College degrees pay off even during recession, new study shows
Pew study shows college grads had lower unemployment rate than their counterparts.
LANSING — A four-year college degree is still worth paying for — even during recession years, a recent study shows.
The Pew Charitable Trust concluded that during the recession, recent college grads had a lower unemployment rate than their counterparts with only high school diplomas or associate’s degrees, and the reason was largely not because they took pay cuts or accepted jobs they were overqualified for.
“It’s indisputable that a full college education puts people at a better economic standing,” said Rep. Sean McCann, D-Kalamazoo, a member of the House Higher Education Appropriations Subcommittee.
The national study shows that although bachelor’s degree holders experienced a 7 percent decline in employment, a 5 percent decline in wages and a 3 percent decline in the number working in college-level jobs during the recession, they were still much better protected than their less-educated counterparts.
“This shows that we really need to continue to invest in higher education and all education as a public good and as a way to increase prosperity,” McCann said.
Those who held just a high school diploma saw a 16 percent decline in employment and a 10 percent decline in wages, accompanied by a 6 percent decline in college-level jobs, according to the study.
Associate’s degree holders had the same decline in college-level jobs, but a 12 percent decrease in wages and an 11 percent drop in employment.
Provost Gayle Davis of Grand Valley State University said the Pew study “rang true.”
She said one reason college degrees are valuable is that graduates acquire skills — such as leadership, teamwork, creativity and innovation — that are important across a wide range of jobs and make it easier to be flexible when looking for a job.
The Business Leaders of Michigan and the President’s Council, State Universities of Michigan, cite data similar to the Pew study to support their call for the Legislature to increase funding to public universities by $100 million annually for the next 10 years, a total of $1 billion.
Rep. Al Pscholka, R-Stevensville, has introduced a bill to appropriate $100 million for the 15 public universities, but on the condition that they don’t renegotiate labor contracts with their unions to avoid the March 28 effective date of Michigan’s new right-to-work law.
While the Pew study supports the economic worth of a college degree, the amount of state aid to universities has declined since the 1970s. In 1972, appropriations provided 75 percent of public universities’ budgets, but only 22 percent in 2011, according to the President’s Council.
Michael Boulus, executive director of the Presidents Council, said that most critics who question the value of a degree, including those at the Mackinac Center for Public Policy, have master’s degrees or higher and probably wouldn’t allow their children to skip college.
Ted O’Neil, media relations manager for the Mackinac Center, a Midland-based free market-oriented think tank, said, Boulus “must have misunderstood or misread. We’ve written stuff about how government subsidies drive up the cost of attending a state university, not about the actual value of a degree.”
Jarrett Skorup, a Mackinac Center research associate, recently posted the articles in question.
Skorup questioned the value of a degree by questioning the correlation with higher earnings. “This is an example of ‘the cart pulling the horse’ — that is, people who graduate from college are already capable of great wealth before they actually get a degree,” he wrote in “College Subsidies Redistribute from Poor to Rich.”
Grand Valley’s Davis said many headlines describing college as being worth it or not are “based on if a person can get a job the day after graduation,” but that’s not a fair assessment because college is a long-term investment and graduates might get a college-level job a year after graduating.
The Pew study also showed that employment and wages for four-year grads stabilized more quickly than for other groups after the recession.
In addition, the study contradicted claims that more people were continuing their education when they couldn’t get jobs during the recession, saying that enrollments for all groups declined slightly during and after the recession.