And wage erosion is likely only to intensify as the number of college graduates rises in China, India and other offshoring hubs. China alone expects the number of college graduates to increase by 22% this year, with 4.13 million job candidates entering a domestic market with only 1.66 million jobs available, according to a Chinese government report released in May.
Still, a college education remains a ticket to higher-paying jobs. According to U.S. Census Bureau figures, college graduates earned an average of $51,206 last year, whereas high school graduates earned $27,915 and those with no high school diploma earned $18,734.
Smith, the San Francisco Web designer, said he would like to go back to college for a master's degree in education. He could earn more money as a teacher, he said, but he does not want to rack up student loans, and he cannot afford to take time off work to go to school.
When it comes to beating wage stagnation, he said, "I think people with families have it a bit harder. Folks who are single can take those risks."
In fact, economist Harrington predicted a related ripple effect from wage stagnation: "It's going to delay marriage. It's going to delay child-rearing," he said.
"Some of these people are never going to catch up. There is a real price we pay here in terms of the cost to the economy."
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Learn and earn?
The average annual wages of college graduates fell during the economic recovery; those of high school graduates rose. Figures are adjusted for inflation.
Four-year college graduates
2000: $54,396
2004: $51,568
Percent change: Down 5.2%
High school graduates
2000: $28,179
2004: $28,631
Percent change: Up 1.6%
Source: The 2006 Economic Report of the President
