more students to four-year colleges. Many young people either don’t want to spend more time in school or aren’t prepared to do so. Already, four in every 10 college students drop out before graduating — often with debt loads they will struggle to repay without a degree.
While college graduates earn more, the recession and slow recovery have taken a toll on their earnings, the Hofstra study of Long Island millennials showed. The average 23-year-old Long Island college graduate in 2014 earned less than 80 percent of what a 23-year-old college graduate earned in 2000, adjusted for inflation, the study says.
With Carrie Mason-Draffen and Patricia Kitchen