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Analytic Rehabilitation

High Earning Workers who don't have a bachelor's degree

by Matthew Mariani

How many people would object to a raise in pay? Not many. Everyone agrees that high earnings are better than low earnings. Statistics show that high-earning workers are likely to have a bachelor's degree or more education. But not everyone wants to spend 4 or more years in college. In fact, most workers do not have a bachelor's degree.

The good news is that many workers without bachelor's degrees have high earnings. High earnings are defined here in two ways. Both depend on medians, the point at which half the workers earned more and half earned less. The first measure of high earnings sets the cutoff at the median for earnings of all workers. The second measure raises the cutoff to the median for earnings of workers with a bachelor's degree.

Some people worry that high-paying jobs are no longer available for those without a bachelor's degree. Many high paying jobs in manufacturing, telecommunications, and some other industries have been eliminated. For men without a bachelor's degree, earnings adjusted for inflation have fallen over the past 15 years, due in part to these declines in high-paying jobs. Rising requirements for some professional, managerial, and other jobs have made entry without a degree even more difficult. An oversupply of college graduates has also displaced some less educated workers from high-paying jobs, which have not traditionally required a bachelor's degree.

Despite these trends, over 9 million, or 15 percent, of the full-time wage and salary workers age 25 and older who didn't have a bachelor's degree in 1998 earned more than $821 a week. That's more than the median for college graduates.

Earnings are one measure of what makes a job good. But choosing the right career involves many factors. Job characteristics, such as the nature of the work and working conditions, are also important. This article identifies occupations in which many highly paid workers do not have a bachelor's degree and points out other things that make for a good job.

Who has high earnings? Median weekly earnings for full-time workers age 25 and older were $572 in 1998. The median for those with at least a bachelor's degree was $821. The low figure is over two and a half times the expected weekly earnings of a full-time employee paid the minimum wage ($5.15 an hour), and the high figure is almost four times higher.

In 1998, 22.5 million workers without a bachelor's degree earned $572 or more a week, and 9 million earned $821 or more. (See chart 1.) Thirty-eight percent of workers without a bachelor's degree earned more than the median for all workers ($572 per week). Fifteen percent of those without a bachelor's degree earned more than the median for workers with a bachelor's or higher degree ($821 per week). (See chart 2.) In several occupations, more than 10 percent of the workers without bachelor's degrees earned over $1,000. (See table 1.)

In part, earnings reflect the skills and innate talents of a worker. Other factors, such as location, urban or rural environment, industry, size of the facility, and unionization, also affect earnings. Three additional factors significantly affect the proportion of workers who have high earnings:

Occupation. Tables 1, 2, and 3 list all occupations that have more than 50,000 full-time wage and salary workers age 25 or older who usually earn $821 or more a week. These tables exclude small occupations --occupations with fewer than 50,000 employed--in which workers have high earnings. Two examples are elevator installer and air traffic controller.

In addition to total employment, table 2 shows the number of workers who do not have a bachelor's degree and their share of the total. Table 3 lists the same occupations but shows the number of high-earning workers who do not have a bachelor's degree--those earning $821 or more per week. Table 3 also describes the employment of these high-earning workers as a share of all workers and as a share of those who do not have a bachelor's degree.

Earnings vary within occupations. Not every worker in a high-earning occupation makes a lot of money. Consider the example of freight, stock, and material movers. Although some of these workers enjoy high earnings, most do not. This occupational group appears in table 3 because 54,000 of these workers did not have bachelor's degrees but earned more than $821 a week. However, these workers accounted for only 7 percent of all freight, stock, and material movers who did not have bachelor's degrees. As noted in table 1, freight, stock, and material movers had median weekly earnings of $379, much less than the median for all workers.

Remember that first impressions may mislead. Annual earnings for seasonal occupations may be lower than implied by weekly earnings: Spells of unemployment reduce annual earnings in these occupations. Excluding part-timers and workers under 25 results in higher earnings numbers because these workers typically earn less. In addition, putting in extra hours in some occupations more readily translates into higher earnings than in others, in part because some workers receive overtime pay.

Age. Earnings tend to increase with age as workers gain experience and seniority. (See chart 3.) This upward trend usually peaks between the ages of 45 and 54. The number of high wage earners is thus concentrated in the 35 to 44 and 45 to 54 age groups. Some of these highly paid workers without bachelor's degrees entered the job market years ago, when educational requirements for entry were lower and more high-wage manufacturing jobs were available. However, some younger workers without a bachelor's degree also enjoy high earnings. For example, 24 percent of workers age 25 to 29 who did not have a degree earned $572 or more a week. About 7 percent earned $821 or more.

Education. Many workers who lack bachelor's degrees have other postsecondary education or training. Training other than a bachelor's degree provides the best preparation for some high-paying jobs. Workers with more training usually earn more. Some high wage occupations are difficult to enter without training, and within occupations, the most highly trained workers tend to collect the largest paychecks and have a better chance of advancing into supervisory jobs.

High wage earners develop skills they need in many ways--through associate degree programs, college courses, postsecondary vocational schools and technical institutes, apprenticeships or other formal employer training, informal on-the-job training, and Armed Forces experience. Earnings data are not available for workers with these types of training, but chart 4 shows that earnings increase with education.

What's good besides earnings? Everyone needs money. Still, hardly anyone chooses an occupation--or a particular job within an occupation--based solely on salary. The perfect career recipe for any individual contains many ingredients besides money. These include the following:

Depending on the mix you prefer, a job with lower earnings might please you more than any other.

Benefits. Many employers provide some benefits that add to the quality of a job. These may include health insurance, life insurance, child-care subsidies, paid holidays and vacation time, sick leave, and employee discounts. Benefits have become a major part of the compensation workers receive. In March 1998, benefits averaged about 28 percent of total compensation costs.

Some benefits, such as health and life insurance or subsidized child care, are as good as cash. Without them, workers would have to pay expenses out of pocket. Some employers, like airlines, provide free or subsidized travel, while retailers may provide discounts on merchandise. Paid holidays and vacation and sick leave improve quality of life.

Depending on the benefits package, a job with lower earnings might provide better total compensation than a job offering just a large paycheck.

Click here for part 2 of this article

This article originally appeared in the Occupational Outlook Quarterly Fall 1999
A publication from the Bureau of Labor Statistics