it’s a tough job market for recent college graduates

This Saturday is commencement at CSU. It’s a time to celebrate and unleash our students into the “real world.” Although I don’t want to put a damper on their achievements, the Economic Policy Institute just released a report showing the difficult job market that awaits. The following charts are from that report.

Unemployment and underemployment for 21-24 year olds with a college degree and not currently in school

Currently, the unemployment rate for college graduates between 21 and 24 years old is 9.1 percent. The underemployment rate–which is people working part-time but wishing they had full-time work is 19.1 percent. (This does NOT include people who are not fully utilizing their education/skills in their job (e.g., the accountant working as a barista)). Both rates are up dramatically since the start of the recession, and are indicative of the continued weakness in the labor market.

While this is certainly not good news, and may lead many to question the value of a college degree, it is also true that college grads 21-24 years old are faring much better than their peers with only a high school degree. The following chart tracks their employment situation. Here, we see the unemployment rate is an astounding 31.1 percent, and 54 percent(!) are underemployed.

Unemployment and underemployment for 21-24 year olds with high school degree only

Finally, I have talked a lot about the higher wages that college grads receive than those without a college degree. Here is the most recent comparison, showing college grads in this age cohort have 77 percent higher hourly earnings.

Average hourly wages for 21-24 year olds, by educational attainment

Obviously, the situation is far from ideal. But a 4-year degree still leads to lower unemployment and higher wages….if the (stagnant) returns to its (increasing) cost is still enough is a question needing more study.

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