According to an Economic Policy Institute analysis of Labor Department data, workers with college or advanced degrees saw a dip in wages last year, while workers with less education saw an increase in pay.
Based off the data, professionals with a bachelor’s degree saw their average hourly wage drop to $29.55 in 2014, down 1.3 percent from a year earlier. For professionals with advanced degrees, their earnings fell 2.2 percent to $38.20. While it is unclear why this is taking place, many economists have their theories about the shift. William Emmons, who is an economist at the Federal Reserve Bank of St. Louis tells CNN Money that younger Americans today are more likely to complete college which means the pool of workers with bachelor’s degrees is expanding. He adds that with recent grads receiving lower salaries, they are pulling down the overall average pay for degree holding professionals.
According to reports, recent graduates, between the ages of 21 and 24, are making 2 percent less than they were in 2007 and 2.5 percent less than they were in 2000. While studies show that work opportunities are improving for young professionals, job prospects are still weaker than before the Great Recession. The unemployment rate for recent grads is 7.2 percent compared to 5.5 percent in 2007.
While college educated professionals are experiencing a dip in pay, the fight for higher minimum wages has led to an increase in pay for less educated workers. Recently, Los Angeles became the largest city to raise their minimum wage to $15 an hour, with several other cities having already implemented an increase in minimum pay.