Market Failures: In some cases, structural economic problems go much deeper than what higher education can control.
For example, childcare workers in the U.S. make $24K per year on average, according to a recent report
from the U.S. Treasury. Up to 40 percent of the childcare workforce leaves their jobs each year. Yet providers typically can’t pay much more, given the industry’s tight margins.
Many survive by keeping staffing and other costs low, according to the report, which concludes that the childcare system suffers from market failures and requires government support.
Due to concerns about low wages, many colleges will not offer
early-childhood education certificates. Others have quietly dropped programs.
Medical assistants face a similarly challenging job market. Median wages are higher—$38K per year nationally. But burnout and turnover among these entry-level workers spiked during the pandemic. Almost a quarter of medical assistant positions (24 percent) at primary care facilities in California were vacant last year
, a rate that nearly tripled from the previous year.
Some industry observers say medical assistant wages in certain markets would not clear the high school earnings threshold.
Medical assistants typically make at least $40K per year in the Minneapolis metro area. But the biggest draws are the career paths, the benefits these jobs pay (often 30 percent over base wages), and the stable hours they offer for people who are accustomed to holding as many as three jobs, says Deb Bushway
, president and CEO of Northwestern Health Sciences University.
If benefits don’t count toward a wage threshold, such a rule “could indeed threaten programs such as ours when employers are begging for these staff,” Bushway says.
Programs that would fail such a test are disproportionately short-term ones offered by for-profit colleges, says Michael Itzkowitz
, a senior fellow with Third Way and former Education Department official who analyzes college ROI data
. He also says the rule would give programs two years to get above the wage floor before they would lose access to federal grants and loans.
“You should still be able to meet this very minimal economic threshold,” says Itzkowitz. “This is actionable data. It doesn’t mean you just shut down a program.”
The issue with low-performing programs is about more than living wages for their graduates, says Mamie Voight
, president and CEO of the Institute for Higher Education Policy, which played a lead role in the creation of a broad 2021 report
on value in higher education.
“It’s especially a problem if students are taking on debt,” she says, “and if students are spending a lot of money that is not going to provide them that kind of economic mobility.”
Besides addressing cost, Voight says, the high school earnings debate involves big policy questions on equity.
“This all signals the need for some broader societal conversations about adequate compensation for careers that we do need,” she says, including medical assistants and early-childhood educators. “We need to make sure that we are compensating those individuals fairly and adequately, particularly because they’re often women of color.“