October 16, 2020

ASU white paper quantifies benefits of people who earn degree through Starbucks College Achievement Plan

As the coronavirus pandemic upends the economy, one group of workers has suffered fewer job losses and rebounded faster — those with a bachelor’s degree. 

Data from the U.S. Department of Labor Statistics show that when pandemic-related unemployment peaked in April, people who have earned a four-year degree had an unemployment rate of about 8%, which then dropped to 4% in September.

Meanwhile, people with only a high school diploma had a 17% unemployment rate in April, dropping to 9% in September. Those with some college but no degree went from 15% unemployment in April to 8% in September.

Arizona State University President Michael Crow pointed out the employment statistics and reiterated the value of a college education in a recent letter to stakeholders.

“Higher levels of education enhance the ability of workers to participate in and experience growth from the innovative business practices developed during times of massive social and economic change,” he wrote.

“Increased access to high-quality education provides benefits of consequence at every level: individual, community, state and society.”

While the pandemic is an unforeseen shock to the economy, the trend mirrors previous economic downturns. People with a bachelor’s degree fared better during the peak months of the economic recession, with nationwide unemployment for them hovering around 5% during 2009 and 2010. Unemployment rates for people with only a high school diploma hit about 10% during that time, while those with some college but no bachelor’s degree had unemployment rates of around 8%.

And degree holders have more than a sturdier job outlook. Economists have long been able to objectively measure the value of a college degree in variables such as increased lifetime salary, better health and even a higher likelihood of volunteering.

U.S. Census data show the average 2019 salaries for educational attainment:

  • Attended high school but did not earn a diploma: $29,082.
  • High school graduate: $39,371.
  • Some college but no degree: $42,808.
  • Associate degree: $48,687.
  • Bachelor’s degree: $73,163.
  • Master’s degree: $93,092.
  • Doctorate: $140,337.
  • Professional degree: $152,703.

Last year, three ASU economists produced a white paper that quantifies the benefits of people who earn a college degree through the Starbucks College Achievement Plan. Since 2014, more than 4,700 Starbucks employees, called partners, have earned degrees through ASU Online, getting reimbursed for their tuition every semester.

The three authors are Kent Hill, research professor and principal research economist in the Seidman Research Institute at ASU; Dennis Hoffman, professor of economics who serves as the university economist and director of the Seidman Research Institute; and Tom Rex, associate director of the Center for Competitiveness and Prosperity Research at ASU and manager of research initiatives in the Office of the University Economist at ASU.

 Their calculations showed:

  • The net lifetime benefit in cost savings and enhanced earnings for a Starbucks partner who entered the Starbucks College Achievement Plan at age 18 is about $500,500. Those who started at an older age would have a lower lifetime benefit because they have fewer working years after the degree is earned.
  • People who earn a degree through the program avoid up to $12,000 in student loan interest. 
  • Assuming there are 25,000 graduates of the program by 2025, the benefit to society in increased tax revenue would be $2.1 billion. If you assume that one-third of those graduates would have earned a degree even without the Starbucks program, the increased tax revenue would be $1.4 billion.

For one ASU student, the pandemic has brought challenges but also a renewed sense of the importance of working toward a degree.

Najja Meeks

“There’s no reason to stop your momentum,” said Najja Meeks, a Los Angeles resident who has been pursuing a degree in organizational leadership through the Starbucks College Achievement Plan since 2018.

“If someone has been laid off or their industry is something that is going to be affected once the pandemic is over, this is a great opportunity to consider making a pivot in their career and learning new skills.”

Meeks was a stay-at-home mom when she began working at Starbucks. She used to open the store every day with a co-worker who was in the Starbucks College Achievement Plan. 

“I heard a lot about his frustrations and triumphs,” she said. “And I thought, ‘When else will I go to school?’ I wanted something more for my family.”

Meeks, who had been away from college for 10 years, started classes in fall 2018, going straight through summers. When the pandemic hit, her store closed and she moved to a drive-thru location. But her work hours increased at the same time her three children were at home more. So she made the tough decision to withdraw from a class.

“A lot of things had changed in my life and I thought I would save myself some sanity, even though I knew doing so would add time to completing my degree,” said Meeks, who also decided to add a focus in project management to her degree program.

While learning online was new to Meeks when she started her degree through ASU Online, her experience with it has become an asset. 

“My children are also doing online learning, so being an online student myself really helped me to help them accept their new class life,” she said. “It gave me a lot more patience.”

Meeks expects to graduate in 2021 and is anticipating a career in project management or human resources. She’s confident even as the economic outlook is uncertain. 

“Before I started at ASU and before I had children, I was in a different field. I used to be an actor,” she said.

“I never saw myself pursuing this type of degree, but as you get older, your priorities and your interests shift.”

Top photo: Susana Monica (right) and Kelsey Laubie stand to be recognized as Starbucks scholars during the College of Health Solutions convocation at Wells Fargo Arena on May 12, 2017. Photo by Deanna Dent/ASUNow

Mary Beth Faller