June 6, 2012
The Dow (INDEX: ^DJI ) plunged on Friday after May's dismal jobs report. But depending on a single factor, your situation is probably either much worse, or much better, than the headline numbers show.
There are two very different unemployment stories right now. One group of people is actually doing pretty well these days. For another group, we truly are in a depression.
The distinguishing factor? Education:
What gets me about this chart isn't just the difference between educational backgrounds, but the change among each group since 2007. Unemployment for those with a bachelor's degree is up less than 2 percentage points since the recession began in 2007. For those without a high school diploma, it's up more than three times that much -- 6 percentage points. Workers with a college education have been pinched over the last five years. Those without have really been walloped.
It's the same story for average weekly earnings. Those with a bachelor's degree have seen their weekly earnings rise nearly 25% in the last decade. For those with a high school diploma, wages have increased about 20%. If you don't have a high school diploma, your wages have increased just 18% over the last decade, on average. Not only do educated workers earn more, but the gap between what they earn compared with non-educated workers is widening. Fast.
I interviewed Mesirow Financial chief economist Diane Swonk last year, who said:
We peaked in educational attainment in this country in the 1970s, just at the very moment that we were yielding the industrial age to the information age, and paying a premium for ideas and education and higher levels of education rather than manual labor. As a result, the bottom 50% of wage earners started to stagnate in wages, while the top 90th percentile -- 10% -- had those graduate degrees [and] because they were short in supply, started to see their wages absolutely skyrocket.
Makes me wonder: What would happen if these numbers were plastered on billboards in high schools across the country? You tell me.