Chapter 14 - Education
What Is The Relationship Between Education and Money?
Here’s the fact, pure and simple—more education means more money and opportunity in the United States. Typically, the higher your education the higher your economic status, power, prestige, and levels of property. Socio-Economic Status (SES) is a combination of one's education, occupation, and income and has been found to be highly correlated with a better quality of life for those in society who have higher SES scores. There is more job stability (less unemployment and more pay) for those with higher educations. In Figure 1 below you can see data extracted from the US Census Bureau on this.
Figure 1. Census Data Shows that More Education Means Less Unemployment and Higher Wages in 2008*Retrieved from Bureau of Labor Statistics Internet 11 June 2014 from SOURCE
High school dropouts are more than 4 times more likely to be unemployed than doctoral (Ph.D., Ed.D., MD, or JD) graduates. Four-year graduates (Bachelor’s Degree) make $457 more per week than high school grads. That’s $1,828 per month or $21,936 per year more for Bachelor’s grads. This pattern holds true among all US racial groups and among males and females.
A recently published E-article articulated the many benefits of college graduation (see "Education Pays: The Benefits of Higher Education for Individuals and Society" by Sandy Baum and Jennifer Ma; in Trends in Higher Education Series 2007 Taken form Internet on 23 March 2009 from SOURCE ). Baum and Ma also pointed out that the higher your education the better your medical insurance, health, lifestyle for family and next generation, contribution to society, and more. Education, especially earning degrees, is a doorway to many life-long payoffs to college graduates.
You need education because we live in a credentialed society. Credentialed Societies are societies which use diplomas or degrees to determine who is eligible for a job. The key in the US is to graduate every chance you get: a Certificate=1-year post high school; an Associates=2-year degree; a Bachelor’s=4-year degree; a Masters=another 2-year degree post Bachelor’s; and a Doctorate=another 4-6 years past Bachelor’s degree.
Look at Figure 2 below to see the relationship between higher education levels and the "American dream" or "Ideal" lifestyle. Education is the great equalizer and allows the tradition of college attendance and graduation to be introduced into any individual’s personal and family life experience if they so desire and can muster the personal work and commitment along with the resources needed to attend then graduate. Tens of millions in the US have zero, nada, or no medical or health care coverage. Most of them have lower education levels and little to no college education. The extremely poor and disabled may have limited government coverage, but most poor and near poor have no medical insurance.
Figure 2: How People Get the Best US Jobs© 2009 Ron J. Hammond, Ph.D.
For the most part, working class and middle class people have some level of medical insurance. Interested in a job or career with yearly salary and not hourly pay? Interested in medical benefits and year-end bonuses with paid time off and vacations? Then you need at least a Bachelor’s, Masters or Doctoral degree. Or you may be from the top 10-25 percent of our economic strata that are born into privilege. They get the educational levels, social networking, marriage market, and overall better life chances that only money can buy, including exclusive education, prep-school, admittance into competitive programs, and Ivy League launch pads.
Remember Max Weber’s concept of life chances? Life Chances are an individual’s access to basic opportunities and resources in the marketplace. The very few in our society born into extreme wealth have enormous life chances when compared to the rest of us. Can you run for political office without the proper social connections among the country’s power elite? Probably not. Can you become famous or extremely successful without access to extremely well educated friends and associates who are connected to those corporate owners and board members? Probably not. Can you call a friend and get a huge favor for your children with the understanding that someday you will reciprocate back with a huge favor for their children? Probably not, especially if you were born into an average family.
You may not be able to change your ascribed status of having been born poor or middle class, but you can definitely change the SES of your own family by choosing to attend and graduate from college. You see, compared to most people outside the US, you and I have it better. You even have it better today than most royalty from just 100 years ago. Look at Figure 3 below to compare your average US life today to the life of European royalty back then.
Our Standard of Living
Figure 3. How European Royalty Lived Back Then.© 2009 Ron J. Hammond, Ph.D.
