Prosperity Through Education: Household Income

THE IMPACT OF EDUCATION ON GDP Utah household income in 2013 was $59,770,[51] which is only slightly higher than household income in 1997, when it was $57,938.[52] Utah’s 3.3 % growth in household income from 2012 to 2013 was third highest in the country, behind only Wyoming and Alaska, but this could be attributed to larger numbers of people, including teenagers, working in Utah homes.[53] If Utah’s household income again flattens or stalls, as it did over the previous 15 years, it will have many impacts on economic growth and prosperity, from home ownership, to consumer spending, to savings rates.


Intuitively, higher median wages translate into higher household incomes. As noted by the Economic Analysis and Research Network: “For a full-time, full-year worker, a median wage of $15 versus $20 an hour means the difference between making $30,000 a year and making $40,000 a year. For a household with one person working full time and one person working half time, it is the difference between making $45,000 a year and making $60,000 a year.”[54]

Therefore, college can be the ticket out of poverty for both individuals and families, by raising household income and increasing the likelihood of social mobility. According to The Hamilton Project: “[W]without a college degree a child born into a family in the lowest quintile has a 45 % chance of remaining in that quintile as an adult and only a 5 % chance of moving into the highest quintile. On the other hand, children born into the lowest quintile who do earn a college degree have only a 16 % chance of remaining in the lowest quintile and a 19 % chance of breaking into the top quintile. In other words, a low-income individual without a college degree will very likely remain in the lower part of the earnings distribution, whereas a low-income individual with a college degree could just as easily land in any income quintile—including the highest.”[55]

The bottom line is that higher education is critical to reducing income inequality among families and communities. As a recent article in the New York Times noted: Imagine if the United States government taxed the nation’s one-percenters so that their post-tax share of the nation’s income remained at 10 %, roughly where it was in 1979. If the excess money were distributed equally among the rest of the population, in 2012 every family below that very top tier would have gotten a $7,105 check.

This is hardly trivial money. But it pales compared to the gap between the wages of a family of two college graduates and a family of high school graduates. Between 1979 and 2012, that gap grew by some $30,000, after inflation.[56]

This is an excerpt from the Prosperity Through Education plan. View the entire plan here.


[51] Davidson, L. (2014, September 18). Utah ranks third in household income growth. Salt Lake Tribune. Retrieved from %-household.html.csp

[52] Davidson, L. (2011, September 15). Utah median income drops below 1997 level. Salt Lake Tribune. Retrieved from income-jobs.html.csp

[53] Davidson, L. (2014, September 18).

[54] Berger, N. (2013), 6.

[55] Greenstone, M. (2013). 14.

[56] Porter, E. (2014, September 11). Equation is simple: Education = income. New York Times, B1. Retrieved from equation-more-education-more-income.html?_r=0.