Trends in Wage Growth and College Enrollment

As the effects of the COVID-19 pandemic continue to reverberate, sectors and institutions are rethinking many of the assumptions they once held. No stranger to these disruptions, higher education continues to adjust to a new normal. After many years of uncertainty, economic indicators look promising. One especially strong economic indicator from the Atlanta Federal Reserve’s Wage Growth Tracker, shows that the 12-month moving average of median hourly wage growth stands at 3.8% overall. This number jumps up to 10.5% for 16–24-year-olds. These strong gains compare to a 6.9% increase in December 2020 and 8.4% in December 2019. For other age groups, there was an increase of 4% for those 25-54, and 2.3% for those aged 55+ in 2020.

This data comes amid falling college enrollments across the country. Because wage growth for young people is almost double that of older generations, it is not hard to understand why. The January jobs report showed that 467,000 jobs were added last month, while the unemployment rate remained low at 4.0%. Right now, young people may be trying their hand in the especially strong job market. However, this trend is nothing new. The National Student Clearinghouse estimates that in fall 2021, public four-year institutions experienced a 3% decline in total enrollments from the previous year, compared to a 2.7% drop for the entire sector. This drop continues from fall 2020, which saw a sector-wide 2.5% drop. Since the beginning of the pandemic, enrollment losses have totaled a whopping 5.1%, resulting in almost a million fewer students.  

This wage growth is primarily being captured by young people, and by people who are in the traditional college-going age range. That stereotype holds true for our own state. In 2021, 86% of Washington college students were 24 and under.

While our state is not immune to the enrollment issues that are trending nationwide, data shows the difference that a Washington education can make. Although student loan debt is a concern for many, half of Washington’s 2019 class graduated from a baccalaureate degree-granting institution with no student loan debt. The average Washington undergrad only had $24,645 in student loan debt; compared to the national average of $29,200. Our state ranks among the top ten states for low student debt. Additionally, the three-year student loan default rate for graduates from Washington’s public four-year institutions is 3.8%; almost half the national average of 7.3%. 

Additionally, data continues to show the value of a college degree. The oft-cited fact that college graduates earn more than non-graduates remains true. The same data show that college graduates were less likely to be unemployed during the pandemic. In 2020, both college graduates and non-graduates saw high unemployment, but whereas those with bachelor’s degrees unemployment rate was 5.5% compared to 9% for non-graduates. Workers with a bachelor’s degree earned a median weekly income of $1,305 in 2020, compared with $781 for workers with a high school diploma.  

Other recent changes could entice students back into the classroom. The College Board recently announced changes to the SAT coming in 2024, including the shift to a digital format, and reducing the writing and math assessment section from three hours down to two. These changes come amid broader shifts in admissions, and questions as to whether to ditch testing altogether. FairTest’s Test-Optional Tracker estimates that more than 1,800 colleges and universities have adopted some type of test-optional or test-blind admissions. In Washington, all six of the public-four-year college and universities are now completely test-optional. In addition, Washington has made the path easier for students, with the Guaranteed Admissions Pilot program, through which an application to the institution plus meeting certain criteria can allow individuals to attain their degree.   

The pandemic has had many ups and downs, but our college and university leaders – in partnership with faculty, staff, students, and public health leaders – continue to respond with swift and intelligent solutions. One thing that has not changed is the value and importance of education.