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SHOW ME THE MONEY: Alliance Analysis Finds That States Could Generate Millions More in Wages by Raising High School Graduation Rates

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"There is an important connection between a state's high school graduation rate and its economic vitality," said Bob Wise

Improving state high school graduation rates could produce significant wage increases, resulting in healthier state economies, according to calculations by the Alliance for Excellent Education. Indeed, some states could see earnings increases of $100 million or more if they could halve the percentage of students who do not finish high school in four years, the Alliance’s analysis found.

“There is an important connection between a state’s high school graduation rate and its economic vitality,” said Bob Wise, president of the Alliance for Excellent Education and former governor of West Virginia. “Workers with high school diplomas qualify for higher wages. And businesses benefit because they can hire an entry-level workforce prepared to be more productive.”

According to the U.S. Department of Commerce, the American worker can expect the following average annual salary, based on education level:

  • high school dropout: $19,000
  • high school graduate with no postsecondary education: $26,200
  • associate’s degree: $33,400
  • bachelor’s degree: $42,200
  • master’s degree: $52,300
  • doctoral degree: $70,700
  • professional degree: $81,500

To determine how much additional money a state would gain by a 50 percent decrease in the percentage of students who do not finish high school in four years, the Alliance used data from the Common Core of Data from the National Center for Education Statistics, research fromJay Greene of the Manhattan Institute, and the average salary figures listed above.1 Comparisons are drawn between those who achieve only a high school diploma, those who go on to earn some postsecondary education, and those who earn a bachelor’s degree.

For example, in 1998, California had 468,162 ninth-grade students, according to the Common Core of Data, and four years later showed a 67 percent graduation rate for that class. Consequently, 33 percent, or 154,493 students from that class, did not graduate in four years. If half of those students (77,247) did get a high school diploma, they would each earn $7,200 in additional wages over a high school dropout, and California would see a total increase of $556,178,400 in earnings. The wage calculation is very conservative because it does not assume any increased economic activity-it is likely that even more money could result from increased wages.

A Snapshot of Selected Other States

State
Graduation
Rate
Percent not graduating in four years
Increase in earnings with diploma
Increase in earnings with some post-secondary
Increase in earnings with Bachelors
Alabama
58%
42%
$94,838,688
$189,677,376
$305,591,328
California
67%
33%
$556,176,456
$1,112,352,912
$1,792,124,136
Colorado
72%
28%
$58,731,120
$117,462,240
$189,244,720
Florida
59%
41%
$316,541,484
$633,082,968
$1,019,967,004
Illinois
74%
26%
$151,141,536
$302,283,072
$487,011,616
Iowa
85%
15%
$22,000,140
$44,000,280
$70,889,340
Louisiana
63%
37%
$85,333,248
$170,666,496
$274,962,688
Massachusetts
75%
25%
$67,201,200
$134,402,400
$216,537,200
Michigan
78%
22%
$105,256,008
$210,512,016
$339,158,248
New York
64%
36%
$321,300,432
$642,600,864
$1,035,301,392
North Carolina
67%
33%
$129,193,812
$258,387,624
$416,291,172
Ohio
78%
22%
$121,158,576
$242,371,152
$390,399,856
Pennsylvania
80%
20%
$107,393,760
$214,787,520
$346,046,560
Texas
68%
32%
$404,055,936
$808,111,872
$1,301,958,016
Washington
72%
28%
$85,812,048
$171,624,096
$276,505,488

 

“A third of our students are not graduating from high school, and another third are graduating without the necessary skills to succeed in college or in the workplace. We face a real crisis in this country,” Wise says. “Implementing programs that promote high school graduation is a shrewd investment by any state. The gains realized include higher employment, better wages, and a healthier state economy.”

The complete chart with results for each state is available at https://all4ed.org/press_room/press_releases/04062005#chart.

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Every Child a Graduate. Every Child Prepared for Life.