Have you ever toured a medieval castle? Their best accommodations were far better than the average person of their time, but way sub-par in comparison to the average person in our time. You grew up with central heat, running water, electricity, basic health knowledge and medical care, opportunities for 12-13 years of public education that cost you nothing (although your parents paid taxes), all the electronic gadgets you can buy, extra money to save or invest, and a life expectancy that very few royalty dreamed possible hundreds of years ago. Sure, they could control their subjects and servants, even take their lives if they so desired; but, today you can control your personal choices at the personal level and dramatically impact your own and some of your family member’s life course as you see fit.
Take for example one of my students from my Social Problems class back in 1996. To illustrate the personal level of stratification, I was interviewing the students in the class to see how much education and income their parents had, what their own majors were, and how much income they could anticipate after graduation. This way we could estimate their mobility between generations. For the most part my students were from working class backgrounds except one who had a medical doctor for a mother and a banker for a father. Her parents’ income was $2 million higher per year than all the other students.
The very last student in the class, "Julie" was from a family of 9. Her father was a disabled Vietnam War vet who could not hold a job and who had asked a war buddy to let him, his wife, and their 7 children live in his barn. They had only one extension cord, one garden hose, and a port-a-potty. She said she came to our college to become a school teacher and have a steady full-time job with medical benefits. She generously explained how happy she was to have 5 roommates in an apartment.
"I’ll never take another garden hose cold shower if I can help it. Did you know my apartment has 2 bathrooms with tubs and toilets in each? We’ve got a dishwasher, fridge, and electric oven, too." She had the entire class’ attention by now. "Yep, I’ll be a school teacher and when I do I'll help my brothers and sisters go to college…"
Interesting isn’t it? We often take for granted all the luxuries and comforts we have in our modern society and yet, sometimes right next door there are people who don’t have what we have. Julie did graduate and become a school teacher. I have since lost contact with her, but I’m sure she’s settled down and is helping her siblings through college. The point is that she, like all of us, can choose higher education, to graduate, and to acquire for ourselves a larger piece of the American Dream of a comfortable lifestyle and job security. We do this through education.
In Sociology we measure two distinct types of educational accomplishments: Educational Attainment is the number of years of school completed and Educational Achievement refers to how much the student has learned in terms of reading, writing, and arithmetic. Look at Table 1 to see how attainment typically correlates with degrees.
Table 1: Years of Schooling and Typical Degrees Associated with Them*
|below 12||Drop out|
|20||Doctorate (Ph.D.; Ed.D. ; JD,; or MD)|
|21 plus||Specialization or Post-doctoral education|
Figure 4 also shows the levels of income typically associated with these typical degrees in 2011. The difference between high school dropouts and graduates is about $8,100/year more for graduates or on a 35-year career in the labor force at least $283,500 more money earned by graduates. What would a 4-year Bachelor’s degree add per year? $19,400 per year for Bachelor’s grads compared to high school grads or $679,000 in 35 years of career work. A 4-year degree is financially well worth it.
Figure 4: Degrees and Median Incomes Associated with Them*.
When students ask me how I feel about taking out student loans I explain the following to them. If you choose to go to college and forfeit full-time wages to become a full-time student you will lose about $126,000 of lost wages while in college. Plus it might cost you another $25,000 in student loans or expenses. So you could conclude that it cost you about $151,000 to earn a 4-year degree. Subtract that $151,000 from the extra $697,000 and you end up a $546,000 net increase in career earnings even accounting for missed wages and student loan expenses. So going to college pays, but how does dropping out of high school affect individuals and society?
The worst possible scenario in terms of work and lifestyle is to drop out of high school. And millions drop out each year in the US. Table 2 shows the dropout rates by racial classification for the US. In 2010-2011 for the total of all combined racial groups the overall dropout rate was 21 percent. By far, Asian/Pacific Islander Americans dropped out the least at only 13 percent, followed closely by Whites at 16 percent. Hispanics (29%), the economically disadvantaged (30%); Black/African American (33%); American Indian/Native American (35%); students with disabilities (41%); then students who have limited English speaking proficiency (43%) had the worst dropout rates—all that income lost; all that lifestyle forfeit; and all those other benefits of higher education missed.
