Despite What You Hear, College Pays Off

It’s a mystery why a vocal band of I-don’t-know-what-to-call-them is trying so hard to convince people not to go to college.

The most visible of those is probably Peter Thiel, the billionaire with two degrees from Stanford. The most recent is a report from the conservative Manhattan Institute that aims to make the case that college is not worth it.

The forward to the report is written by Oren Cass, a former policy advisor to Mitt Romney’s presidential campaign, himself with two degrees, including one from Harvard. Cass opens with a poll showing that about 45% of young people thought a high school degree prepared someone “very well” to “get a good job.”

News coverage of that poll repeated the fact that college gradates are more likely to have jobs and make more—substantially more—those with a high school degree only. “Experts,” the poll coverage said, were worried that “young Americans don’t seem to be getting the message that college pays off.”

Enter Cass, who says of that, “The youth are correct, and the experts are wrong.”

Obviously, the experts are right. And Cass, it seems, has not read the report he’s trying to bolster.

The Manhattan Institute report itself—the one Cass wrote the forward for—says, clearly and repeatedly, that college pays off more than high school alone. “College graduates, on the whole, unquestionably remain the economy’s winners,” the report says. And also, “college graduates typically earn much more than individuals with only high school diplomas.”

That’s simply true. On average, and for the overwhelming majority of people, college pays off not just well, but extremely well. The typical college graduate will earn about $900,000 more than a typical high school graduate over their lives.   

Nonetheless, Cass and the report attempt to throw shade on that truth by hanging an argument on data slight-of-hand and making the exceptions seem like the rule. Cass writes, for example, “everyone in the top quarter of high school graduates outearn[s] everyone in the bottom quarter of college graduates.”

Let’s be clear about what he’s saying—that, if you graduate from high school only and are lucky or good enough to be find your way into the top 25% of everyone in the country with a high school diploma only, you’ll earn more than those who graduated college and found their way to the bottom of that group, for whatever reason.

The data trickery first. The report makes clear, but Cass neglects to mention, that when he says “college graduates” he means those with a four-year degree only—not doctors, lawyers, economists, or engineers, even though they absolutely graduated college. When you take the hefty salaries of those earners out of the picture, the distribution of “college graduates” moves down considerably, making college seem less rewarding.

Moreover, millions of college graduates willingly, actively and by design take jobs that don’t pay well compared to other career options. Nurses, teachers, social workers all have college degrees and don’t earn much, comparatively. That’s not an indictment of college, it’s an indictment of obscene wage scales that don’t value public service.     

And the exception—clearly not every single college graduate out-earns every single person without a college degree. Some people drop out of college and go on to become billionaire entrepreneurs. Bill Gates is going to earn more than 99-point-something percent of college graduates.   

The fact that some people with only a high school diploma make more than some college graduates—which is all the report actually claims—is not a knock on college, especially when you do not count doctors but do count teachers. The fact is, some high school graduates do quite well without going to college, most do not. Quoting Cass again, “for many people, a high school diploma can be adequate preparation; for many people, a college degree accomplishes little.” Many, sure. Most, no.

The report’s own chart “Earning Distribution by Education Level” makes the point well. For every single distribution level—bottom 10% of earners, bottom 25%, those at 50%, 75% and 90%—those who have a four-year degree earn more than those without one. That those in the very top of the high school group make more those at the very bottom of the college group is not news, it’s the definition of an exception.

The rule is still the rule—those who go to college make more money, on average, that those who do not.

Three other quick points on the report, which itself is not bad, just mischaracterized.

It correctly points out that it’s becoming more and more difficult to live in big cities without a college degree. It says, “while workers of all education levels once received higher wages in denser cities, this premium has vanished for workers without college degrees.” In other words, if you want to live in San Francisco or L.A. or even Dallas—cities the report cites in particular—then a high school diploma alone won’t get you there.  

Another is that the crux of the report—that some of the best high school only earners make more than the worst bachelor’s only earners—ignores the glut of cheap and downright worthless college degrees that have been pumped into the market in the past decade and change. For-profit, largely online “colleges” have made billions churning out millions of paper degrees of little to no value whatsoever.

Thankfully, many of them have gone under or gone into hiding. But several large, point-and-click “universities” are still around, dumping scores of unprepared “graduates” into the work market every year, very few of whom earn more than high school graduates. Their diminished outcomes are not a failure of college but of a specific kind of college. It’s disingenuous to look at graduates from For-Profit State and say “college” doesn’t pay off.

Finally, counting income is perhaps the worst possible way to measure the outcome of education. It’s reductive and two-dimensional, like trying to watch a baseball game by focusing only on the left fielder.

The report’s conclusion says, “many who pursue college today might be better served by alternative pathways toward occupations that require less formal education and offer a chance for advancement.” Again, many may. Most will not.

It calls the focus on college preparation “monomaniacal,” which is tell. As is Cass’s swipe at the “enormous subsidies to help fund a campus experience that can appear more amusement park than education.” That’s not analysis. That’s something else.

It’s a mystery why some people simply cannot accept that college works, and works well, for most everyone. Even when their own report says, “College graduates, on the whole, unquestionably remain the economy’s winners,” they want to insist that “noncollege pathways … could offer greater opportunity for economic success.” They could. Probably won’t. Usually don’t.