Economic Snapshot | Wages, Incomes, and Wealth

Investing in Education Is the Path to State Prosperity: States With Highly Educated Workforces Have Higher Wages and Stronger Economies

States with highly educated workers have substantially higher median wages than those with less educational attainment (as measured by the share of the workforce with a bachelor’s degree or more education).   The figure below shows states with the most highly educated workforces—New Jersey, Maryland, Connecticut, and Massachusetts—have the highest median wages, while most states with the least-educated workforces—notably Arkansas, Nevada, Louisiana, and Mississippi—have comparatively very low wages. There are no states with a relatively highly educated workforce and relatively low wages and virtually no states with lower levels of education and relatively high wages.

This strong correlation between the educational attainment of a state’s workforce and median wages in the state is an important consideration for states as they determine how to allocate scarce resources.  State revenues have been recovering from the recession, but that process has been weak and slow. The lesson of the relationship between educational attainment and median incomes is that investing in education is the path to state prosperity over the medium and longer-term. Through adequately funded programs for early care and education, quality K-12 education (with particular attention paid to redressing disparities in educational achievement based on race and ethnicity), and a range of post-secondary educational opportunities (with adequate need-based financial assistance), states lay the foundation for future economic success. These states will spur long-term growth by creating better-educated workforces if they also create more jobs that pay higher salaries and require greater education. States that cut investments in education do so at the expense of their long-term prosperity. It’s also true that the wages of most workers, including college educated workers, have been flat for a decade. While investing in education is key for states it’s not a magic bullet for wage growth. To learn more about the relationship between the educational attainment of a state’s workforce and median wages in the state, read A Well-Educated Workforce Is Key to State Prosperity, a recent report published by EPI for the Economic Analysis and Research Network (EARN).

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