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1 big thing: Of course college is worth it

Median annual wage for recent graduates
Data: Federal Reserve Bank of New York; Chart: Axios Visuals

Yes, college is still worth it, Emily writes.

Driving the news: The wage gap between recent college and high school grads has been widening for decades, and grew even more last year, per new Federal Reserve data.

Why it matters: Americans seem to be falling out of love with the idea of a four-year degree.

  • Confidence in the value of college education, a cornerstone of the American dream, is falling, per polling from Gallup and the Wall Street Journal.

Reality check: Economic data show clearly that a college degree gives individuals a lifetime earnings edge — plus other benefits.

  • Despite what you've heard about AI stealing our jobs, the U.S. economy needs educated workers to grow and flourish: How else would that AI get developed?

Zoom in: In 2023, recent college grads aged 22-27 working full-time earned $24,000 more per year than those 22-27 with only a high school degree.

  • Back in 1990 the gap was $15,000, in today's dollars, according to the numbers tracked by the New York Fed.
  • To put that in perspective, by their early 20s the high-school degree workers likely have many more years of work experience than the new college grads — yet they're still getting out-earned.

Zoom out: That gap is just the beginning. The wage premium goes on to double over a worker's lifetime, according to research economist David Deming published last year.

  • He followed a group of college-educated workers through their working lives. At age 25 these folks had a 27% premium over high school-only graduates. By age 55, that premium was 60%.
  • "It's malpractice to tell a young person that a college degree isn't necessary anymore," says, Deming, who is a professor at the Harvard Kennedy School.

Follow the money: A lot of research, surveys and news articles evaluate the worth of a degree for recent graduates but the value of a college education accrues over a worker's lifetime.

  • Even those who don't graduate have higher earnings than those who don't go at all.

More educated workers are also more likely to have other benefits, like the ability to work remotely, access to paid sick and family leave, and health insurance.

The intrigue: In 2022 the college premium narrowed as real wage increases for lower income earners soared. That was driven by post-pandemic demand for workers in sectors, like restaurants, facing worker shortages.

  • That was a blip. The gap has since widened again.

"We're in an economy that puts a premium on high skill, knowledge, idea generation," says Jaison Abel, head of urban and regional studies at the NY Fed who's tracked this data for years.

  • "There's fewer and fewer opportunities, especially good-paying opportunities, for those who have just a high-school diploma."

Go deeper

2. About college degree requirements in job listings

Illustration: Aïda Amer/Axios

Fewer job listings require a college degree, Emily writes.

Why it matters: That doesn't necessarily mean employers are actually hiring more workers without college degrees.

Driving the news: 52% of the jobs posted on Indeed in January didn't list any formal education requirements, according to data from the Indeed Hiring Lab. That's up from 48% in 2019.

The big picture: In a tight labor market, employers are less apt to load up their help-wanted ads with more restrictions.

  • "Why would you require a degree and cut off half of possible applicants?" says Harvard's Deming.
  • Plus, it often goes without saying that a degree is required. For example, only about a third of job postings on Indeed for physicians "require" a minimum of a bachelor's degree.
  • But of course, we know (we hope?), Cory Stahle of Indeed writes, that our doctors went to college.

The bottom line: The real proof is in whom companies ultimately hire. And the numbers there are far less exciting.

  • A similar review from LinkedIn last year found that while requirements for professional degrees are becoming less common, there's been very little growth in new hires without professional degrees.

3. When for-profit and nonprofit blur

Illustration: Aïda Amer/Axios

It's increasingly common for rich entrepreneurs to convert their successful for-profit companies into nonprofits, Felix writes.

Driving the news: When nonprofits can conversely become for-profits, there are also significant implications for U.S. tax revenues, Elon Musk said Friday in his complaint against OpenAI.

Why it matters: Silicon Valley is based on an ecosystem of thousands of companies raising billions of dollars to invest in high-risk research and development programs.

  • OpenAI has raised the prospect of those programs being nonprofit to begin with, only to transform to for-profit status once revenues start flowing in.

The big picture: Many nonprofit entities, especially universities and hospitals, have commercial revenues running into the billions of dollars.

  • Large international companies like Novo Nordisk, Bertelsmann, Ikea and Tata are run by charitable foundations; U.S. companies like Patagonia, Hershey, and Bloomberg are also moving in that direction.

The other side: OpenAI effectively pivoted to for-profit status in 2019, and continues to move away from its nonprofit founding principles.

  • By the time Musk filed his lawsuit on Friday, the list of for-profit entities named as defendants included OpenAI LP, OpenAI LLC, OpenAI GP LLC, OpenAI OpCo LLC, OpenAI Global LLC, OAI Corporation LLC, and OpenAI Holdings LLC.

How it works: All those for-profit companies are effectively piggy-backing on the tax-deductible donations made by Musk and others in the early years.

  • "If this business model were valid, it would radically redefine how venture capitalism is practiced in California and beyond," Musk says in his complaint.
  • If early-stage investments can be funded using pre-tax dollars, then "competing against an entity employing the new OpenAI business model would be like playing a game of basketball where the other team's baskets are worth twice as many points."

Between the lines: That model might not be quite as new as Musk implies. The biggest nonprofit institutions in America are the "eds and meds" — i.e. universities, hospitals, and research institutions that can have billions of dollars in revenue — and that regularly birth for-profit corporations.

The bottom line: Musk is aggrieved that his selfless charitable donations to OpenAI ended up generating enormous wealth for the shareholders of Microsoft and OpenAI's for-profit subsidiaries.

  • Given the permeability of the barrier between for-profits and nonprofits, it's reasonable to expect more such complaints in the future.

Go deeper: How a Silicon Valley nonprofit became worth billions

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Axios Markets is edited by Javier E. David and copy edited by Mickey Meece.