On the surface, having a college degree might seem to make getting and keeping a job more difficult in the current employment environment. Armed with a college degree, most people would expect to earn more than someone without a college degree. When jobs appear scarce, the lower-cost worker would seem to have an easier time finding a job.
It's actually a different story, according to the U.S. Department of Labor's Bureau of Labor Statistics. In the U.S., the higher the level of education the lower the unemployment rate.
In a report issued this November, the Bureau of Labor Statistics said overall unemployment was 9 percent.
For those in the workforce 25 years and older, the aggregate unemployment rate decreases somewhat to 7.8 percent. Digging into the education levels of those unemployed and comprising this aggregate 7.8 percent provides support for the value of education in today's competitive environment.
The lowest reported unemployment rate is for those people with a bachelor's degree or higher, at only 4.4 percent. Unemployment among those with less than a high school diploma is reported to be 13.8 percent, or 6.0 percent more than the overall unemployment rate of 7.8 percent among this group. Although not quite double the unemployment rate among those 25 years and older, this difference is substantial.
As compared to those with college degrees, unemployment among those without a high school diploma is more than three times as high. On average it is reasonable to assume the firms employing those with college degrees are very likely paying more for those workers with degrees. Even though the high school graduate with no college may demand a lower compensation level, firms require skills generally developed through higher education. And firms are willing to pay more to those with these skills.
Among those who have some college education or an associate degree, unemployment is currently reported at 8.3 percent for those 25 years and older, almost twice the 4.4 percent for four-year college graduates.
While college may not be for everyone, the economic benefits when viewed in the context of having a job are evident. High school graduates with no college education are currently reporting unemployment at 9.6 percent.
In today's global economy where a widening variety of jobs can be outsourced to the most efficient labor providers, the value of incremental education becomes highly visible. With more and more emerging market countries joining the global economy, lower-skill jobs or more generic jobs are often candidates for lower-cost workers in geographies outside the U.S. Education remains a critical path to continued economic prosperity and stability.
Kirby Brown is the CEO of Beneficial Financial Group in Salt Lake City.
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