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The middle class in the United States has never been more difficult to pinpoint. The American Dream - owning a house, supporting a family, and having a stable job with reasonable hours -- was seen as average several years ago. However, this is becoming harder to achieve. In decades past, an individual could obtain this lifestyle straight out of high school, but a college degree is growing more valuable and is potentially necessary to support a family. Does a college degree enable a middle-class lifestyle?
The middle class in the United States has never been more difficult to pinpoint. The American Dream - owning a house, supporting a family, and having a stable job with reasonable hours -- was seen as average several years ago. However, this is becoming harder to achieve. In decades past, an individual could obtain this lifestyle straight out of high school, but a college degree is growing more valuable and is potentially necessary to support a family. Does a college degree enable a middle-class lifestyle?
The job opportunities that come with a college degree are incomparable to those obtained without one. College graduates tend to earn more money than non-college graduates. A study at the University of California Berkeley found that as the average years of education increase, so does the average hourly wage. In fact, according to an article from Carnegie.org, the average college graduate makes 84% more than their non-college-educated counterparts. The unemployment rate between those who are college educated and those who are not is also evident. In February 2022, the unemployment rate for those with a high school diploma was 4.5%. For those with a bachelor's degree, it was just 2.2%. The ownership of a degree provides individuals with a competitive advantage within the job market, making it significantly easier to find and earn a stable job.
A college education typically brings employment, but what about the opportunity cost of obtaining a college degree? Time and money spent greatly hinder financial freedom and cause many college graduates to struggle with creating their middle-class lifestyle. According to an Americanprogress.org article, there are 1.5 trillion dollars of accumulated federal student loan debt. A college education comes with this risk. Unless students win scholarships, they will likely have this financial burden to worry about for much of their young lives. Is the potentially-overwhelming debt worth trying to achieve the American dream of a middle-class lifestyle? Many Americans seem to think so, as this debt has caused many to put areas of their life on hold while they struggle to pay it off. They are a burden on the life of many graduates of the new, inflated-cost era.
This chart shows financial items that millenials have said they put on hold specifically because of their high debt from school in a survey.
Source: https://www.bankrate.com/loans/student-loans/financial-milestone-survey-2022/
Choosing a major is also very important. Several options in the United States end up providing negative returns. For example, among social science majors, the lifetime return to graduate school is around $114,000 relative to a bachelor's degree only in that field. The cost of school outweighs the amount earned with the degree. Attending school at the inflated modern cost is not always worth it if the degree will not earn enough to pay off student loans.
Source: ChangHwan Kim, Christopher R. Tamborini and Arthur Sakamoto, Field of Study in College and Lifetime Earnings in the United States
Middle-class wages in the United States have experienced very little growth in the last several decades. The purchasing power of the middle class has decreased, making the lifestyle depicted in the American Dream increasingly unattainable. 30 years ago, a manufacturing job at GM may have enabled a middle-class lifestyle. Today, even college graduates may have difficulty achieving their financial goals. The jobs that once enabled a middle-class life no longer do.
On the other hand, many jobs that college graduates enter do not require a college degree. According to the Department of Labor, as many as 17 million college graduates work in positions that do not require a college education. Today, a college degree is a sorting process that makes an employer’s job easier, rather than a set of required skills. Take software engineering, for example, coding is a skill easily obtained without the upfront cost of a college degree. Yet, many employers still require a degree to be considered for employment. This significantly raises the entry barriers for those who may not be able to afford the upfront cost of a degree, keeping software engineering degrees behind closed doors for many.
Ultimately, while a college degree undeniably provides better employment opportunities to those who obtain it, for many average college graduates, the increased earnings from a college degree are not enough to propel them into the middle class.
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