Going to college is downright dangerous if you're not going into a professional license-controlled field (like law or medicine).
All of our statistics show that college grads earn more than non-college grads, but they don't tell you the details of that stat.
If you take 4 years of college, and you take a highschool grad who starts working immediately, the life-time earnings of a college grad will be larger than that of a highschool grad. However, by definition, the rate of yearly earnings changes, so there is a period of time where the highschool grand out-earns the college grad because the college grad is still in college.
So for example: After 1 year out of highschool, say by Age 19: the highchooler nets $28 k, and then the college grad nets $0. After 2 years, the highschooler nets 29 k, and the college grad $0. That's total earnings of : ($59k : $0k)
We get a table that looks something like this, the values are notional:
Age 19 - $28k : $0k | TE - $29k : $0k
Age 20 - $29k : $0k | TE - $59k : $0k
Age 21 - $30k : $0k | TE - $87k : $0k
Age 22 - $31k : $0k | TE - $118k : $0k
Age 23 - $32k : $32k | TE - $150k : $32k
...
Age 51 - $60k : $88k | TE - $1.452m : $1.740m (let us assume peak earning years)
...
Age 65 - $58k : $84k | TE - $2.277m : $2.942k (end of working life)
Obviously, from the table, there should be a point where the life-time net earnings of the college grad out-earn that of the highschooler. Something like this data point:
Age 38 - $47k : $62k | TE - $750k : $752k
The financial logic here is that even the cost of the total student loan debt, which may be as high as $80k for a 4 year degree, can absolutely be offset by the large increase in life-time earnings. Especially if those total earnings are closer to $500k and up. Overall, it's a good benefit.
But all of this data is based on earlier generations, where that was true. These calculations take in college students got out of college and walked into a middle management job. It was also a time when blue-collar work, even when skilled, wasn't going to make you $80k a year. And when it was true, that age of cross-over point, where the the total earnings of the college grad surpassed the highschooler... was at the age of 40.
By taking 4 years of work experience out of your life, it took you 19 years to catch up, assuming the highschooler NEVER pursues a degree later in life. That's a fucking dangerous investment, but the only reason it works is if the life-time earnings completely out-weight that delay, by $500k.
HOWEVER, that's even later than my example data where the college grad has the same yearly income out of college as the highschool does after 4 years of work experience. Worse, my example assumes the college grad gets an increase in pay of $2k every year, whereas the highschooler gets only an increase of $1k a year. In previous eras, it was safe to ASSUME that that would be true, the college grad gets into management earlier, he gets to protect his higher value income longer into life, his job options are more competitive, and he can walk out of college with a job. Hell, there was once upon a time in the land of boomer-ville, where a college grad would have a higher starting salary than a highschool grad with 4 years of work experience.
Now, let's be more realistic to our era! Let's say :
The college grad gets the same job as the highschooler did, because they are both entering the workforce with 0 years of work experience.
The college grad needs a year off to "find himself"
The highschooler follows a technical career path: The highschooler focuses on a technical skill after 10 working years, where he increases by $2k a year. (Tier 2 skillset) After another 10 working years, he's getting $3k a year. (Tier 3 skill set)
The college grad goes into a managerial career path, where he gets into a safe salary job which increases his pay $15k every 5 years, but he only gets to that point after the first 10 years of his working life.
As before, they will both stop increasing thier earnings at Age 56, and will remain constant for five years, after 5 years they will lose $1k in annual salary.
Now what do our table look like:
Age 19 - $28k - $00k | TE - $00k : $00k
Age 20 - $29k - $00k | TE - $57k : $00k
Age 21 - $30k - $00k | TE - $87k : $00k
Age 22 - $31k - $00k | TE - $118k : $00k
Age 23 - $32k - $00k | TE - $183k : $00k (CG "finds himself" for a year)
Age 29 - $38k - $33k | TE - $363k : $183k (HG begins Tier 2)
Age 35 - $50k - $53k | TE - $633k : $416k (CG gets first managerial promotion)
Age 39 - $58k - $53k | TE - $853k : $628k (HG begins Tier 3)
Age 40 - $61k - $68k | TE - $914k : $696k (CG gets middle managerial promotion)
Age 45 - $76k - $83k | TE - $1.264m : $1.051m (CG gets upper-middle managerial promotion
Age 50 - $91k - $98k | TE - $1.689m : $1.579m (CG gets upper managerial promotion
Age 51 - $94k - $98k | TE - $1.783m : $1.579m (Peak Earnings reached)
Age 65 - $92k - $96k | TE - $3.084m : $2.936 (End of Earnings)
There is no crossing point. The college grad never out-earns the highschool grad. What we're looking at is that the middle managerial elite come out slightly worse than anyone driving themselves forwards in work experience alone. This is why they have to use protectionism, regulation, and racketeering to keep skilled labor from out-earning and out-competing them. Our generation has been completely fucked by going to college, and it didn't really help that much in the first place. Worse, the person who comes out of college is not going to be the type of person who's going to easily push up the corporate ranks every five years with his innovative thinking and strategy. Instead, they are going to be useless pets and golden handcuff slaves who just diddy-bop around until another corporate overlord takes pitty on them. The fall in their wages is going to be more serious, and much earlier, and might precipitate a change of careers.
