Press "Enter" to skip to content

Entry level salaries and the Michigan Tax

A new survey by GO Banking Rates examines the starting salaries of college graduates in each state. The survey differentiates entry level salaries for college graduates at all levels. The news for Michigan workers isn’t great.

At $37,149, the state offers the 12th lowest average entry level salaries for workers with associate degrees. That’s 6.2% lower than the national average starting salary for workers with a two year degree. The national range for entry level salaries for workers with an associate degree is from $34,062 in Alabama to $51,525 in Maryland. The median starting salary for workers with an associate degree is $39,875.

The cost of living in Michigan is 3% below the national average. But with entry level salaries 6.2% below the national average, and 6.8% below the median, the “Michigan tax” means that people with an associate degree are working at a discount of 3%-4%. Workers with bachelor’s degrees are largely breaking even, and workers with a master’s degree are working at a 1.5% premium, when accounting for the cost of living here.

Put another way, the Michigan tax gouges most the educated workers who earn the least for working and living in Michigan. It’s no wonder that Michigan is hemorrhaging educated workers!

Community colleges can’t force employers to raise their entry level salaries, but they can stop training workers for low-wage jobs. Let employers who rely on low wages and lousy benefits train their own workforce at their own cost. Community colleges should not contribute to the low-wage economy. That’s simply not why communities around the state built and support community colleges.

Entry level salaries should be survival criteria for academic programs

Eliminating academic programs that lead to low wage work sends an important message to the students, the employers, and the community. The local community college is not here to provide training and/or education that traps people in low wage employment. It places value on the students. Right now, students are merely third-party beneficiaries – or worse, bystanders – in a transaction between the community college and local employers.

Removing these low-wage programs from the catalog is also the first step in raising the entry level salary of Michigan’s community college graduates. Currently, the justification that WCC uses to remove academic programs is enrollment. A better, more socially responsible metric would be the entry level salaries of program graduates. Programs that don’t lead students into living wage jobs should be modified to increase their income potential. If that’s not possible, or efforts to improve the program’s financial outcomes don’t lead to higher starting salaries, the programs should be terminated. It is socially irresponsible to allow programs that lead graduates to low-wage work to continue without modification.

It’s time for community colleges to start looking at the performance of their degree programs and making informed decisions about what is and isn’t working for the graduates and the community.

Photo Credit: Matt Brown, via Flickr