#4 - The more you learn, the more you earn!

In the West’s longstanding lament over low wages, particularly in rural states like Montana, there is a glimmer of hope: education. Places that successfully educate their young and attract and retain educated workers are seeing rising wages.

It is well known that education plays a key role in people’s ability to succeed in today’s globally competitive labor market. Some counties in the West have an educated workforce, while others do not. This difference is playing a key role in the prosperity of different parts of the West.

From 1990 to 2003, real wages in counties where more than 50 percent of the jobs require a college degree grew by 26 percent, compared to 7 percent growth in counties where less than 50 percent of the jobs required a college degree.

Source: U.S. Bureau of the Census. 2004. STF4, Jobs by Occupation. Washington D.C. Census job information, organized by the Standard Occupational Classification System (SOCS) was divided into two categories: jobs that require a college education, and jobs that do not require a college education. Information on education levels required per job category were obtained from the Occupational Outlook Handbook (OOH), 2006-07 Edition

As the table above shows, by 2003 the average wage in the “college degree required” counties was $52,678, or 75 percent higher than the $39,409 average wage in counties where most jobs do not require a college degree.

It’s getting harder and harder to increase earnings in sectors without educational requirements. The dramatic gap that developed in the 1990s between counties with and without occupations requiring a college degree indicates the growing importance of education in today’s economy.

Source: U.S. Bureau of the Census. 2004. STF4, Jobs by Occupation. Washington D.C.

We are familiar with the notion that plenty of Westerners are working hard but not being well paid for their efforts. As the chart above indicates, the population in counties in the West with a majority of jobs that do not require a college degree grows faster than those that do. But their earnings per job, per capita income, and overall personal income growth are not keeping pace.