Economic snapshot | Wages Incomes and Wealth

The 10-year decline in wages for most college graduates

As the new State of Working America shows, the last 10 years have been a lost decade for income, wealth and wage growth for most Americans. Perhaps a surprising part of this picture is that the trend of stagnant or falling wages for most workers includes the wages of college graduates. In fact, real hourly wages have declined for the bottom 70 percent of the college-educated workforce since 2000, as shown in the graph below. The graph presents the cumulative change in real wages of college graduates at the 20th, 50th, 70th, and 90th percentiles in wages. Perhaps more astonishing is that wages of college graduates at the 90th percentile were lower in 2011 than in 2002 (roughly the start of the last recovery). These trends suggest that, since 2000, the vast majority of college graduates have not benefited from globalization, technological change, or simply even economic growth.

The disappointing wage trends for college graduates are sometimes obscured in various analyses because of a focus on all college graduates (combining those with advanced degrees and those with terminal four-year degrees), or on relative wages (the ratio of wages of college graduates to those of non-college graduates), rather than absolute wages. However, the real wages of most college graduates, the 21.9 percent of the workforce with a bachelor’s degree but no further education, have not grown since 2000. The wages of young college graduates have fared even worse.

It remains true that college graduates fare far better in the labor market (employment, wages, benefits) than those with a high school degree. Nevertheless, obtaining a college degree no longer guarantees a rising standard of living.

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