How do we Calculate College ROI?

In conjunction with Bloomberg BusinessWeek, PayScale recently released our third annual College Return on Investment (ROI) Report, which evaluates the financial return for a bachelor's degree from 853 U.S. schools.

With this study, we hoped to lend our voice to the related debates around the looming student debt bubble, tuition costs rising faster than inflation, and the increased frequency with which recent college graduates are unemployed and underemployed.

The general conclusion of the PayScale College ROI Report is there is high variability in the return on investment in education and that a college education doesn't always pay.

In addition to a debate, our report seems to have spurned numerous critiques of our methodology that have resulted in false interpretations of our methods.

We stand behind our methodology and are happy to explain it. We also welcome feedback to continue to improve the report. Our goal is simply to arm prospective college students with the information they need to make informed choices about college. We recognize that the potential financial benefits of college are not the only benefits. However, they are a significant factor, and it is the piece of the equation where we are qualified to offer insight. College – whether and where to attend – is a difficult decision, and we believe anyone considering it should have all the information available to make the best choice for them.

In this blog post I will cover the basics of our methodology for the College ROI Report, and in the following post I will address the specific criticisms we’ve heard about the College ROI Report.

Equal Pay Day Is Misleading

For those of you who are interested in gender pay gaps, you likely know today (April 17th) is Equal Pay Day. This date "symbolizes how far into 2012 women must work to earn what men earned in 2011," according to the National Committee on Pay Equity.

However, this statement is misleading and construes the facts about gender pay differentials. Yes, it is true that the average pay of female workers is less than the average pay of male workers. In fact, according to the Bureau of Labor Statistics (BLS), median full-time female workers' pay is only 81 percent of median full time male workers' pay.

The issue with these generic statements is they do not control for differences between the two genders that can account for much of this pay gap. Together with the New York Times Economix blog, PayScale took a deep dive into gender pay differentials to see what differences do exist once you control for outside factors. Continue reading after the break to see what we found.

Talking Points for Republican Primaries in Michigan and Arizona

The Republican primaries in Arizona and Michigan take place on February 28th. In trying to win over the primary voters, the candidates will need to address economic concerns of each state's residents. Here at PayScale, we researched the economic "health indicators" of each state by examining wage trends, labor demand and unemployment.

What did we find? It can be summed up in two statements:

1. Don't just blame Obama -- The economic health indicators in both Michigan and Arizona have shown significant improvement in recent quarters and thus spending time criticizing President Obama's economic policies may not impress local populations.
2. Promote a vision -- A better approach would be to highlight recent successes and present a plan for increasing them at a better and faster rate. Namely, the candidates should focus on how they would continue to bring jobs to the area and improve local economies.

Continue reading after the break if you want more details on the economic health indicators we researched.

Top Jobs for Veterans

Back in 2011, Obama promised the complete withdrawal of troops from Iraq and a significant reduction of troops in Afghanistan by year's end, both of which would cause a significant influx into the U.S. labor market for 2012. Where are these veterans going to go? What type of jobs are they suited for? And, what industries are even hiring in today's hurting economy?

We decided to address these questions by looking at what current veterans are doing in hopes of providing advice to those coming home from the Middle East. Continue reading after the break to see what we found.

Are you a veteran and curious about jobs that are available to you with your given set of skills and experience? Visit our PayScale Research Center to discover what people like you are doing.

Romney Earned 500 Times the Average Worker in 2010

Republican presidential hopeful Mitt Romney released his 2010 tax returns yesterday and America learned he paid an effective tax rate of 15 percent on $21.6 million of income. Slate took this information and put an interesting spin on it: "How long would it take the GOP candidate to earn what you made in a year?" It allows you to compare your own annual income to Romney's.

Being the salary experts we are at PayScale.com, we decided to take some common American jobs and utilize the calculator on Slate's article to show the disparity between Mitt and the average American worker. In addition, using the tax rate calculator provided by CPA Site Solutions, we will also show the estimated effective tax rates paid by these average American workers.

Are you an average American worker and wondering if you are earning what you are worth? Find out with a free PayScale Salary Report.

Trends in US Wages: The PayScale Index

Today we launched our fifth release of The PayScale Index, which tracks changes in the price of labor since 2006. And for the first time since 2008, wage increases are being seen across the board.

Previously, wage growth winners were typically in just high-tech and energy industries, while workers in most other industries experienced no growth or even a loss in wages. However, the tides have turned as even workers in previously failing industries, such as construction and manufacturing, are seeing wage increases.

In this post I will look deeper into the wage trends experienced by different industries, job families and cities. These wage trends are useful for individuals to understand how overall market prices for broad labor markets are changing on average, but they won't define your individual market price. To find out what you are worth given your job title, experience level, educational background and numerous other factors, take the comprehensive PayScale Salary Survey.

CEO Pay vs. Typical Worker Pay

We recently released an insightful bit of data that looks at the ratio of pay for Fortune 50 CEOs to the pay of employees at their respective companies. The results are unsettling -- on average the Fortune 50 CEOs earn 213 times more than their workers.

Who tops the list for the biggest ratio and which CEO earns pay closest to their employees? See the answers below...

Trends in Tips

Tips are a way of life for many service industry jobs. In fact, for some jobs tips make up over 50 percent of a worker's total take-home pay. During tough economic times these workers often suffer from a decrease in their tips, both due to a decrease in consumerism and to a decrease in generosity.

This is exactly what we found in our Tipping Study in 2009 -- the year after the beginning of The Great Recession, tips on average fell. However, the opposite is often true during good times. Tips rise as consumers feel their budgets loosen, causing both an increase in consumerism and a potential increase in generosity.

Today PayScale released our sixth annual Tipping Study, which highlights over 90 jobs that receive tips, the typical amount of these tips, the percent of total take-home pay from tips and the frequency of tips.

Do you work in a job where pay is dominated by tips and curious about how your pay compares to others like you? Find out with a free PayScale salary report.

Time to Ask for a Raise? What the PayScale Index Says

PayScale recently released the Q3 2011 PayScale Index. The PayScale Index tracks pay trends by location, industry and job category. A salary index that says how much pay has changed in the last year seems like a great source for figuring out if you should ask for a raise. But, how should you use it?

The PayScale Index is part of what you need to ask for a salary increase, but not everything. In this post, we will discuss how to figure out whether you are due a raise.

Before you can ask for a raise, you need to know what you are worth. Find out with a free PayScale salary report.

Recent College Graduates' Pay Down in 2011

As part of the research for the 2010-2011 PayScale College Salary Report, we looked at the pay trends of recent college graduates and found startling results.

With the unemployment rate for college graduates at 4.3% in August, less than half the national average, you would think the strong demand would translate into higher wages.

While the graduates of some schools continue to bring in the big bucks, and overall earnings of bachelor's graduates are substantially higher than high school grads, the data show that all is not well in the market of recent college graduates.

College degree or not, are you being paid what you are worth? Find out with a free PayScale salary report.