AMERICAN GRADUATE -- December 16, 2011 at 4:19 PM ET
Behind the Numbers: Why Dropouts Have it Worse Than Ever Before
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A new dropout crisis study reveals staggering statistics on economic gaps between those in Chicago and around state of Illinois with and without high school diplomas.
Earlier this week, our friends over at WTTW Chicago Tonight interviewed economist Andrew Sum about the study, released by the Center for Labor Market Studies at Northeastern University. As Sum highlights, these numbers add up to a long-term effect not only for American society, but also for dropouts for most of their lives.
Watch below for Chicago Tonight's interview with Sum, director of the Center for Labor Market Studies:
We've also included Chicago Tonight's Key Findings summary of the dropout crisis in Chicago and Illinois.
"Societal costs: High school dropouts cost society money -- and average of about $70,000 during their working years. Those with a high school diploma, however, make a lifetime contribution to the economy of about $236,000, on average. This is a difference between groups of more than $300,000.
Lifetime earnings: The average lifetime earnings of U.S.-born high school dropouts in Illinois was $595,000. High school graduates earned an average of $1,066,000, and for those with an Associate's degree that figure is $1,509,000.
Assets: Less than half of dropouts in Illinois -- 46 percent -- own a home, compared with 61 percent of high school graduates, and 70 percent of those with an Associate's degree.
Social welfare costs: Just under one-third of high school dropouts receive food stamps, compared with 17.3 percent of high school graduates, and 8.6 percent of Associate's degree holders.
Incarceration rates: Among 18 to 34-year-old males, 14.7 percent of high school dropouts were incarcerated in 2010, while only 3 percent of male high school graduates spent time behind bars.
-Racial differences: Among 19- to 24-year-olds in the City of Chicago
-15 percent did not have a high school diploma
-19 percent of males did not have a high school diploma
-30 percent of Hispanic males did not have a high school diploma
-27 percent of African American males did not have a high school diploma
-Nearly 42,000 of those aged 19 to 24 in Chicago do not have a regular high school diploma.
Clearly, the gap between those with diplomas and without is consistently worsening, but why? We followed up with Professor Sum to get more insight on the big picture.
Sum said the dropout rate for men has been growing for the past 30 years. Meanwhile, the annual earnings of men without high school diplomas have been declining. In short, today there are more dropouts making less money than ever before. According to the report, 15 percent of 19 to 24-year-olds in Chicago do not have a regular high school diploma. In Illinois, a high school dropout is expected to make $595,000 in his or her lifetime -- nearly half of the $1,066,000 a high school graduate is expected to make.
Sum attributes this to a series of changes in the labor economy. For starters, job distribution and occupational changes have eliminated well-paying blue-collar work. Sum reminds us of a time in his hometown of Gary, Indiana, when young people could secure decent paying jobs in manufacturing and construction. These jobs simply don't exist anymore.
Increase in cheap labor, hiring requirements
While the demand for blue-collar work has declined, the supply of undocumented cheap labor has increased. The bottom of the labor market is now flooded with undocumented immigrants, greatly decreasing the opportunity for native-born high school dropouts.
"Society benefits from cheap services, but the dropouts lose out," Sum said. And he claims that is particularly true so for black and Hispanic males.
In the past, employers were more willing to overlook the lack of a diploma. "They would have given you a chance if you didn't have a diploma," said Sum.
Women and the next generation
Although males in Chicago were twice as likely to drop out than females, female dropouts experience lower employment rates and make less than their male counterparts. The lifetime earnings for men without diplomas in Illinois is $600,000 and $400,000 for women. These trends carry on to the next generation, making upward mobility difficult.
"The next generation bears a huge burden in terms of schooling, labor market success, and the ability to get married," Sum explained. According to a study that tracked 14-17 year-olds over a ten-year period, those living in a poor family headed by a single mother, the likelihood of males with Bachelor's degrees was 1 in 100, and 3 in 100 for women.
Nationally, more than 1 million students are expected to drop out of high school every year, leading to higher rates of poverty, unemployment and incarceration. According to Sum, much like a criminal record, dropping out "haunts you for the rest of your life."
View our American Graduate series.