Table 2: Dropout Rates by Racial Classification in the United States 2010-2011*
|Group||Percent Dropout (not graduated in cohort)|
|Black (African Am.)||33%|
|AM. Indian (Native Am.)||35%|
|Students with Disabilities||41%|
|Limited English Proficiency||43%|
Stetser, M., and Stillwell, R. (2014). Public High School Four-Year On-Time Graduation Rates and Event Dropout Rates: School Years 2010–11 and 2011–12. First Look (NCES 2014-391). U.S. Department of Education. Washington, DC: National Center for Education Statistics. Retrieved 11 June 2014 SOURCE
Jason Amos (2008) in his study of US dropouts also stated that:
"Individuals who fail to earn a high school diploma are at a great disadvantage, and not only when it comes to finding good-paying jobs. They are also generally less healthy and die earlier, are more likely to become parents when very young, are more at risk of tangling with the criminal justice system, and are more likely to need social welfare assistance. Even more tragic, their children are more likely to become high school dropouts themselves, as are their children’s children, and so on, in a possibly endless cycle of poverty (page 7)."
Truly this is an accurate statement. The US has some of the best educational opportunities for average children to acquire a good public education. But, it lacks cultural motivations that translate across racial and ethnic lines in such a way that education become valued and pursued by average children as a way of opening doors and improving life chances for themselves and their families. It is a paradox in the context of Weber’s life chances, because so many life chances are readily available to average people. Yet, they are refused or ignored by millions.
Amos (2008) also pointed out that high school dropouts from the Class of 2008 will lose $318,000,000,000 in lost lifetime earnings. They will be more likely to be arrested and use welfare for another combined cost of $25,000,000,000 to local and state agencies (page 8). The billions of lost earnings and judicial and welfare costs translate to a lower collective standard of living that could be corrected and improved upon if dropouts would graduate or even go back to earn their high school equivalency diploma GED.
Table 3 identifies the best nine and worst six states for dropout rates in 2010-2011. Iowa was the state leader with only 12 percent of its students dropping out, followed by Vermont and Wisconsin. The District of Columbia had the highest dropouts, followed by Nevada, New Mexico, Georgia, Alaska and Oregon, Florida, Louisiana, then Alabama. If you are considering employment in some of these states, you might want to check out the dropout and or graduation rates the states and for specific school districts within that state. For those who stay in school, there becomes an issue of quality of education. I know it is relatively difficult to define what "quality of education" even means, much less which states or schools get the best quality.
Table 3. Best Nine and Worst Six US State’s Dropout Rates 2010-2011*
|State/Rank out of 50||Percent Dropout (not graduated in cohort)|
|< break in the list >|
|District of Columbia/50th||41%|
Stetser, M., and Stillwell, R. (2014). Public High School Four-Year On-Time Graduation Rates and Event Dropout Rates: School Years 2010–11 and 2011–12. First Look (NCES 2014-391). U.S. Department of Education. Washington, DC:
National Center for Education Statistics. Retrieved 11 June 2014 SOURCE
It’s a real challenge given that the US spent about $638 billion on public education in 2009-2010 of which only 53 percent went toward instructional expenses while the remaining 47 percent went toward administration, maintenance, and other related expenses (retrieved 11 June 2014 from http://nces.ed.gov/fastfacts/display.asp?id=66 Fast Facts: Expenditures SOURCE: U.S. Department of Education, National Center for Education Statistics. (2013). The Condition of Education 2013 (NCES 2013-037), Public School Expenditures and SOURCE ).
We can approach quality of education at the personal level. One thing you can try to avoid at your own educational personal level is what is called Bureaucratic Ritualism, or the habit of following the rules and procedures and forgetting the main purpose of the bureaucracy's mission. So often teachers, schools, and school districts become large and they end up trying to meet the needs of 10's of thousands of diverse students and do so fairly.
