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Employers want bachelor’s degrees in lower wage brackets

In response to a growing shortage of workers, some employers (including the State of Michigan) have revamped their education requirements for certain positions. In some cases, employers have eliminated degree requirements altogether in favor of demonstrated skills and experience. Despite the fact that there are nearly 10 million open jobs in the United States, employers at the lower wage brackets are increasingly seeking workers with bachelor’s degrees.

In 1960, fewer than 8% of Americans had a bachelor’s degree. By 1970, about 11% of the total US adult population (and one-quarter of the middle class workforce) had a bachelor’s degree. By 2020, about 37.5% of all US adults over the age of 25 had a bachelor’s degree.

While US workers use a bachelor’s degree to move up the income scale, the demand for a bachelor’s degree has also steadily descended income scales. For a given income bracket, the majority of earners will either have or not have a bachelor’s degree. In the lower income brackets, most earners are unlikely to have a post-secondary degree. For example, in 2000, only 16% of workers earning $35,000 (in 2023 dollars) held a bachelor’s degree. Today, about one-quarter of workers in the $35,000 income bracket have a bachelor’s degree.

Today, more than half of earners in the $65,000 income bracket have a bachelor’s degree. Two decades ago, slightly more than one-third of earners in that bracket (again in real dollars) had a bachelor’s degree. This income bracket is currently the lowest bracket at which most earners have a bachelor’s degree. In 2012, this “threshold” bracket was $80,000, and in 2002, the threshold bracket was $95,000.

Bachelor’s degrees are minimum education requirements for more jobs

These threshold brackets don’t represent workers who are simply working below their educational attainment. These workers are filling jobs for employers who have determined that a post-secondary degree is necessary to perform the work.

This may be one reason fewer students are seeking a two-year degree. Employers – even in the lower income brackets – have determined that their open positions require more education. Alternately, they are not willing to consider a relevant combination of education and experience to fill the role if they don’t have to.

This puts prospective workers in a difficult position. The salary for a position must be commensurate with the cost of acquiring the required degree. Yet employers – even those who are attempting to fill sub-$20/hour positions – have steadily increased the educational requirements for these positions.

This should be of concern to community colleges, because in 2023, most of their graduates earn less than $20/hour after leaving school. These graduates are increasingly finding themselves closed out of positions based on their educational attainment, and it becomes harder to justify earning an associate degree (or a non-degree certificate) when these credentials do not provide the income mobility that people need to join or remain in the middle class.

Community colleges need to do a better job of combating “degree inflation” among lower-wage employers. At the same time, they need to increase the quality of their academic programs to ensure that their graduates are prepared to compete with candidates with four-year credentials.

Photo Credit: Sergio Rivas, via Flickr