Category Archives: income

2010’s Worst Paying College Degrees Ten Years Later

In 2010, U.S. compensation and data software firm Payscale identified the 10 lowest paying college degrees for those starting their first jobs in their fields after graduation. We wondered how on the mark that list was, so we tapped Payscale's 2020 data for starting wages by college major to see if things got relatively better or worse for today's graduates in those fields.

The results are shown in the following chart. The original 2010 data is shown in blue and the newer 2020 data is shown in green. In between, in orange, we've adjusted the 2010 starting salary data for inflation to be in terms of 2020 U.S. dollars to make those older salaries directly comparable to the actual starting pay for graduates in the listed fields in 2020.

Starting Pay for 2010's Worst Paying College Degrees

After adjusting for inflation, we see only two degrees where the actual starting pay for graduates in 2020 is ahead of 2010's inflation-adjusted level: Athletic Training and Elementary Education. Horticulture comes close to breaking even, so to speak, and the remaining fields would appear to have become even less rewarding.

Of these less rewarding degrees, Culinary Arts presents the biggest gap between 2010's inflation adjusted pay and 2020's actual starting pay, followed by Special Eduation and Paralegal Studies.

In 2010, Payscale also indicated what an individual holding these degrees could expect to make at a mid-career point, some 10 or more years after graduation. Since it's 10 years later, we thought it would be especially interesting to see how 2020's actual mid-career pay compares with 2010's inflation-adjusted mid-career pay. Our results are shown in the next chart:

Mid-Career Pay for 2010's Worst Paying College Degrees

Once again, the fields of Culinary Arts and Athletic Training come out the furthest ahead after accounting for inflation, but Theology graduates also gained more income than would have been expected based on 2010's inflation-adjusted pay.

Most the other fields saw their 2010 graduates making something within a several percent of their 2010 peers' inflation adjusted pay, with one big exception, which looks like it is in error.

According to Payscale's 2020 survey data, individuals holding degrees in Special Education with 10 or more years of experience saw the average mid-career pay in their field collapse. At $54,500, it is just $700 higher than 2010's non-inflation adjusted pay, some $9,800 below what adjusting the mid-career income for 2010 would predict.

The Bureau of Labor Statistics indicates the median pay for Special Education teachers was $61,420 per year in 2019, which is more in line with Payscale's 2010 inflation-adjusted mid-career income figure.

We sampled other income data for other fields, which appears to be in line with Payscale's surveyed reults, so the 2020 mid-career pay figure for Special Education degree holders appears to be an outlier.

Overall, it appears most of 2010's lowest paying degrees for college graduates turned out to be as bad for pay 10 years later as 2010's data suggested they would be.

Average Hourly Pay and Benefits in the United States

The Bureau of Labor Statistics has been tracking the average pay and benefits earned by American workers in all occupations and working in all industries since at least the first quarter of 2004 [1], where we now have nearly 15 years worth of data that indicates how much the average civilian employee in the U.S. has been compensated for their hours worked.

We've visualized the nominal data reported by the BLS in the following chart, where we've presented the average wage or salary and the total benefits earned per hour worked with the combined total compensation earned by civilian workers in the U.S. from 2004-Q1 through 2018-Q3. The data for 2018-Q4 won't be available until 19 March 2019.

Average Compensation per Hour for All Civilian Workers, All Occupations in All Industries, 2004-Q1 through 2018-Q3 title=

From 2004-Q1 to 2018-Q3, the cost to civilian employers in the U.S. of compensating their employees rose from $24.95 per hour to $36.63 per hour, an increase of 47%. Breaking that figure down into its components, hourly wages and salaries rose by 41% from $17.71 to $25.03 over that period, while the value of benefits paid to civilian employees as part of their total compensation rose by 60% from $7.23 to $11.60 per hour.

In our next chart, we're presenting the same quarterly information, but now adjusted for inflation to be in terms of constant 2018-Q3 U.S. dollars.

