Income of U.S. Workforce Projected to Decline
If Education Does Not Improve
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San Jose, CA—If current trends continue, the proportion of U.S. workers with high school diplomas and college degrees will decrease and the personal income of Americans will decline over the next 15 years, according to a new report released today by the National Center for Public Policy and Higher Education.
The report finds that if states do not improve the education of all racial/ethnic groups, the percentage of the U.S. workforce with less than a high school diploma is projected to increase substantially, while the percentage with an associate's degree or a bachelor's degree is expected to decline.
This projected drop in the average level of education of the workforce is due to large increases in those segments of America's young population without a high school diploma or college degree, combined with the retirement of the baby boomers—the most highly educated generation in U.S. history.
In addition, the report identifies three related findings:
"Education is one of the most effective ways for individuals, communities, states, and the country to improve our social and economic future," said Patrick M. Callan, president of the National Center. "Given the changing global marketplace, the high school diploma is no longer enough for people seeking good jobs, or for communities, states, and the country to protect our standard of living. States must put into place the policies and resources needed to advance the education of all their residents."
- A drop in the average educational level of the workforce would lower personal income for Americans and decrease the nation's tax base. If current trends continue, personal income per capita in the U.S. is projected to decline from $21,591 in 2000 to $21,196 in 2020—a drop of $395 or 2% in real terms. In contrast, personal income per capita grew 41% over the past two decades.
- A decrease in the average educational level of U.S. workers would place them at a major competitive disadvantage. Already the United States has not kept pace with other developed countries in increasing the education of its workforce. As a result, the young population in this country is not as well-positioned as its counterparts in several other nations to compete for high-skilled jobs.
- The good news is that if states are able to close the educational gaps among racial/ethnic groups in this country, then the percentage of working-age Americans earning a bachelor's degree (as their highest degree) is projected to jump from 17% in 2000 to 24% in 2020, and total personal income across the U.S. is expected to increase by $425 billion as a result.
The report finds that nearly every state's workforce would be affected by the drop in average educational levels, but the states with severe impacts include: Arizona, California, Colorado, Connecticut, Illinois, Massachusetts, New Mexico, New York, Rhode Island, and Texas. For example, if current trends continue:
These findings are based on a recent analysis by Patrick J. Kelly, senior associate at the National Center for Higher Education Management Systems (NCHEMS).
- The percentage of California's workers with less than a high school diploma is projected to increase from 22% in 2000 to 26% by 2020, while the percentage with a college degree is likely to decrease from 36% to 33%.
- The share of New Mexico's workers with less than a high school diploma is projected to increase from 18% in 2000 to 20% by 2020, while the portion with a college degree is likely to decrease from 31% to 29%.
- Personal income per capita in California is projected to decline from $22,728 in 2000 to $20,252 in 2020—a decrease of $2,476.
- In the State of New York, personal income per capita is projected to drop from $23,404 in 2000 to $22,222 in 2020—a decrease of $1,182.
The report is available on the National Center's Web site at www.highereducation.org. The National Center for Public Policy and Higher Education is an independent, nonprofit, nonpartisan organization. Established in 1998, it receives continued core financial support from a consortium of national foundations that includes The Pew Charitable Trusts, The Atlantic Philanthropies, and The Ford Foundation.