Kevin Drum smartly extends my post the worth of a college degree and argues, convincingly, that a college degree is worth more not primarily because your earning power is higher, but because a high school degree is worth so much less. As he notes, adjusted for inflation, in 1973, a high school grad made $42,000 and a college grad made $55,000 -- a college degree increased a high school graduate's salary by 30 percent. Today, a high school graduate makes $31,000 and a college graduate makes $61,000. That's almost a 100 percent differential. As Kevin concludes, "the skill premium hasn't gone up because a college degree is way more lucrative than in the past. In fact, it's only slightly more lucrative over the long term and completely stagnant among recent grads. Rather, the skill premium has gone up because the value of a high school degree has cratered." Now, a caveat: The universe of high school graduates was different in 1970 than it is in 2000. If you look at college enrollment as a percentage of all 18-to-24-year-olds, in 1970, enrollment was about 25 percent, while by 2006, it was 37 percent. This means that the pool of high school graduates are becoming somewhat more disadvantaged and the pool of college graduates becoming somewhat less elite, so you'd expect incomes for high school graduates to drop some and college graduates to slow their ascent. But the change in incomes is much steeper than the change in enrollment. And a $6,000 increase for college graduates over a period of 36 years is no great shakes. So I stick with my original conclusion: It's not a good time to be a college graduate, but it's an unbelievably terrible time to be a high scholl graduate.