Inflation-Adjusted Compensation per Hour for All Civilian Workers, All Occupations in All Industries, 2004-Q1 through 2018-Q3 title=

After taking inflation into account, we find that hourly wages and salaries have risen by 5% from 2004-Q1 to 2018-Q3 and that their benefits have increased by 19%. Together, the inflation-adjsuted total compensation of civilian employees in the U.S. has increased by 9% from 2004-Q1 through 2018-Q3.

Both employers and employees have incentives to favor benefits over wages and salaries in considering how employees will be compensated for their labor, where in particular, the portion of employee compensation that goes toward paying the employer-provided benefit of health insurance is exempt from federal, state and local income taxes.

Notes

[1] On a quarterly basis, following the North American Industry Classification System (NAICS) for tracking costs across various industries. The BLS also has annual employee compensation data going back to 1986 that followed the older Standard Industry Classification (SIC) code system.

References

U.S. Bureau of Labor Statistics. Employment Cost Trends: Employer Cost for Employee Compensation. [Online Database]. Accessed 4 January 2018.

Organization for Economic Co-operation and Development. Main Economic Indicators: Consumer Price Index: Total All Items for the United States (Quarterly, Seasonally Adjusted). [Online Database]. Accessed 4 January 2018.

Average Hourly Pay and Benefits in the United States

The Bureau of Labor Statistics has been tracking the average pay and benefits earned by American workers in all occupations and working in all industries since at least the first quarter of 2004 [1], where we now have nearly 15 years worth of data that indicates how much the average civilian employee in the U.S. has been compensated for their hours worked.

We've visualized the nominal data reported by the BLS in the following chart, where we've presented the average wage or salary and the total benefits earned per hour worked with the combined total compensation earned by civilian workers in the U.S. from 2004-Q1 through 2018-Q3. The data for 2018-Q4 won't be available until 19 March 2019.

Average Compensation per Hour for All Civilian Workers, All Occupations in All Industries, 2004-Q1 through 2018-Q3 title=

From 2004-Q1 to 2018-Q3, the cost to civilian employers in the U.S. of compensating their employees rose from $24.95 per hour to $36.63 per hour, an increase of 47%. Breaking that figure down into its components, hourly wages and salaries rose by 41% from $17.71 to $25.03 over that period, while the value of benefits paid to civilian employees as part of their total compensation rose by 60% from $7.23 to $11.60 per hour.

In our next chart, we're presenting the same quarterly information, but now adjusted for inflation to be in terms of constant 2018-Q3 U.S. dollars.

Inflation-Adjusted Compensation per Hour for All Civilian Workers, All Occupations in All Industries, 2004-Q1 through 2018-Q3 title=

After taking inflation into account, we find that hourly wages and salaries have risen by 5% from 2004-Q1 to 2018-Q3 and that their benefits have increased by 19%. Together, the inflation-adjsuted total compensation of civilian employees in the U.S. has increased by 9% from 2004-Q1 through 2018-Q3.

Both employers and employees have incentives to favor benefits over wages and salaries in considering how employees will be compensated for their labor, where in particular, the portion of employee compensation that goes toward paying the employer-provided benefit of health insurance is exempt from federal, state and local income taxes.

Notes

[1] On a quarterly basis, following the North American Industry Classification System (NAICS) for tracking costs across various industries. The BLS also has annual employee compensation data going back to 1986 that followed the older Standard Industry Classification (SIC) code system.

References

U.S. Bureau of Labor Statistics. Employment Cost Trends: Employer Cost for Employee Compensation. [Online Database]. Accessed 4 January 2018.

Organization for Economic Co-operation and Development. Main Economic Indicators: Consumer Price Index: Total All Items for the United States (Quarterly, Seasonally Adjusted). [Online Database]. Accessed 4 January 2018.

