Studer Community Institute

State report claims UWF grads earn less, but closer look at data suggests otherwise

March 16, 2015
/ Rick Harper
/ education

In 2012, Gov. Rick Scott signed a law requiring that an Economic Security Report be published annually by Florida’s Department of Economic Opportunity. Sen. Don Gaetz authored the bill with the intent of providing families with the information they need in order to make the best choices about education alternatives. It describes salaries, employment prospects, typical student loan levels and other information pertaining to various programs of study at Florida’s public education institutions. The good news is that University of West Florida and Pensacola State College students graduate with the lowest federal student loan debt of any schools in their respective systems. This is important in an era in which student debt is high and rising. The average federal student loan debt of $4,600 carried in 2011-12 by a UWF student was about 16 percent less than the state average. Students at PSC had an average of $1,395 in federal student loan debt per student. While the Economic Security Report doesn’t provide a statewide median across colleges, it is clear that PSC debt per student is the lowest in the state. Several possible reasons for this relatively low debt come to mind. One possibility is that students in Pensacola are more constrained than students in other parts of Florida in their ability to borrow for education. However, this seems unlikely given that the student loan program is federal rather than local. Another is that the price levels across cities are different and a dollar stretches further in Pensacola than it does in Miami. If a primary purpose of getting a degree is to increase your earning power, then regional differences in affordability matter. The median earnings of graduates with bachelor’s degrees from UWF in the most recent report were $31,684. This is 5.2 percent below the statewide median and ranks us 8th out of 11 schools. But it’s not an accurate reflection of the true purchasing power of wages. It is interesting to note that the two universities with the highest median first-year earnings are Florida International University and Florida Atlantic University, the two Miami-area schools, coming in at $35,632 and $35,040 respectively. UWF’s median is 11.1 percent below the FIU number. “Average wages of graduates one year after graduation” was one of the measures on which UWF got dinged in the new State University System performance metrics. Unfortunately, the new statewide performance funding metrics fail to recognize regional price level differences. The U.S. Bureau of Labor Statistics in 2014 began publishing an “implicit regional price deflator” that allows us to compare price levels across the several hundred different metro areas of the country. Miami, not surprisingly, comes in highest in the state. Compared to a national average of 100, BLS calculated the price level in Miami in 2012 to be 110.7, while the Pensacola price level was calculated to be 99.6. That is, the price level in Pensacola is 11.1 percent lower than in Miami. After adjusting for this difference in the cost of living, UWF’s median earnings are exactly the same as those of the highest-ranked school. In a way, this is the answer to the question, “How much would they have to pay you to live in Miami?” Economics suggests that wages in different metro areas will in fact reflect things such as differences in the cost of living. It is likely that a UWF grad taking a job in Miami will earn more than a UWF grad taking the same job in Pensacola. The same logic applies for the FIU grad. Employers find they have to pay more to compensate for the higher cost of living down south. It is unfortunate that Florida’s new performance metrics system doesn’t account for regional price differences. If it did, UWF wouldn’t be penalized for graduating students who have excellent earning power. Dr. Rick Harper serves as director of the Studer Community Institute, a Pensacola, Florida-based organization that seeks citizen-powered solutions to challenges the community faces. He also directs the University of West Florida’s Office of Economic Development and Engagement in Pensacola.

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State report claims UWF grads earn less, but closer look at data suggests otherwise

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