The person with income 4 years earlier as higher potential investment income, which is ignored because this is "earnings" not net worth. I don't think I've ever seen one of these analyses factor that in.
I'm making the calculations as simple as I can to explain why college might not be being taken up, given the lack of real profit off of the investment.
In the other direction, this is assuming that no one has any kind of income while attending college.
We could add that in, but we're still talking quite small amounts. $10k-$15k a year I suppose.
Going to college is downright dangerous if you're not going into a professional license-controlled field (like law or medicine).
All of our statistics show that college grads earn more than non-college grads, but they don't tell you the details of that stat.
If you take 4 years of college, and you take a highschool grad who starts working immediately, the life-time earnings of a college grad will be larger than that of a highschool grad. However, by definition, the rate of yearly earnings changes, so there is a period of time where the highschool grand out-earns the college grad because the college grad is still in college.
So for example: After 1 year out of highschool, say by Age 19: the highchooler nets $28 k, and then the college grad nets $0. After 2 years, the highschooler nets 29 k, and the college grad $0. That's total earnings of : ($59k : $0k)
We get a table that looks something like this, the values are notional:
Obviously, from the table, there should be a point where the life-time net earnings of the college grad out-earn that of the highschooler. Something like this data point:
The financial logic here is that even the cost of the total student loan debt, which may be as high as $80k for a 4 year degree, can absolutely be offset by the large increase in life-time earnings. Especially if those total earnings are closer to $500k and up. Overall, it's a good benefit.
But all of this data is based on earlier generations, where that was true. These calculations take in college students got out of college and walked into a middle management job. It was also a time when blue-collar work, even when skilled, wasn't going to make you $80k a year. And when it was true, that age of cross-over point, where the the total earnings of the college grad surpassed the highschooler... was at the age of 40.
By taking 4 years of work experience out of your life, it took you 19 years to catch up, assuming the highschooler NEVER pursues a degree later in life. That's a fucking dangerous investment, but the only reason it works is if the life-time earnings completely out-weight that delay, by $500k.
HOWEVER, that's even later than my example data where the college grad has the same yearly income out of college as the highschool does after 4 years of work experience. Worse, my example assumes the college grad gets an increase in pay of $2k every year, whereas the highschooler gets only an increase of $1k a year. In previous eras, it was safe to ASSUME that that would be true, the college grad gets into management earlier, he gets to protect his higher value income longer into life, his job options are more competitive, and he can walk out of college with a job. Hell, there was once upon a time in the land of boomer-ville, where a college grad would have a higher starting salary than a highschool grad with 4 years of work experience.
Now, let's be more realistic to our era! Let's say :
Now what do our table look like:
There is no crossing point. The college grad never out-earns the highschool grad. What we're looking at is that the middle managerial elite come out slightly worse than anyone driving themselves forwards in work experience alone. This is why they have to use protectionism, regulation, and racketeering to keep skilled labor from out-earning and out-competing them. Our generation has been completely fucked by going to college, and it didn't really help that much in the first place. Worse, the person who comes out of college is not going to be the type of person who's going to easily push up the corporate ranks every five years with his innovative thinking and strategy. Instead, they are going to be useless pets and golden handcuff slaves who just diddy-bop around until another corporate overlord takes pitty on them. The fall in their wages is going to be more serious, and much earlier, and might precipitate a change of careers.
That's not necessarily true. Typically the highschool grad doesn't need to do permanent damage to excel at a niche skill.
I'm making the calculations as simple as I can to explain why college might not be being taken up, given the lack of real profit off of the investment.
We could add that in, but we're still talking quite small amounts. $10k-$15k a year I suppose.