Economic Recovery Still Slow For Recent College Grads
What’s the Latest?
Despite the many indications that the post-recession gloom is finally dissipating, there are still markets and demographics for which recovery has been excruciatingly slow, if not completely absent. One such demographic is recent college grads. In 2012, a full five years after the initial economic downturn, over 50% of recent graduates were unemployed. Silver linings have been few and far between for those grads who have found employment. Chris Kirkham of The Los Angeles Times reports wage growth for recent college graduates is about half of that as the rest of the workforce, according to a study conducted by the Federal Reserve Bank of San Francisco.
What’s the Big Idea?
According to the Fed, median earnings for recent college grads rose only 6% between 2006 and 2013. Kirkham notes that this type of disparity has popped up in previous recessions, but points to the study’s declaration that this current gap is unprecedented in its size and tenure. The Fed report also showed this disparity is not just the result of more graduates entering lower-paying fields:
The study concluded that college graduates are going into the same fields as before the recession, but that wage growth has been slow. In the two most popular categories for recent graduates — professional occupations and management, business & finance — there was only a 2.6% growth in median earnings since 2007.
So what can recent graduates do? Unfortunately, the gap doesn’t show signs of shrinking anytime soon. Competition for entry-level positions is still high despite recent drops in unemployment. There also exists a sort of unspoken understanding among business owners that they can get away with paying young people less than their older peers. Until something radical causes that culture to die, young and educated workers should prepare for the short end of the wage-growth stick.
Keep reading at The Los Angeles Times
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