The link between higher education and higher incomes in Minnesota is reconfirmed in the most recent data, according to a research brief released this week. Analyzed by the Minnesota Private College Research Foundation, the data also capture how dramatically the wage benefit varies depending on race, with average wages considerably lower for black, American Indian, Hispanic and Asian Minnesotans.

The brief, Change in Income by Education Level, by Race in Minnesota (PDF), confirms that these two longstanding national trends — the link between education and income as well as discrepancies tied to race — remain in place in Minnesota and neighboring states. The analysis uses the U.S Census Bureau’s most recent American Community Survey data, from 2006 to 2008. Finding examples include:

• Minnesotans with a high school credential earn 43% more than those who do not finish high school. Earnings for Minnesotans with bachelor’s degrees average 149% higher than for those who do not finish high school.
• College degree holders see their wages grow faster and plateau at a higher level than Minnesotans with less education.
• For Minnesotans earning a bachelor’s degree, whites earn an average of $52,808 while earnings for blacks, American Indians, Asians and Hispanics average around $40,000.

We asked three local experts who follow such trends to weigh in on the findings. What do they mean for Minnesota and what responses should our state consider, in terms of both the economic benefits of education and how those benefits are distributed among different racial groups? Here are their responses.

Paul W. Mattessich, executive director of Wilder Research and director of the Minnesota Compass project
For the five-state region, a college degree clearly adds an average of $15,000 to $20,000 to a person’s annual income; it adds $24,000 for blacks. This suggests that the quality of life for everyone in our state will increase if we can sustain industries here that require and pay for higher skills, and if we can promote the attainment of college degrees. Persons of color currently contribute the largest growth to our population. To remain competitive, we must increase their rates of post-secondary degree attainment. Our communities and our institutions must nurture the aspirations of all young people to pursue higher education; they must promote the early development of academic skills. They need as well to address any barriers to access which inhibit qualified individuals from entering or completing higher education.

Carlos Mariani Rosa, executive director, Minnesota Minority Education Partnership
Increased educational attainment produces benefits for all racial groups. But in Minnesota, systemic racial dynamics produce unequal education outcomes resulting in different levels of prosperity for different racial communities.

Minnesota must focus on both education quality and equality. For example, while white students have been better set up than students of color to be successful, all students share a strong need to be better college equipped by their K-12 schools.

We can target strategies tailored for specific groups while expecting all students to meet the same high quality expectations. Given unequal economic resources, we could create additional means for different students to afford college, e.g. targeted scholarships, financial aid specifically for older adults. We can also make K-12 more powerfully connected to post-secondary, e.g. by expanding PSEO and other college course-conferring programs and by extending K-12 to grade 14.

Minnesota should engage this data as an essential step to economic and education reform. 

Steve Hine, research director, Minnesota Department of Employment and Economic Development
As Minnesota and the nation recover from the “Great Recession,” our state has once again become a national leader by many measures of economic performance. For example, the state’s unemployment rate has fallen from 8.4% a year ago to 6.8% as of June 2010. This decline is the largest across the states and puts us in a tie for eighth-lowest. However, not all indicators give us such bragging rights. Not only is there a disparity among races in income, but there is a glaring gap between the unemployment rates for whites versus blacks. Based on the most recent 12-month average from the Current Population Survey, the unemployment rate for whites in Minnesota was 6.7% while the corresponding rate for blacks stood at 22.6%. The corresponding rates for the nation as a whole were 8.9% and 15.8% respectively. So while blacks nationally are 77.5% more likely to be unemployed, that increases to a whopping 237% here in Minnesota.

A strong influence on a person’s employment situation is their educational attainment — for example, the unemployment rate nationally for those with less than a high school degree stands at 14.1% while the rate for those with a four-year college degree or higher is 4.4%. One can speculate that this underlies the 237% unemployment rate gap, but this appears to be an incomplete explanation. Based on 2008 American Community Survey estimates, 27.9% of white Minnesotans have a high school diploma or equivalent only, while the rate for blacks is slightly lower at 26.1%. The attainment gap widens when we look at the share of these populations with an associate, bachelor’s or graduate degree — 42.0% of white Minnesotans have such a degree compared to only 28.8% of black Minnesotans. While this difference in educational attainment certainly contributes to the unemployment gap, it is hardly large enough to explain the huge gap in unemployment. Identifying and understanding the additional forces that are impeding black success in our state’s labor markets is crucial to our continued standing as a national leader in economic opportunity.