Congratulations to the college Class of 2016. Not only are you mere days away from graduating (or maybe you already have), but you’re blessed with good fortune: This is the best time to enter the job market in close to a decade.
Spare a thought for your older brothers and sisters, though. Many of them were far less lucky.
A couple of weeks ago in this column, I discussed a report from the Economic Policy Institute, which argued that people finishing school this spring still face tough economic times. That’s certainly true for new high school graduates, whose unemployment rate remains well above prerecession levels. And it’s true up to a point for new college graduates, more of whom are being forced to settle for part-time or low-level jobs than before the recession.
But overall, the situation greeting new college graduates looks comparatively rosy. The unemployment rate for recent graduates — those ages 21 to 24 — is down below 6 percent, close to where it was when the recession began.1
According to Current Population Survey microdata, the unemployment rate for new college graduates over the past 12 months has averaged 5.7 percent, versus 5.4 percent in the 12 months leading up to March 2008.
New graduates’ wages are rising faster than those of most other groups; the typical recent college graduate earned $13 an hour in the first three months of this year, up 50 cents an hour from a year earlier.
The best evidence that the job market is improving for young graduates: More of them are choosing to participate in it. The share of young graduates in the labor force is rising after years of decline.
The story is different for Americans just a few years older, those who graduated from college during the worst of the recession in 2008 and 2009. Their unemployment rate topped 9 percent in the aftermath of the recession, and the figure would have been higher if so many hadn’t avoided the job market entirely by staying in school or living with parents. Those who did find jobs were often stuck working part-time or in low-wage positions that didn’t require a college degree. Worse, the slow improvement of the labor market meant many young graduates remained underemployed for years; research from the Federal Reserve Bank of New York has found that the underemployment rate among recent graduates has only recently begun to improve. Graduates lucky enough to find stable work often missed out on the kind of early-career job transitions that ordinarily lead to both better wages and a better professional fit.
That slow start left lasting scars. The typical recession-era graduate with a full-time job — one of the lucky few, in other words — earned approximately $7,000 less in the first six years of work than someone who graduated just a few years earlier.