College Degree Requirements Creep Into Lower Income Brackets

FORBES

Preston Cooper

November 28, 2023

Earlier this month, the Kraft Heinz Company KHC +1.2% announced it is seeking an “Oscar Mayer Wienermobile Spokesperson,” whose job responsibilities include driving a “27-foot-long hot dog on wheels” across the country representing the Oscar Mayer brand. The position, which pays $35,600 per year, requires a bachelor’s degree. The job posting is unfortunately emblematic of a broader trend: the slow creep of college degree requirements into lower-paid jobs.

In theory, a college education equips students with valuable skills that allow them to produce more in the labor market. Everyone wins: graduates earn higher salaries reflecting their expanded productivity, and the economy benefits from more skilled workers. This is one reason that the federal government has invested hundreds of billions of dollars in expanding access to higher education.

But there’s a danger. Broad subsidies for higher education, by increasing the number of workers with degrees, may simply lead employers to ratchet up the education requirements they attach to job descriptions. Occupations that were once accessible to people with only a high school diploma may begin to require college degrees. But if those degrees don’t make workers more productive on the job, commensurate salary increases may not accompany heftier education requirements. Overall, America’s considerable investment in higher education may not yield the returns we expect—either for students or for society.

Measuring degree inflation

The annual American Community Survey (ACS) asks a large sample of American workers about their incomes and education levels. If rising college attainment rates make workers more productive, college should help more Americans move into higher income brackets. College attainment rates within a constant income range, by contrast, should remain roughly the same. But if higher college attainment fuels degree inflation, we should see rising education levels within lower income brackets.

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