The most appalling error was a comparison of (a) lifetime earnings of college graduates minus tuition versus (b) lifetime earnings of high school graduates. So many errors permeated this story that it is impossible to explain them all, but here are the biggest (and keep in mind we're talking about a one minute clip here). Let's look at the smaller items before I point out the most egregious of the errors.
- The story used the earnings of an average college graduate, but tuition from an elite private institution (whose graduates will earn more than the average college graduate).
- The use of the average earnings of college graduates was incorrect, since the earnings of those who have MORE than a college education would have also needed to be taken into account.
- The calculation did not account for time value of money (interest, inflation).
Each of these errors changes the magnitude of the difference between the high-school number and the college number but does not have a huge impact. What most shocked me about this calculation was that it double-counted the effect of college tuition, and this DOES have a huge impact on the calculation - to the extent that it makes the decision come out the opposite of what they were saying in the story.
What they did was subtract tuition from the college graduates's earnings - fair enough. But then they also took the tuition money and projected it at (an unreasonably high) interest over the working lifetime of the high school graduate. You can't have it both ways! ARGH!