Visualizing the U.S. Cumulative Distribution of Income in 2018

The U.S. Census Bureau has published its annual report on Income and Poverty in the United States, which we've used to visualize the cumulative distribution of income for U.S. individuals, families and households in the following animated chart. The cumulative income data applies for the 2017 calendar year - if you're looking for income data for the 2018 calendar year, it will not be collected until March 2019 and will not published until September 2019.

Animation: Cumulative Distribution of Total Money Income for U.S. Individuals, Families, and Households in 2017

We set up the animation to present each of the frames for 7.5 seconds each, but if you'd prefer more time to inspect them, here are links to the static cumulative income distribution charts for U.S. individuals, families, and households.

If you would like to estimate where you fall on the the income distribution spectrum in the U.S. using these charts, all you need to do is find your income on the horizontal axis, trace a vertical line up to where it intercepts the curve on the graph, then trace a horizontal line to the left side of the chart where you can roughly approximate your income percentile ranking on the vertical scale.

But if you would like a more precise estimate, we have updated our "What Is Your Income Percentile Ranking?" tool with the 2017 income distribution data. Our tool can also estimate what your income percentile would have been in any calendar year from 2010 through 2016.

Finally, if you would like more current estimates of median household income, we've been happy to accommodate your information needs since August 2017!

Median Household Income in the 21st Century: Nominal and Real Estimates, January 2000 to July 2018

We produced the chart above, covering through July 2018, just a few weeks before the Census Bureau published its annual report for 2017. If you've been following our series, you were not in any way surprised by what the U.S. Census Bureau reported for that year!

Lifetime Income Trajectories by Education Level for Full-Time, Year-Round Workers

We've drilled down a bit deeper into the U.S. Census Bureau's data documenting the lifetime income trajectories that Americans have expect based on their level of education.

Previously, we looked just at those trajectories for all Americans with some work experience for the years from 2000 through 2016, which includes the data for Americans who work part time, who may only work part of a year, who may have exited the workforce, whether temporarily, such as to focus on raising children or because of layoffs or other job changes, or permanently, such as through retirement.

Now, we're focusing like a laser beam on Americans who work full-time, year-round and, as a bonus, we've expanded the data in our analysis to include all the years for which the Census Bureau has provided this information in a convenient digital format, which is to say since 1994. Our first chart shows the mean lifetime income trajectories for various levels of educational attainment for these full-time, year-round workers:

Mean Lifetime Income Trajectories by Education Level for Full-Time, Year-Round Workers as a Percentage of the Age 18-24 Cohort's Mean Income, 1994-2016

This chart reveals a clear difference in the education level-based lifetime income trajectories that Americans who work full-time, all year-round, where those who can sustain working at this pace can expect to have, on average, higher lifetime incomes with higher levels of educational attainment.

That income differentiation also carries from the very outset of their adult working lives, where incomes rise with higher levels of education. The following chart shows this data for 2016, which until September 2018 when the data for 2017 will be made public, represents the most recent year for which this data is available.

Mean Income for Age 18-24 Cohort Working Full-Time, Year-Round by Education Level, 2016

The pattern shown in the first chart is persistent from year-to-year in the Census Bureau's historical data, which provides confidence that the survey data is capturing the average lifetime income trajectories of Americans who work full-time, year-round. As an example of this persistence, the following chart shows the age-based incomes as a percentage of the mean income of the Age 18-24 cohort for Bachelor degree holders who work full-time, year-round.

Lifetime Income Trajectories for Bachelor Degree Holders Working Full-Time, Year-Round, as Percent of Mean Income of Age 18-24 Cohort, 1994-2016

While there is considerable variation from year to year, the overall pattern for lifetime income trajectories holds across the various levels of educational attainment and over what is now more than two decades worth of income data.

References

U.S. Census Bureau. Current Population Survey Tables for Personal Income. PINC-04. Educational Attainment--People 18 Years Old and Over, by Total Money Earnings, Work Experience, Age, Race, Hispanic Origin, and Sex. Both Sexes, All Races. Worked Full Time, Year Round. [Digital files: 1994, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016]. Accessed 19 August 2018.