Explanation of how income is related to education by Ron Kurtus - Personal Finances: Strategies in Handling Your Money. Key words: quit, drop-out, high school, training, apprenticeship, college, Bachelor's, Master's, Doctorate, degree, wages, income, School for Champions. Copyright © Restrictions
Income Related to Education
by Ron Kurtus (revised 6 September 2012)
You need money to buy the things you want. Unfortunately, a large number of students in the United States quit high school before graduation, many because they want to get a job to start making money. The only problem is that in most cases, the more schooling you get, the higher your yearly income.
The exception to this concerns trades, where you need to become highly skilled, usually through an apprentice program or on-the-job training. In either situation, those who are educated and trained will get a much greater income than those who do not bother learning a skill.
Questions you may have include:
- What does a high school dropout earn per hour?
- What does a graduate with training earn?
- How much can college graduates make?
This lesson will answer those questions.
Some students are so anxious to get a job that they drop out of high school by the time they are 16-years old. There are others who simply don't like school and would rather "hang out" on the streets. When they get older, they are usually forced to get a job of some sort.
The average wage for people not finishing high school over their lifetime is about $11/hour in the United States. Recent dropouts usually get much less, over around $5 or $6/hour. Often these jobs are unpleasant, menial or boring.
Note: Hourly wages are according to a 2002 U.S. Census Bureau report. The wages may have increased over the years, but the relative differences remain the same.
High school and training
Those with a high school diploma, but with no other training, average around $15/hour. But if the person takes some college or trade school classes, or gets other training, the rate goes up to $18/hour.
Students that receive an Associate of Arts (AA) degree or who get on an apprenticeship program will earn from $19/hour to $26/hour.
Getting a college education usually results in making more money than those with only a high school education. Earnings can be from a job or from starting a business.
Salary for graduates
College graduates get paid better in their jobs or professions than high school graduates. The average wage for a person with a Bachelor's degree is $26/hour, and it is $31/hour for a Master's degree. Those with a Doctorate degree can expect around $49/hour.
These rates vary with location. States on the U.S, east and west coasts seem to pay more, but the cost of living there is also higher. There is also a big difference in what you get your degree. Jobs in high technology jobs and in the medical professions usually pay more than jobs in other fields.
Physicians, lawyers, and business executives make the top salaries.
Although a college degree is useful in starting up a business, it is not always necessary, if the person has a good business background and a great idea for an enterprise.
There have been several individuals who dropped out of college but were able to become highly successful and wealthy.
- Bill Gates dropped out of Harvard to start Microsoft along with Paul Allen.
- Steve Jobs dropped out of Reed College to start Apple Computers along with Steve Wozniak.
- Michael Dell dropped out of the University of Texas to start Dell Computers.
Of course, these people may be exceptions, as there are many who start businesses and fail. But in any case, the college education is important.
Since the more education and training you get, the higher your income, it is worthwhile to go to school. High school dropouts average only $11/hour, graduates with training get $19/hour, and college graduates with advanced degrees get $49/hour and more. Those who are educated and trained will get a much greater income than those who do not bother learning a skill.
Resources and references
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Income Related to Education