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College Graduates Face Weakest Job Market in Two Decades |
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Tuesday, 30 May 2006 |
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College seniors graduating this Spring face a double whammy of high college loan debts and the slowest job market in two decades.
The labor market for young college graduates, ages 25 to 35, is slowly improving but remains much weaker than before the last recession in 2001. It has been 20 years since young college graduates have experienced employment rates as low as those of the past five years, according to the Economic Policy Institute. At the same time, the College Board reports the average college graduate leaves school with $15,000 to $25,000 in student loan debt. Credit card debt and going to graduate school can add significantly to that debt load. Graduates who earn at least a bachelor’s degree, and in some cases an advanced degree, would be expected to fare better than those without college degrees because demand for their skills should insulate them from labor market fluctuations, EPI economist Elise Gould says. But real hourly wages of young college graduates have picked up only slightly over the past year after declines for three years in a row. Their hourly wages in 2005 averaged $23.10, up from $23.03 in 2004 but still below the 2001 level of $23.77. The failure of wages to recover is part of the slow employment growth in the recovery from the recession, which ended in 2001, Gould says. Compared with the last “jobless recovery” of the early 1990s, employment rates of young college graduates have fallen farther and failed to bounce back. Unless employment rates climb steadily, picking up the slack in the labor market, these young workers will lack the power to bid up their wages very much, Gould says. |
