Average Wages in the Rogue Valley by Education Level

by Guy Tauer

December 4, 2017

One of the most popular posters the Oregon Employment Department’s Research Division distributes is titled “Education Pays.” It can be found at high schools around the state as a reminder to students of the higher earnings an education can provide. It is a straight forward chart that shows that average earnings increase for workers with higher levels of education.
Similar to what we find statewide in Oregon, Rogue Valley workers with more formal education have higher earnings on average than workers with less formal education. The average monthly earnings across all education levels in Oregon were $4,322 in the fourth quarter of 2016; that compares with $3,517 in the Rogue Valley. The largest gap comparing statewide and Rogue Valley earnings by education was for workers with a bachelor’s degree or higher. Statewide, workers with a bachelor’s degree or higher earned $6,416 per month compared with $5,189 in the Rogue Valley.
   
Workers younger than 25 are not counted in the educational attainment data. The reason the U.S. Census Bureau only includes workers ages 25 and older in the education attainment data is because that is an age when most people have completed their formal education.
Earnings Vary by Industry

The graph shows the average earnings by educational attainment across all industries, but earnings can vary substantially between industries. The table provides an industry level look at how earnings vary by educational attainment. The cells highlighted in red are those with average monthly earnings greater than $3,980; the average earnings across all sectors and all education levels.      
The utilities industry in the Rogue Valley, with average monthly earnings of $7,381, has the highest average earnings across all industries. That is also true across all levels of educational attainment. Some of the most common occupations within the utilities industry are electrical power-line installers and repairers, water and wastewater treatment plant and system operators, electrical engineers, control and valve installers and repairers, and plumbers, pipefitters, and steamfitters. Only about 460 people are employed in the utilities industry in the Rogue Valley, accounting for less than 0.5 percent of the area’s total employment.

Health care and social assistance is the largest industry in the Rogue Valley, employing more than 20,500 or about 18 percent of the total jobs in the area. Average monthly earnings of $4,518 ranks health care’s average earnings sixth highest among the 19 industries; nearly $1,000 higher than average earnings across all sectors in the Rogue Valley. Education does pay within health care and social assistance. Workers with a bachelor’s degree or higher within the industry had average monthly earnings of $7,313 in the fourth quarter of 2016. Across all industries, workers with a bachelor’s degree or higher had average monthly earnings of $5,189 in the fourth quarter of 2016. Other industries with a substantial wage premium for higher levels of education were management of companies and financial activities, where those with a bachelor’s degree or higher earn 119.7 percent and 92.4 percent more than those with a high school diploma or equivalent, respectively.

The industry in the Rogue Valley reporting the lowest average monthly earnings was accommodation and food services. This is an industry where our “Education Pays” poster doesn’t quite seem to hold true. All of the workers age 25 and older in accommodation and food services have similar average monthly earnings for all levels of educational attainment, ranging from $1,754 to $1,890. Agriculture, forestry, fishing and hunting is another industry where there is very little wage premium for having a bachelor’s degree or higher, compared with lower levels of educational attainment.

The column on the right side has the earnings of workers ages 24 and younger. These young workers consistently earn less than their more experienced counterparts ages 25 and older. The Rogue Valley’s younger workers (ages 24 and younger) in accommodation and food services had average monthly earnings of $1,215 in late 2016, less than their older co-workers in the industry. These younger workers accounted for 32.5 percent of the jobs held in accommodation and food services. The share of young workers holding jobs in accommodation and food services has been on a long-term decline the past 20 years. In 1993, nearly half (44.4%) of the accommodation and food services jobs in the Rogue Valley were held by workers ages 24 and younger. The share of young workers in accommodation and food services actually bottomed out in the wake of the Great Recession from 2012 to 2013, when only 30.3 percent of the industry’s jobs were held by younger workers. From 2014 to 2016, we have seen an uptick in the share of young workers in accommodation and food services, in particular among teenagers. Hopefully, the recent uptick is a sign of a healthier labor market where older workers leave the industry to pursue career advancement opportunities and younger job seekers get the opportunity to be part of the workforce.

Overall, workers with higher educational attainment do earn more on average than workers with lower levels of education in the Rogue Valley. But averages are just that, averages. Earnings vary greatly depending on the industry. “The devil is in the details” is another way to say that. Workers with a bachelor’s degree or higher level of education had average monthly earnings of $5,189 in the Rogue Valley in late 2016. However, in five out of 19 industries listed, the average monthly earnings were less than $3,517 for workers with a bachelor’s degree or higher level of education; the average monthly earnings across all industries and education levels in the two counties.

 


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