A Bachelors Degree: Still Enough Bang for Your Buck?

Is getting a degree still worth it?

For years the belief has been that getting a college degree will ensure that one will get a good job with a decent salary rumored to earn a graduate 1 million more than what someone who has only earned a high school diploma would make.  In this economy, graduates may not actually make 1 million more, but they are more likely to have a job.

Someone with a bachelor's degree may not make a million dollars more over a lifetime, but will make twice the median income of someone who with only a high school diploma and 25% more than someone with an associate's degree, according to the National Center for Education Statistics. The annual earnings of someone with a high school diploma have declined compared to the increase in earnings of men and women with a bachelor's degree.  The average salary for a person with a high school diploma in 2008 was around $31,300, an associate's degree was$ 39,500 and a bachelor's degree was $58,600 as reported in the US Census Bureau Current Population Survey.

These numbers don't take into account college loans or income tax deductions, however.  Many college graduates are in debt thousands of dollars, and they must pay off these loans with their salaries.

One thing a college degree does still ensure is having a job.  Historically, unemployment has been higher for those without a college degree, but the gap has widened for the recession starting in 2007 compared to the one in 2001.  In 2001 the unemployment rate increased at a fairly even rate for those of all levels of education, while there has been an average difference of 10 percent since 2007 between those with a bachelor's degree and those who have less education, as a study by Wells Fargo Securities (WTC) shows.

The Bureau of Labor Statistics reports similar findings.  The employment status for US households based on educational attainment shows a steady decrease in the unemployment rate as education increases.  Households with less than a high school diploma have an average rate around 14%, and those with a bachelor's degree have an average rate of 4.34%.

For graduates at UWL, according to the 2009-2010 Undergraduate Report, the entire graduating class in all colleges for that year had an average unemployment rate of 4.7% and an average starting salary of $36,145.  Employment rates and starting salaries vary by major, and not all graduates responded to the survey.  Nevertheless, Mike Haupert, a professor of Economics at UWL, says this is a normal percentage for unemployment due to a fluid labor market.  People change jobs and this percentage accounts for the time between jobs.

The low unemployment level for college graduates is due in part to need for education in 21^st century job positions.  The economy has become more knowledge-based, with companies wanting workers who will add value through their knowledge.  Half of the jobs added have been in professional and business services and education and health services industries, says John Silvia, the chief economist for WTC.