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New study reveals the huge salary gap between college grads and high-school grads across the USA

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The average graduate from a US college finishes school with a mountain of debt. On average, they have to pay off around $100,000 before that (huge) investment in their education starts to show some returns.

How quickly they pay off that debt largely depends on how much they earn in the first few years of their career.

And that’s the subject of this latest study by the employment experts at career.io.

Using data collected and analyzed from the US Census American Community Survey, they looked at the median earnings of college-educated graduates compared to high school graduates.

They then translated all that raw data into several maps showing all the US cities and states with the highest salary premium for college grads.

Here’s a breakdown of all the results.

The graduate salary premium in every US state

The largest graduate salary premium is found in California, where workers with a college degree earn 96% more than those with a high school education.

New York is another state where college-educated workers bring home almost double the wage of those who didn’t spend four years at school; the graduate salary premium in the Big Apple state is 91%.

Other states where graduates can expect to earn significantly more include New Jersey (90%), Virginia (85%), and Washington (80%).

Texas has seen its graduate salary premium rise over the last few years.

Graduates in The Lone Star State are now out-earning high-school-educated workers by just under 80%. The earning potential for graduates in Texas has been boosted by the state’s growing status as a thriving tech and start-up hub, as well as its business-friendly regulations, which have attracted some of the USA’s most innovative (and best-paying) companies.

The graduate wage premium in each US state by gender

California comes out on top again in this section of the study. This time, it has the highest graduate salary premium for male workers. College-educated men employed in the state earn double that of those with no degree. In dollar terms, they take home an extra $44,000 per year.

The salary premium for college-educated men in Maryland or Georgia isn’t quite as big. But it’s still significant. According to the data analyzed by the career.io researchers, college-educated workers in both states can expect a salary premium of 80%.

Some of the remaining states in the top ten list include Virginia, Michigan, New Jersey, New York, and Connecticut. In each state, employees with a college degree on their CV enjoy a graduate salary premium of over 80%. Over a working lifetime, the salary premium for male US college graduates can add up to over three million dollars. Suddenly, that $100,000 debt doesn’t seem so big or scary.

A similar story emerges when looking at data on female graduate salaries across all of the US states. In other words, women who invest a six-figure sum in their education can expect to earn that back, and lots more on top, during the early part of their career.

The largest graduate salary premium for US female graduates is in New Jersey, where those with a degree earn 105% more than their non-college-educated counterparts.

There’s also some serious earning potential for female graduates in Maryland, Connecticut, Virginia, and Massachusetts. Every one of these states has a salary premium of over 90%.

Looking at the actual salary that female college graduates earn, the 90% pay premium is equivalent to around $30,000 per year or an additional $2,500 per month. That’s more than enough to make the six-figure cost of a four-year college degree an excellent investment in the future.

The city in every US state with the highest graduate salary premium

This next section of the career.io study broke down the data by city, highlighting those with the largest graduate salary premiums in every US state.

And here’s where we start to see the really big salary premiums—in fact, some of them are huge.

For example, the graduate salary premium in Palo Alto, California, is a massive 256%.

Why is it so big? Well, Palo Alto is a prime location for tech and defense contractors. Jobs at these companies are highly skilled and highly secretive. They select the top 1% of the top 1% and pay accordingly. The average salary in the city of Palo Alto is around $175,000.

Up to this point, the study has dropped nothing but good news for those who decided on college.

So let’s spare a thought for the college-educated employees in Portland, Maine. Because they might not be too happy with what they see in the data. The city has a salary graduate premium of ‘just’ 30%. It’s one of the lowest in the entire study, suggesting that college-educated workers in the city aren’t getting too much value out of all that student debt.

The US city with the highest salary premium for college graduates

College graduates living in Hoboken, New Jersey, are earning 3X more than their colleagues with a high-school diploma. And with an exact graduate salary premium of 305%, it’s the US city where the salary disparity between college and non-college-educated workers is at its very highest.

Hoboken is a traditional working-class city that isn’t immediately associated with high-earning residents or a booming local economy. However, the city is only a short commute from the heart of New York City. Over the last few years, it’s become a popular destination for high-earning workers looking for a quieter home life in the suburbs. The influx of highly educated workers has turned Hoboken into one of the wealthiest cities in the USA. The average median household income is now well over $150,000.

The US cities with the lowest salary premiums for college graduates

Here’s where things start to sound better for US workers with ‘just’ a high-school education.

In cities like Bell Gardens, California, and Bridgeport, Connecticut, the graduate salary premium is only around 10%. It’s even smaller in Schaumburg, Illinois. Here, it’s down to just 7.38%.

And there are four cities in the study where it pays not to have a college degree. They include Weston in Florida, and Johnson City, Tennessee.

But Gary, Indiana, is where high-school-educated workers are seriously out-earning those with a college education. The city, which is famous for its thriving steel industry, has a graduate salary premium of -50%. Flip that statistic around, and high-school-educated workers are making 50% more than those who paid over $100,000 to fund a college education.

US cities with the biggest salary premiums by gender

Johns Creek, Georgia, is the best city in the USA for men with a college degree. At least in terms of lifetime earning potential. The city has a graduate salary premium of 341%, meaning men with a degree are earning $80,000 more than the average local salary.

Folsom, California, also has a massive salary premium for male graduates; it’s 316%.

Edina, Minnesota, has the largest salary premium for college-educated female workers. They make a very respectable $70,000 per year. That’s 390% higher than the salary for the city’s female workers with a high school education, who take home less than $14,000.

Read next: How Much Do Tech Workers Earn? Here’s How It Varies From City to City

https://zabollah.com/new-study-reveals-the-huge-salary-gap-between-college-grads-and-high-school-grads-across-the-usa/
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