Newest College Grads May Find Unemployment Easing a Bit
It was one of the most iconic symbols of post-recession America: the college graduate working as a coffee shop barista, carrying a mountain of student debt and a bachelor’s degree into a job that ordinarily would have required only a high school education. Almost half of recent grads, in fact, were in jobs that didn’t match their experience.
But now, economists say, the tide is turning. Members of the Class of 2015 have the best chance since the recession of not only finding a job, but also landing one that capitalizes on their time in school. The number of open positions that require a college education has spiked over the past year, according to several analyses. Meanwhile, so-called underemployment for freshly minted grads has dropped after rising almost unabated to a record high last year.
It’s one tangible sign of the dramatic plunge in the unemployment rate – to 5.4 percent from 7.6 percent two years ago – and it has big implications for the economy beyond the college kids (and their parents) who had begun questioning the value of their diplomas. The housing market could benefit as students fly from the family nest. Wages could rise amid increased competition for workers. And those with less education could get a chance to move up.
“We know a lot of people took jobs just to be able to make ends meet over the last few years, rather than finding their best fit. That’s not just bad for those individuals – that’s bad for the economy as a whole,” said Tara Sinclair, a professor at George Washington University and chief economist at job site Indeed.com. “It filters down the line. .â€‰.â€‰. It means that everybody is not at their most productive.”
University of Maryland senior Evelyn Xin Yu Xu fielded eight inquiries from interested companies this month alone. She fended them off because the 21-year-old already has a job in place after she graduates this weekend.
It happened over Twitter. Scope Group, a recruiting firm in Arlington, Va., spotted Xin Yu Xu’s tweets about an industry conference in the fall. That led to an interview, an internship and, eventually, a job offer.
“My goal once I got into college, from the very beginning, was ‘have a job lined up BEFORE graduation,’â€‰” Xin Yu Xu wrote in an e-mail. “It’s exciting to know all my hard work has paid off, and it’s clear to people.”
College-educated workers have fared better than most in the recovery. Those without a diploma have had a harder time finding any type of work. Many job-seekers have been so discouraged by their prospects that they simply quit looking. The number of part-time workers who want full-time jobs is still high.
But a bachelor’s degree doesn’t come with guarantees. Even among college graduates, the jobless rate is significantly higher than it was during the boom years. The market is tougher for those fresh out of school than for those with more experience. An analysis by the Federal Reserve Bank of New York found that the unemployment rate for recent graduates is just over 5 percent, compared with 2.7 percent for college graduates as a whole. The rate of underemployment, or people working in jobs below their skill level, fell substantially over the past year but still stands at about 45 percent.
Yet the brightening outlook for college graduates is already starting to ripple through the economy. Young adults who moved back in with their parents after graduation are striking out on their own, government data suggests, a potential boon for the housing market. More companies are raising their starting salaries or offering signing bonuses, according to a Michigan State University poll, erasing the earnings penalty that can last years for students who graduate into a weak economy.
And people up and down the economy are finding work that better matches their education: More college graduates moving into high-skill jobs opens the door for those with less education to move up behind them.
A study by the Federal Reserve Bank of Kansas City released this month found that from 2012 to 2014, college graduates were hired into middle-skill jobs such as sales and administration more often than those without a degree. But over the past year, the numbers shifted. Now, it’s the less-educated workers who outnumber the graduates in those positions. And employers are increasingly waiving a bachelor’s as a requirement for high-skill jobs as well.
“There are going to be more opportunities,” said Jonathan Willis, one of the report’s authors and vice president at the Kansas City Fed. “When we had a huge pool of unemployed people, firms could go grab those with skills and opportunity. They’re now looking at people of all education levels.”
George Mason University graduate Amanda Magill wasted no time jumping into the job market. Three days after walking across the stage at Patriot Center to receive her diploma, she returned to the Fairfax, Va., campus for an hour-long workshop on rÃ©sumÃ© writing. The next day she was back again to sell her skills at a campus job fair.
Magill, a 22-year-old communications major, said she is confident that she will be able to find work related to her field – and is willing to wait for the right position to open up. Though she had considered applying to graduate school, Magill said she thought the job market was strong enough for her to wade right in with just a bachelor’s.
“I want to see what’s out there before I resign myself to three more years of schooling,” she said.
Kelley Bishop, director of the University of Maryland’s career center, said many students have internalized the lessons of the Great Recession. Their formative years have been marked by economic upheaval, training them to be particularly aggressive in their job hunt.
“We’re in that, dare I say, sweet spot where the job market is getting better but students are still really hungry,” he said.
This article was written by Ylan Q. Mui from The Washington Post and was legally licensed through the NewsCred publisher network.