More than five years after the recession, a large proportion of recent college graduates is still in jobs that don't require college degrees, and starting salaries for a broad range of occupations are stuck in the doldrums.
A study by the San Francisco Federal Reserve shows that recent college graduates 21 to 25 years old have had worse luck with pay than full-time workers in general.
Since 2007, those with newly minted college degrees have seen pay levels hardly budge. Median weekly pay for the grads is only about 6 percent higher than just before the recession, or
The dismal pay level must be discouraging in light of typical household expenses and suggests why so many recent graduates are slow to move out on their own. According to a Federal Reserve report on the "Economic Well-Being of U.S. Households" released in July, the average renter pays
Still, while recent college graduates continue to be punished harshly by a weak economic recovery, San Francisco Fed researchers
But while the general trend seems similar to the past, the extremes in this cycle are unique and discouraging to workers.
Pay for a wide range of working Americans has failed to bounce back as expected. Personal income for July increased just 0.2 percent -- a disappointingly low number that, along with other jobs data, has prompted Federal Reserve Chair
Hobijn and Bengali noted that wage growth has been poor across occupational groups for recent graduates. Even popular career areas such as management, business and finance, which paid college graduates well in the past, "have seen particularly low wage growth."
In addition, research by the Federal Reserve Bank of
"Recent graduates are increasingly working in low-wage jobs or working part-time," said New York Fed researchers
Since the recession, people with college degrees have fared significantly better with jobs than those who had high school diplomas. But a college degree alone doesn't convey the full picture.
There was a difference between college graduates who had been working for a while and those seeking their first jobs after graduation. In 2010, the unemployment rate for college graduates was 5 percent -- far less than the 16 percent unemployment rate for young workers without degrees. But unemployment for recent college graduates was more severe than for college graduates generally, peaking at 7 percent.
Underemployment has also been a problem. During the 2009-2011 period, New York Fed researchers found that about 56 percent of people who had just graduated ended up in jobs that didn't require a degree.
That trend should ease over time,
But having to take inferior jobs has been an increasingly troubling trend for college graduates. In the 2000s, about 16 percent of recent graduates were working in part-time jobs. In 2011, with the jobs recovery still anemic, about 23 percent of recent college graduates were in part-time jobs.
Among recent college graduates, unemployment has been low, at 3 percent for health majors and 4 percent for education majors. Architecture and construction majors are at 8 percent, and liberal arts and social science majors are at 7 and 8 percent, respectively.
Seventy-five percent of recent graduates with engineering degrees are working in jobs that required a degree. Yet, in the low-pay leisure and hospitality area, only 33 percent were working in jobs that required degrees. And among those who majored in communications, liberal arts, business and social sciences, only 40 to 45 percent were in jobs requiring degrees.
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