This inevitably leads to what educational leaders call Transparency - the creation of rules, regulations, and guidelines to be followed by all students, teachers, and parents. Transparency is a bureaucratic effort to be open, fair, and legally protected. It also creates a culture of a bureaucracy rather than a culture of learning. Students come to feel like a number and not an individual. Students get bored, disheartened, and fall into the daily routines and become somewhat a part of the bureaucracy. This is bureaucratic ritualism and it can be fatal to learning and creativity.
Table 4 below shows the best three and worst three state’s per pupil total spending as reported for fiscal year 2010. Alaska had the highest with $24,244, followed by District of Columbia (18,667, then New York $17,583 per pupil. As is often the case, Utah had the worst with only $6,515, followed by Oklahoma $8,279, then Arizona with $8,309 per pupil
Table 4. Best Three and Worst Three US State Per Pupil Spending Fiscal Year 2010*
|State/Rank out of 50||$ Per Pupil Spent in 2010|
|District of Columbia/2nd $18,667|
|New York/3rd $17,583|
|<break in the list>|
Cornman, S.Q. (2013). Revenues and Expenditures for Public Elementary and Secondary School Districts: School Year 2009–10 (Fiscal Year 2010) (NCES 2013-307). Tables 2 and C-1. National Center for Education Statistics, Institute of Education Sciences, U.S. Department of Education. Washington, DC. Retrieved 11 June 2014 SOURCE
One major effort and reforming and transforming US public education has been the Charter School Movement. Since the early 1990s charter schools have become more and more popular existing in 42 of the 50 US states (See Rebarber and Zgainer (2014) Survey of America’s Charter Schools 2014 retrieved 11 June 2014 from SOURCE ). In 2012 there were over 6,000 charter schools that served a higher proportion of: economically disadvantaged, non-White; and Hispanic students in comparison to public schools. The single most common theme of these charter schools remains college preparation (30% of all charter schools).
One final note on US education, US students do not always perform as well as students from countries that are economically similar to itself. One recent study reported that 16 out of 22 other nations out-performed the US on basic high school performance measures. The report also highlighted Finland which tends to out-perform students from all other countries. The article explained that Finnish students don’t start school until age 7;are given the exact same curriculum nationwide; are only taught by teachers who’ve earned a Master’s degree; and also provide free college to all who want it (Retrieved 11 June 2014 from SOURCE Global Grade: How do U.S. students compare?
What Can You Do To Succeed?
As we get closure on the discussion of education we have to focus on the personal level efforts you make toward graduation. Please note there is a Study Skills and Stuff chapter for you online with this textbook. It has guidelines for helping you increase your own odds of graduating college with a 4-year degree. These guidelines should be helpful in addition to that chapter:
- See your academic advisor
- Pick a major as soon as possible and set specific goals to graduate
- Attend all classes most of the time
- Ask any question you have (even if it sounds dumb because this is your education and you pay for it which allows you to ask questions)
- Learn to love: learning, gaining new information, and insights
- Visit all your professors during their office hours and get to know how they succeeded in college
- Go to on and off-campus events
- Make a good friend
- Volunteer and do something good for others and tell your parents what you did
- Manage your time, and money as though it were priceless
The Economy In Society
We’ve spoken about how important education is to you and your career and even how important it is to our national economy. Let’s discuss a few concepts about the economy. Economy is a system of producing and distributing goods and services and can be local, state, national, international, and global. There are various types of economic systems in today’s global marketplace. Capitalism is an economy based on the amount of goods and services produced in a free trade setting. Socialism is an economy based on governmental management and control of goods and services.
Communism is an extreme socialistic economy with extreme governmental management of goods and services along with management of public and private ideologies. Cuba, Venezuela, North Korea and China are a few remaining national-level communistic economies. However, China has become the most open capitalistic economic systems among the remaining communistic countries. There are communist parties in many countries today, but few have national control, as do the four above or the many that existed during the Cold War.
