Marcus
Who decides how much you will earn in a year? If you work for someone else, s/he makes that decision.
What is that decision based on? How much you contribute to the earnings of the firm. A few firms may have sophisticated models or algorithms (fancy rulers) to provide that amount. Others go by rule of thumb.
What determines the earnings of the firm? It’s ability to sell its products or services in the marketplace. Thus, what you earn depends on the preferences of consumers and businesses who make choices from an abundance of market opportunities.
Ooops! Back up! When you are hired or even promoted, the person(s) making that decision may be influenced by the certification or degrees you hold. S/he or they may think, “If that institution gave this person a piece of paper (is it a QR these days?), it must signify something. Better something than nothing.”
In 2021, Hoosiers holding a graduate or professional degree had median earnings of $70,183. That was $9,894 (12%) below the national figure. It was, however, $15,658 (29%) above the median earnings of Hoosiers with a bachelor’s degree.
Why is this the case? Why, in Indiana, do high school graduates (including those with equivalency certificates) have median earnings $5,510 (18%) more than those who did not graduate high school?
Does the possession of a certificate signify greater knowledge? Greater ability to apply knowledge? Greater reliability? Or just greater endurance? “Stick-to-itivness” as one of my teachers called it.
Maybe, certification is a good proxy for anticipated productivity. Or maybe it is a proxy for a caste system
These data from the U.S. Census Bureau almost scream with other questions: Why is the percentage increment of median earnings, as we move from one level of attainment to the next higher level, greater at all levels in the nation than in Indiana? For example: the jump from some college or an associate’s degree to a bachelor’s degree is 49% in the nation, but 35% in Indiana?
Some, erroneously, will say, “That cause the Coast of Livin’ in Indianny is less than elsawhere.” They don’t want to believe that the products and services provided by Hoosier businesses are worth less than those provided elsewhere. Hence, earnings are lower here than there.
In addition, why are the median earnings for those in Indiana who did not go beyond high school higher than such earnings nationwide? Yet, beyond high school, the median earnings of those in the nation are higher than in our state?
Could it be Hoosier businesses don’t utilize higher education as well as businesses elsewhere? Or is it that those at the bottom of the graduating class are the ones who stay in Indiana?
What answers do our state agencies have for these questions?
Mr. Marcus is an economist. Reach him at [email protected]. Follow him and John Guy on Who Gets What? wherever podcasts are available or at mortonjohn.libsyn.com.
