New salary data gathered by the Census Bureau’s American Community Survey explains a few things about the value of various levels of educational attainment. Understanding how Michigan’s starting salary data compare to other states can shed light on why we struggle to retain college graduates.
Among all states, Michigan ranks 31st overall for its median starting salary for college graduates. Among bachelor’s degree holders, Michigan ranks 29th among all states. For graduates with an associate degree, Michigan ranks 38th.
The average starting salary for a person with an associate degree in Michigan is slightly more than $37,000. That’s just 59% of the starting salary for a person in Michigan with a bachelor’s degree. It’s also 30% lower than the median starting salary in Michigan. The state isn’t known for its high cost of living, but people can’t afford to pay their bills when starting salaries are so low.
If retaining workers is important to the state or to a region, one starting point would be to raise the starting salary potential among those with college degrees. It’s not impossible to do. In the top 10 best-paying states for recent graduates with an associate degree, salaries range from between $45,000 and $51,500. That range represents an increase in the average Michigan starting salary of between 21% and 39%.
If more community colleges in Michigan focused on raising the starting salaries of their graduates, Michigan would likely be better able to retain its young adult workforce. Michigan is in the middle of the pack when it comes to starting salaries for people with bachelor’s degrees. Even that’s not enough to retain educated workers. If Michigan plans to recover its educational investment in our young adult workforce, the state and its higher education institutions need to do something to raise salaries for recent graduates.
Starting salary just a starting point
While it’s true that colleges and universities don’t control the salaries that employers offer, it is also true that colleges and universities can eliminate those programs that provide the lowest rate of return on a student’s investment.
By eliminating low-performing programs on a regular basis, colleges and universities can gradually increase their average starting wage for their graduates. It is not enough, however, to remove the low-performing programs.
At the same time community colleges eliminate the programs that offer the lowest return, they must also add programs that offer high (as in above average) starting salaries. Replacing low wage programs with new programs that offer a higher earning potential will also raise the average starting salaries for those programs.
It’s just simple addition and subtraction. Recent graduates are adding up the numbers when they determine whether they stay or go. Colleges and universities must provide these young adults with better numbers to work with by improving the labor force value of their degrees. If they do not, Michigan will lose most of its prime-age workers to states with better economic opportunities.
Photo Credit: 401(k) 2012 , via Flickr
