The Washington Post reported on the economic prospects of the Class of 2016, saying that while the economy has improved, wages are still down for recent graduates, and the mounting debt thrust onto students forces many to take jobs with poor advancement opportunities.
In a May 2 article for The Washington Post’s Grade Point education news blog, reporter Danielle Douglas-Gabriel reported that while hiring continues to improve for recent college graduates, job prospects are still poor, and the increasing debt burden faced by graduates forces them to take jobs -- if they can find one -- that may have no chance of wage growth or career development. The Post highlighted findings from the Economic Policy Institute (EPI) showing that nearly seven years after the end of the Great Recession, recent graduates still face many employment hurdles, namely lower pay and higher amounts of student debt.
While the unemployment rate for recent graduates is “only a tenth of a percentage point” above pre-recession levels, the Post wrote, “nearly 13 percent of young college graduates are currently underemployed, compared to 9.6 percent nine years ago.” As wages are still low for recent graduates, student debt burdens continue to climb and the Post reported that it is likely “the average Class of 2016 graduate will leave school with five-figure debt.” The piece said student debt burdens “likely will force graduates to accept jobs without long-term prospects for career or wage growth.” These and other factors spurred EPI to conclude that new graduates likely will earn less in the next decade than those who graduated before the recession.
EPI also found that prospects for recent graduates are bleaker for women and African-Americans, a point Media Matters has also highlighted. According to the Post, the national average unemployment rate for college graduates is 5.6 percent, nearly double the 9.4 percent unemployment rate EPI found for black college graduates. Since 2000, the gender gap for recent graduates has widened; female graduates today make 6.8 percent less than their counterparts did in 2000 compared to male college graduates, who now earn 8 percent more than male graduates did 16 years ago.
From The Washington Post:
If the last few years are any indication, the average Class of 2016 graduate will leave school with five-figure debt. That albatross likely will force graduates to accept jobs without long-term prospects for career or wage growth, according to a new study from the Economic Policy Institute. Analysts at the think tank say that despite the rosy overall employment picture, graduates actually face a tougher labor market than they would have before the 2008 recession. Degree-holders, they say, still contend with elevated levels of unemployment and underemployment, and a large share are neither employed nor pursuing advanced degrees — in other words, they are idling.
“Although there have been small improvements, there is still a lot that’s problematic about this economy for young college grads,” said Teresa Kroeger, a research assistant at EPI who co-authored the study. “Wages are still performing poorly. And we see still disparities between genders and racial groups.”
Analysts at EPI say unemployment for young black college graduates hovers at 9.4 percent, higher than the peak unemployment rate for young white college grads during the recession. And gender wage inequality has grown, with male college grads earning 8 percent more this year than in 2000, while young women with degrees earned 6.8 percent less than in 2000.
Perhaps the most troubling prediction from the institute posits that newly minted grads as a whole likely will earn less and have more spells of unemployment during the next 10 to 15 years than if they had graduated before the downturn.