Former Federal Reserve Chairman Alan Greenspan recently created a stir when he talked about the education gap that exists between Baby Boomers and those born afterwards, "Generation X."
Greenspan called Baby Boomers "the most productive, highly skilled, educated part of our labor force" and continued by saying, "They are being replaced by groups of young workers who have regrettably scored rather poorly in international educational match-ups over the last two decades."
There was some debate as to whether Greenspan was blaming younger workers for their economic plight in the Great Recession. Lost in such a discussion is what we really need to understand about the link between education and the economy.
No matter how you cut it, more education pays. A new study by the Georgetown University Center on Education and the Workforce shows that going to college and earning at least a two-year degree generates a sizable economic return.
The Georgetown researchers, led by noted labor expert Anthony Carnevale, examined lifetime earnings by education level for 300 distinct occupations. These numbers prove that higher education opens up the highest-paying jobs. Not surprising, perhaps, but here's the kicker: The same research shows that there is a range of pay within jobs that can only be explained by the education level of the worker. In other words, more highly educated people usually earn considerably more than their less-educated counterparts in the same occupation.
For instance, elementary and middle school teachers with a bachelor's degree make $1.8 million over a lifetime, compared with $2.2 million for those with a master's degree. An accountant with a high school diploma will make about $1.5 million, compared with an accountant with a bachelor's degree, who will make $2.4 million over a lifetime. Again, we are talking about people who are doing the same job.
The 33% of bachelor's degree holders who go on to graduate and professional schools have even more prosperous futures. Moreover, the difference in earnings between those who go to college and those who don't is growing -- meaning that postsecondary education is more important than ever.
Those who choose to ignore Greenspan's insights or see his comments as an effort to "blame the unemployed" are missing the point. Carnevale and his colleagues estimate that 63% of all jobs by 2018 will require some form of postsecondary degree or training.
The floodwaters are rising, and education is the best protection. It's our time to decide if we want to become victims or build an ark.
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