Income of U.S. Workforce Projected to Decline If Education Doesn’t Improve, Says Report

WASHINGTON

If current trends continue, the proportion of workers with high school diplomas and college degrees will decrease and the personal income of Americans will decline over the next 15 years.

Substantial increases in those segments of America’s young population with the lowest level of education, combined with the coming retirement of the baby boomers — the most highly educated generation in U.S. history — are projected to lead to a drop in the average level of education of the U.S. workforce over the next two decades, unless states do a better job of raising the educational level of all racial/ethnic groups.

The projected decline in educational levels coincides with the growth of a knowledge-based economy that requires most workers to have higher levels of education. At the same time, the expansion of a global economy allows industry increased flexibility in hiring workers overseas. As other developed nations continue to improve the education of their workforces, the United States and its workers will increasingly find themselves at a competitive disadvantage.

In addition, a drop in the average level of education of U.S. workers would depress personal income levels for Americans, in turn creating a corresponding decrease in the nation’s tax base.

The projected declines in educational and income levels can be reversed, however, if states do a better job of increasing the education of all their residents, particularly those populations that are growing fastest.

In addition, the report finds:

  • A drop in the average educational level of the workforce would lower personal income for Americans and decrease the nation’s tax base. If current trends continue, personal income per capita in the U.S. is projected to decline from $21,591 in 2000 to $21,196 in 2020 — a drop of $395 or 2 percent in real terms.
  • In contrast, personal income per capita grew 41 percent over the past two decades. A decrease in the average educational level of U.S. workers would place them at a major competitive disadvantage. Already the United States has not kept pace with other developed countries in increasing the education of its workforce. As a result, the young population in this country is not as well-positioned as its counterparts in several other nations to compete for high-skilled jobs.
  • The good news is that if states are able to close the educational gaps among racial/ethnic groups in this country, then the percentage of working-age Americans earning a bachelor’s degree (as their highest degree) is projected to jump from 17 percent in 2000 to 24 percent in 2020, and total personal income across the U.S. is expected to increase by $425 billion as a result.

“Given the changing global marketplace, the high school diploma is no longer enough for people seeking good jobs, or for communities, states, and the country to protect our standard of living. States must put into place the policies and resources needed to advance the education of all their residents,” said Patrick M. Callan, president of the National Center.

The report is available online at www.highereducation.org



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