University degrees do not always lead to higher wages.

A new study shows that the ranks of low-wage earners with a master’s degree or PhD has soared over the past two decades.

Of the employees with a MA or PhD, 12.4 per cent were low-income earners in 2014 compared with 7.7 per cent in 1997, according to a study by the Centre for the Study of Living Standards, an economics research group.


The study showed that the percentage of low-wage earners grew across all levels of education but increased at a higher rate among the most educated.

There was a 60-per-cent increase in low-wage incidence among employees with a MA or PhD from 1997 to 2014. Meanwhile, over the same period, there was a 20-per-cent increase among low-wage workers with a bachelor’s degree, according to the study.

Employees with little education or some high school still represent the largest proportion of people who fall in the low-income group. (Of the workers with zero to eight years of education, 50.7 per cent were low-income earners in 2014 compared with 44.6 per cent in the late 1990s.) But what is surprising is the percentage growth among employees with top degrees.

“Increased educational attainment should be lowering the incidence of low wages over time. This, however, is not showing up in the actual incidence of low wages,” said the study authored by Jasmin Thomas, an economist. “This suggests that the demand for well-paying jobs has outpaced the supply.”

The survey looked at all employees between the age of 20 and 64. It classified a low-income earner as someone who earned less than two-thirds of the median hourly wage for full-time workers.

The study also found that the prevalence of low-income earners was the highest in the accommodation and food-services sector, followed by retail trade and agriculture.

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Rachelle Younglai
The Globe and Mail
Published Wednesday, Jul. 13, 2016 12:00AM EDT
Last updated Wednesday, Jul. 13, 2016 8:17PM EDT