College Grads Control 53% of Spending

There's something new in the 2012 Consumer Expenditure Survey. The Bureau of Labor Statistics updated the way it accounts for educational attainment. Rather than classifying households by the educational attainment of the reference person (the person responding to the survey), the bureau has adopted a broader approach. Now households are classified by the highest level of educational attainment of any member of the household.

"A major reason for this change is that the highest level of education attained by any member of the consumer unit more accurately reflects the income and spending patterns of a consumer unit than does the education level of the reference person only," explains the BLS. This seemingly minor methodological change is a demographic blockbuster. Take a look...

• More college educated households The percentage of households in which any member has a bachelor's degree is much larger than the percentage in which the reference person has a bachelor's degree (38 versus 30 percent).
• Fewer households with little education The percentage of households without any member with some education beyond high school is much smaller than the percentage in which the reference person has no education beyond high school (30 versus 38 percent).
• Less spending by the less educated Under the new system, the least educated spend less. Here is the comparison, all in 2012 dollars: The spending of households in which no member had a high school diploma was $25,000 in 2012, much less than the $31,000 spent in 2011 by households in which the reference person did not have a high school diploma. The spending of households in which no member had more than a high school diploma was $35,000 in 2012, well below the $41,000 spent in 2011 by households in which the reference person had no more than a high school diploma. The new classification system barely changes the spending of households with college graduates, however. Households in which the reference person had a bachelor's degree spent $70,329 in 2011. Households in which any member had a bachelor's degree spent  $71,151 in 2012.
• College grads control nation's spending The new classification system reveals the importance of the bachelor's degree to the U.S. economy. Households in which at least one member has a bachelor's degree control 53 percent of all household spending. Under the old classification system, they controlled a smaller 42 percent. Conversely, households in which no member has more than a high school diploma control only 19 percent of aggregate household spending, down from 28 percent under the old system. 

Households with college graduates account for $3.4 trillion of the nation's $6.4 trillion in consumer spending. A bachelor's degree is an even bigger deal than we thought.