New Data Show Wages Increasing Across All Education Levels, but Wages for Black Michiganders Still Lag State Median

Source: Entry-Level Wages Over Time Report, Michigan’s Center for Educational Performance and Information¹ 

 

Among all Michigan students, higher levels of postsecondary education correlate with higher entry-level wages. While there is not much distinction between a certificate, associate, or bachelor’s degree at the entry level, graduates of master’s or higher degree programs earn about 45 percent more in their first year than their postsecondary counterparts. Wages for certificate earners have been increasing faster than those with an associate degree, and after 2019, entry-level wages for certificate earners overtook those of associate degree holders. 

Inflation-adjusted wage growth among entry-level workers has varied significantly by educational attainment over the past decade. The largest percentage increase was for the lowest compensated workers: those without a high school diploma and those with a high school diploma as their highest level of education. This increase is at least partly due to the minimum wage hikes seen over the period. Among postsecondary credential holders, certificate earners have seen the greatest increase in entry-level wages with an overall gain of 43 percent over the last decade. They were followed by bachelor’s and associate degree earners at 25 and 23 percent growth, respectively. Entry-level wages among those with a master’s or higher degree have remained nearly unchanged, increasing only 1.5 percent.  

Source: Entry-Level Wages Over Time Report, Michigan’s Center for Educational Performance and Information 

 

Several of the newly available CEPI reports display data by demographic characteristics such as age, race, and gender. This article highlights Black wage and educational outcomes observed in Michigan in the “Entry Level Wages Over Time,” “Median Annual Wages by Educational Attainment,” and “Median Annual Wages by Field of Study” reports. While statewide efforts have made progress around improving outcomes for Michigan’s Black population, their overall earnings still lag behind the state median.  

Source: Entry-Level Wages Over Time Report, Michigan’s Center for Educational Performance and Information 

Note: A ratio of 1.0 indicates equal entry-level pay with the overall population. 

 

While Black entry-level workers earn less than the average entry-level worker at each education attainment level, there is greater disparity among lower education attainment levels. Black workers with no high school diploma and those with a high school diploma as their highest level of education earn 68 and 79 cents, respectively, for every dollar earned by an individual with the same education in Michigan. Those with a postsecondary award earn at least 91 cents for every dollar the median worker earns. Since 2011-2012, the earliest year available from Mi School Data, entry-level Black workers earning certificates, associate degrees, and master’s or higher degrees have seen higher-than-average wage growth, narrowing the wage gap for black Michiganders at these levels of education. These trends persist for wages five years after graduation.

After Five Years, Wages Differences Vary Depending on Level of Education²

After five years on the job, on average, Black workers earned 82 percent of what the median Michigan worker with the same level of education earned. The largest difference between Black workers and the median worker was among those without a high school diploma, with Black workers earning 63 percent as much as the median Michigan worker. Compared to only white workers, the greatest wage disparity was also among those without a high school diploma, where Black individuals earned 53 percent as much as their white counterparts five years after exiting school. At higher levels of education, the gap narrows, as Black workers with a master’s degree or higher earned 92 percent of what white workers earned with the same education.   

After five years on the job, median wages for Black workers consistently lag those of white workers across all levels of education.

Source: Median Annual Wages by Education Attainment, Michigan’s Center for Educational Performance and Information

Download the Data

 

Wage Disparities Persist When Controlling for Area of Study 

Can differences in wage outcomes be attributed to what workers chose to study? One way to answer this question is to examine wage differences among Michigan workers in the same field of study and then observe if racial disparities still exist. While a more expansive analysis could provide a more definitive evaluation of the link between areas of study, wages, and race, this article is limited to data available in the new Mi School Data reports and offers only a brief overview. The data show that while Black workers are under-represented in postsecondary fields with the highest wage outcomes, they earn less than their counterparts even when controlling for their field of study. The bachelor’s degree fields of study that had the highest relative concentration of Black workers were in the bottom or middle third of programs based on observed median earnings, while four of the five programs in which Black workers made up the lowest relative concentration were in the top third of programs by wage. Overall, Black workers were underrepresented in the highest-earning programs by about 20 percentage points. 

 

Black workers in Michigan are overrepresented in middle-wage group fields of study and underrepresented in top-earning groups.³

Overrepresented Fields (> 1%) 

Underrepresented Fields (< -1%) 

Source: Median Annual Wages by Field of Study, Michigan’s Center for Educational Performance and Information 

*Black over- or underrepresentation is calculated as the percentage point difference of the proportion of Black students that chose a given field and the proportion of students that chose the field overall. 

 

The underrepresentation of Black workers in the highest-paying fields holds some explanatory power, but it does not fully explain the wage disparity between racial groups. Black workers still tend to earn less than their peers in the same field of study. Of the programs listed in the table above, the Black median wage was below the statewide median in each instance aside from public administration and education. In fact, in 37 of the 50 fields for which data was available, the annual earnings for Black workers were below the statewide median. The average wage difference between Black workers and the average worker in each major was $6,700, with Black workers earning less, indicating that lower wage outcomes cannot be attributed to the field of study choice alone. 

Conclusion 

Higher education is closely linked with higher wages for all Michiganders, but this analysis reveals that postsecondary credentials play a particularly significant role for Black Michiganders in reducing wage disparities. Ensuring equal access to postsecondary education is key to reducing disparity in employment outcomes, but education level and field of study choice alone cannot explain the shortfall in wages for Black education completers who are subsequently employed in Michigan. New information published by Mi School Data shows that while this situation can be measured using postsecondary outcome data, it cannot be explained by this data alone.  

Footnotes

¹The Entry Level Wages Over Time report includes students who received their high school or postsecondary education in Michigan and are currently employed in Michigan. Wages were collected one year after completing various education levels and are adjusted for inflation. 

²The Median Annual Wages by Educational Attainment report population includes individuals who attended a high school or postsecondary institution that reports to CEPI and had wages reported to the Michigan Unemployment Insurance Agency. Students included in the Wages after 1 Year, 2024 Cohort group finished their most recent education during the 2021-2022 school year. Students included in the Wages after 5 years, 2024 Cohort finished their most recent education during the 2017-2018 school year. 

³This table is calculated using data from the Median Annual Wages by Field of Study, 2024 report year from Mi School Data. Black over- or underrepresentation is calculated as the percentage point difference of the proportion of Black students who chose a given field and the proportion of students that chose the field overall. Fields of study were divided into three wage groupings based on statewide median earnings after five years within their respective education attainment category. Black wage differential represents the difference in median earnings between Black students and the overall statewide median after five years.