Yet a report released this week by the Federal Reserve Bank of St. Louis shows that for minority college grads, the investment in higher education isn’t paying off like it should. And the bank’s analysis is the just latest data set to undermine the bedrock premise that education alone can help level the economic playing fieldbetween whites and minorities.
Although college grads across the board make more money than their less-educated peers, the report found that whites and Asians with four-year degrees not only tend to outearn their black and Latino counterparts, but they also better withstood the impact of the Great Recession. “Based on two decades of detailed wealth data, we conclude that education does not, however, protect the wealth of all racial and ethnic groups equally,” the report’s authors wrote.
According to the study, white and Asian American families with four-year college degrees were more likely to have accumulated much more wealth over the longer term than their less-well-educated counterparts. Ditto for African American and Latino families, although their earnings and wealth were typically lower than that of whites and Asian Americans.
“This is certainly partially a story about intergenerational inequality,” S. Michael Gaddis, an associate professor of sociology and demography at Penn State University, wrote in an email to TakePart.
One factor: “Research shows that minority and low [socioeconomic status] students don’t attend the best possible colleges they could (based on grades, etc.) and that lack of the best degrees translates into a substantial workforce that is underutilized,” wrote Gaddis, who authored a study released in March that found minority students who attend elite schools such as Harvard don’t fare better in the job market compared with less-well-educated whites.
That’s troubling enough, but this latest report from the Federal Reserve Bank of St. Louis also concluded that Hispanic and black families headed by someone with a four-year college degree “typically fared significantly worse than Hispanic and black families without college degrees.” The authors found that “This was true both during the recent turbulent period (2007–2013) as well as during a two-decade span ending in 2013 (the most recent data available).”