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High-earning workers who don't have a 4-year college degree.

It is well known that workers with more education earn more money than those with less, on average. Averages, however, do not tell the complete story. At each level of education, some workers earn substantially less and others substantially more than the average. This article looks at workers at the high end of the earnings range. It shows how many high earners there are by level of education and what proportion they are of all workers. The five educational levels are: Less than 4 years of high school, 4 years of high school, 1 to 3 years of college, 4 years of college, and 5 or more years of college. The article also discusses the occupations with large numbers of high earners who have completed less than 4 years of college.

While there is no generally accepted definition of high earnings, for this article, high earnings are defined as $600 a week. That's $31,200 annually for those who worked year-round. About 1 wage and salary worker in 5 earned $600 or more a week in 1989 according to the Bureau of Labor Statistics' Current Population Survey. Self-employed workers may earn more or less than wage and salary workers in the same occupation.

High, Higher, Highest

Not surprisingly, the data show that the chances for high earnings increase with education. Only 6 percent of those with less than 4 years of high school, 11.9 percent of those who completed 4 years of high school, and 19.5 percent of those who completed 1 to 3 years of college had high earnings (see chart 1). In comparison, more than a third of those with 4 years of college and almost half of those with 5 or more years of college had high earnings. What the data also show--and what is completely obscured by averages--is that 10.5 million people with less than 4 years of college had high earnings (see chart 2). The proportion of nongraduates with high earnings was lower than the proportion of graduates because so many nongraduates have low earnings.

If one defines high earnings as starting at some figure greater than the $600 used here, the correlation between education and earnings becomes even stronger. For example, almost 19 percent of the workers with 5 or more years of college earned at least $1,000 a week in 1989, while less than 1 percent of those without a high school diploma did. (See chart 3)

Occupations of High Earners

High earners with more education were generally in different occupations than those with less education (see table 1). About 95 percent of those with 5 years or more of college were in managerial, professional specialty, technician, and sales occupations, while only 17 percent of those with less than 4 years of high school were. Contrastingly, about 24 percent of all high earners were in blue-collar occupations; however, only 2 percent of those with 5 or more years of college were, while 76 percent of those with less than 4 years of high school were. [Tabular Data Omitted]

For the workers who did not complete 4 years of college, what occupations were most likely to provide high earnings? Table 2 ranks occupations with 50,000 or more workers who have less than 4 years of college and earned $ 600 or more a week in 1989. Occupations are listed by the proportion of workers who are high earners. A high proportion of workers in some small occupations not listed here, such as elevator installer and glazier, also have high earnings. [Tabular Data Omitted]

Other Reasons for High Earnings

Education is only one factor that helps explain earnings. Every occupation has workers at many levels of skill, experience, and responsibility whose earnings vary accordingly. Beginners and those with limited training are less likely to have high earnings than highly skilled, experienced workers.

People in these occupations develop the skills they need for high earnings in many ways. Some attend college, but for less than 4 years. Others train at technical institutes or trade schools; in adult, vocational, and continuing education programs; in the Armed Forces; or through correspondence schools. Some acquire skills on the job through an apprenticeship or other formal employer training program, or more informally by watching, asking questions, reading, and practice. Others learn quickly from friends and relatives or on their own. And people with a good basic education--who read, write, reason, and compute well--who are particularly hard working and willing to take responsibility, or who possess mechanical, sales, or leadership abilities have greater chances for high earnings.

Earnings are also affected by geographic area and industry. Workers in high-wage areas, such as San Francisco, or high-wage industries, such as petroleum refining, are more likely than others to have high earnings. Those in low-wage areas and industries are less likely to. Stephen Tise is an economist in the Office of Employment Projections, BLS.
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Author:Tise, Stephen
Publication:Occupational Outlook Quarterly
Date:Sep 22, 1990
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