The job market for new college graduates is healing, but very slowly. The unemployment rate for new college grads was 7.4% in the 12 months ending November 2011, just the same as a year earlier (by our definition, ‘new college graduates’ are people aged 21-26 with a bachelor’s only). That’s up from 3.9% in 2007, according to our tabulations of the Current Population Survey.
And for today’s college grads, a lack of jobs is not the worst of their problems. They are getting the short end of the stick, and the stick is just getting shorter as college costs creep ever higher. Over the last decade, the average amount of student debt for college graduates increased by a staggering 25%, in constant dollars. Yet the reality is this is not surprising, given how tuition costs have skyrocketed in the last ten years. According to the Department of Education, tuition costs and fees across all four-year colleges and universities increased by 32 percent from 2000-2010, with public institutions showing an average increase of 40 percent, all in constant dollars. Families are struggling to keep pace, which lead to two-thirds of 2010 college grads taking on debt before they even finished school.
What’s more, as student debt for young college graduates becoming a bigger burden, their real wages are falling. Over 2000-2010, average wages for full-time workers aged 25-34 with only a Bachelor’s degree fell by 15% percent, after adjusting for inflation. The same jobs their peers got just ten years earlier are paying less. So, just as college is getting more expensive, graduates are less able to pay for it.
This is an inconvenient truth that cannot be wished away. College grads are an important segment of the advanced skill workforce that we are relying on to get America moving again. Instead we find too many them living in tents, spending valuable time wondering how Adele could feasibly “set fire to the rain” instead of developing the next cancer treatment, the next manufacturing technology, or the next software designed to protect America’s borders. If they can’t find work, then where does that leave the rest of us? Perhaps we’ll all be living in tents, playing Hacky Sack and Frisbee, sooner than we think. Like it or not, this truth is here, and until we address it college grads will only become more frustrated and more disconnected. With good reason.
Read more on the debt burden facing today’s college grads: The Payback Stress Index: A New Way to Measure the Pain of Student Debt.