Recently many have criticized the US as having forfeited its capitalistic ideals in favor of a form of Democratic Socialism, or an economic system based on the merger of capitalism and socialism that often is accompanied by vague boundaries between governmental management of goods and services and diminished "hands-off" governmental involvement in the individual pursuit of economic stability.
Adam Smith (1723-1790) was an eccentric professor who wrote in The Wealth of Nations that an "invisible hand" emerged when people pursued their own business interest and collectively benefitted society at large. The full impact of Adam Smith’s work is hard to estimate. He is considered to be one of the most intellectually potent thinkers of the last four centuries. His ideas have been taught and have guided national economic policy for decades.
Today’s economy is far different from that of Adam Smith’s. In Adam Smith’s day, much work was located in the Primary sector of the economy. The Primary Sector is the part of economic production involving agriculture, mining, fishing, and materials acquisition. Smith’s day also was laden with work in the Secondary Sector, or the part of the economic production involving manufacturing (factories and home-based). Today, the majority of our work involves the Tertiary Sector, or work which involves providing a service to others such as food, retail, computer processing, or information management. The tertiary sector emerged along with telecommunications and the computer chip technologies (the Three–Sector Theory originated with research by Colin Clark and Jean Fourastié).
In Adam Smith’s day, I’d estimate 2 percent of all work was in the tertiary sector with the rest being in primary and secondary sectors. One recent US Trade report stated that, "Service industries account for 68 percent of U.S. GDP and four out of five U.S. jobs. This dynamic services economy generates the largest services trade in the world, with exports of $606 billion dollars in 2011 and a trade surplus of $179 billion. Services supplied abroad by U.S. affiliates accounted for another $1.1 trillion in revenue in 2010." (retrieved 11 June 2014 from SOURCE
Part of the explanation of why jobs shifted to service-related classifications has to do with supply and demand. Supply is the availability of goods and services in the market place. Demand is the desire in the marketplace for goods and services. Typically with higher supply and lower demand you’d see lower prices. With higher demand and lower supply you’d see higher prices. This is true in many markets, but does not appear to apply to the very unstable US cost of gasoline per gallon which changes without traditional regard to supply and demand.
As the supply of labor-ready employees increased in the US factories and other labor-based industries the demand for these employees appeared to never end. But, as the computer chip transformed technology to the point that less demand for labor became the norm and then workers from all over the world were willing to do the US’s primary and secondary labor for a fraction of the cost, the US literally became an import nation for its primary and secondary goods. Much of the current job market pays and rewards education because education is still in high demand in a service economy. Without it a worker has to compete with cheaper foreign labor or get lucky with the very few labor-related jobs that are in the US economy today.
Search Internet for:
- mandatory education laws
- cultural capital
- manifest functions
- latent functions
- cultural transmission of values
- social placement
- hidden curriculum
- self-fulfilling prophecy
- grade inflation
- social promotion
- functional illiterate
- community college
- personal merit
- scholastic assessment test
- mainstreaming achievement gap
- emotional intelligence
- "acting white" thesis
- abstract and concrete attitudes
- cultural navigators
- gender gap
- stereotype threat
- standardized testing
- information poverty
- correspondence principle
- teacher-expectancy effect
- Inequality in Education
- Cumulative Advantage
- Tyhe Coleman Report
- The Bell Curve
- Hidden Curriculum
- US Dept. of Education LINK
- National Center for Educational Statistics LINK
- ACT Test Corporation LINK
- College Board or SAT Corp. LINK
- Wikipedia on Homeschooling LINK
- Home Schooling Advocacy LINK
- National Charter School Resources LINK
- United Nations Education First LINK
- US Treasury Dept. LINK
- Federal Reserve Education Page LINK
- Stanford Institute for Economic Policy research LINK
- Congressional Budget Office LINK
- Bureau of Labor Statistics LINK