the more you learn the more you earn

The More You Learn The More You Earn

by Tim on February 28, 2012

A mentor of mine would always tell me “the more you learn, the more you earn.”  While I never really doubted his advice all that much, this proverb of his always made me wonder if it was true or not.  Most of us would agree that a college degree or professional degree will equip you for a better job and higher income, so the saying seemed like it was true, but I always like to have data to back things up.

Wouldn’t you know the U.S. Census Bureau just released a study that proves this saying to be true!  The two parts of the study that I found most interesting showed the increase in the number of people who attained degrees as well as the average earnings from each degree level.

The data, which was tracked since 1984, shows vocational certificates as having the highest surge in attainment with Associate’s degrees close by.  The number of people who have attained doctorate degrees nearly tripled since 1984.

Another positive point about this chart is that the percentage of people with less than a high school level of education dropped by half.

american degree by percentage

Earnings By Degree Level

Now for the meat and potatoes: how much does each degree earn on average?


The monthly wages for individuals who receive a bachelor’s degree is nearly 30% higher than people who don’t pursue further education past high school.

For those who obtain a master’s degree like an MBA, the average increase in pay compared to someone with just a bachelor’s degree is nearly 24% more!

income earned by degree

 Is the Master’s the new Bachelor’s?

Over 30% of the population over age 25 has at least a bachelor’s degree according to the Census report that considers the 2011 data.  It’s incredible how fast this figure is growing (it was less than 25% in 1998), but it raises a question we should be asking: Will the master’s degree be the new bachelor’s?  In other words, will a bachelor’s degree become so common that you’ll need a masters to set yourself apart?

Do you think that more people entering the workforce with a bachelor’s degree will force the competition to get a master’s or professional degree? What are your thought?

{ 10 comments… read them below or add one }

Thad P February 28, 2012

I think the biggest factor affecting employment in the next 1o years will be the retirement of the Baby Boomers. As they leave the workforce, there will be a huge number of job openings for those with the educational attainment to fit the openings.

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krantcents February 28, 2012

In some companies, industries and professions, a master’s degree is necessary. Yet others, it has no impact. For example, an engineer who wants to enter managment may want or even need an MBA.

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Corey @ Passive Income to Retire February 28, 2012

I recently heard that only 10% of the adult population have a master’s degree. I like the sound of that as I am finishing up my degree. It definitely won’t hurt you to have more school under your belt, but it could be a waste if you aren’t sure how you will use it.

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Jen @ Master the Art of Saving February 28, 2012

It sounds like something that could happen in the future. I know a ton of people with great degrees can’t find jobs now, unless things change, everybody might have to keep 1-upping each other.

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Jessica @ Budget for Health February 28, 2012

Unfortunately there are employers that don’t compensate for a masters any more than a bachelors degree- one of the dietitians at the hospital I work at has her masters but gets paid the same as the rest of us. What a slap in the face :/

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Shayna Abrams February 29, 2012

I absolutely do think that everyone will be eventually be forced to get higher education like masters and doctorates because there has to be a way to compete. Just like everything else we must continue to evolve in everything we do and that includes education.
However, I don’t necessarily think that the obligation to do this is a good thing. People should educate themselves according to their own interests and drives….not because they will get more money if they do.
Higher education costs a lot and there is never a guarantee that a good job is a secure possibility. The time is coming that instead of being given protocol that we must follow in order to be successful, we must use our own heads and our own emotions (which drive motivation) to become successful…..because too many young people are losing their earnings to the loans and interest that they have taken in order to get those earnings.

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Hector Avellaneda February 29, 2012

Sure, I think that would be a reasonable assumption to make for degrees int he future. Almost all of us are conditioned to believe that the only way to succeed in life is to go to college. (i.e. if you dont go to college you will be a failure and you will not succeed). So many kids today are going to college, graduating with serious student loan debt and then they cant find jobs. The one’s who do automatically take a pay cut because inorder for the employer to hire them, they have to pay thema smaller salary.

My question is, at what point does the ROI of a college education become a bad investment?

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Wealth Artisan March 2, 2012

Hey Tim!

Great figures! When it comes to getting a job, education will definitely be a huge help, but I do believe that a Masters will become the new bachelors (as far as requirements go). It’s all about supply and demand. We’ll eventually end up with an over supply of bachelors (which I think has already happened) then you’ll have people try for the masters. At that point, you’ll probably see a lot of people give up on school because they don’t want to get a masters, then you’ll see the number of masters and bachelors degrees drop.

Once the value of having a bachelors isn’t high enough, you’ll see these changes take place. I’ve met plenty of people wiping tables, and taking customer service calls with their bachelor’s degrees. What do you think they’ll be telling their kids about the value of a college education? I think that education is terribly important, whether at a documented institution, or independently. You might not experience the financial gains immediately of self-education, but many of the same benefits are still there.

One thing that people need to remember is that experience trumps education. Education helps you get your foot in the door in the beginning, but your experience and portfolio will carry you after that. Obviously, it’s a bit different when the education is required like practicing law, or CPAs, but you know what I mean. :-)

Thanks,
Timothy

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The Mayor of Humbleville March 2, 2012

I earned my Bachelor’s degree, and although I’m not necessarily using the degree itself to get a job, I am using the knowledge I acquired to operate Humbleville and my Christian Greeting Card Business, HumbleShop. Education is definitely expensive out-of-pocket, but there are many financial aid’s available other than loans such as grants and scholarships.

These are hard to earn, but if you try really hard, and put in the effort they can be attained. I was happy to receive a 75% scholarship for my full bachelors degree. Education is definitely important, but I want people to know there are options out there. They might be hard to achieve, but as I get older, I notice that not much in this life is easy.

To anyone who might be on the fence, consider your options fully and carefully. If you have a scholarship, or grants available to you, then go to school. Pursue a degree you’re passionate about, and even if you don’t use it, you have it as a backup. I’m doing what I love (running my website, and running my card business), but I know that I have my Bachelors of Business with Minors in Economics & Marketing as a safety net. As I said, I’m still using the knowledge, just not necessarily the piece of paper that says I did it.

Humbly Yours,
Humble Laura

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caleb April 13, 2012

I have a BA and MA in Biblical studies and working on the MDiv. For ministry, it is necessary or almost necessary for most churches, depending upon the specific job and denomination. A BA is generally OK for youth, but not lead pastor.

I currently work in a non-ministry job, but the skills I learned (research, writing, leadership, reading people, communication, teaching, etc) have been invaluable in all other jobs and really most everything I do.

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