Despite the fact that the nation’s unemployment rate — recently reported at 6.6% in January — has recently inched closer to zero, the fact remains that we’re currently living in a difficult job climate. That notion is reinforced when considering that the labor participation rate — meaning those employed or those actively looking for work — is the lowest it’s been in 35 years at 63%.
Such news is perhaps particularly troubling for recent college graduates who are trying to dig themselves out from under, in many cases, crippling debt. Recent figures suggest that the average cost for an in-state public college this academic year stood at $22,826. The average price tag associated with a year of studying at a private college was nearly twice that at $44,750.
Paying off Debt
Employment is in the best interest of these recent graduates who are saddled with high debt and don’t want to spend their lives paying down the interest. In 2012, about 70% of all graduates had an average of $29,400 worth of debt when they left college, an increase from the $26,000 that students were left with the year prior. Because of this, many of them are snatching up any old job they can find — even if the pay is low and they are overqualified for the position.
According to a recent report issued by the Federal Reserve Bank of New York, college graduates find themselves in a significantly bleaker job market than they have in the past 20 years. While such individuals generally have a buffer period between graduation and employment, that period has expanded, and many of them have settled on taking lower-paying jobs or part-time work in order to start bringing in any kind of salary.
While many experts believe that the economy is recovering, the report illuminated the fact that the current economic conditions a far from their pre-recession levels.
Choosing the Right Major
The silver lining in all of this news is that graduates in fields that provide technical skills are faring better than their English major counterparts. According to the report, graduates with healthcare- or education-related degrees are experiencing unemployment rates of three and four percent. On the other hand, their peers who graduated with degrees relating to architecture, liberal arts or social sciences are battling with unemployment rates in the 7%–8% range.
In addition to the above figures, the Fed’s report indicated that the underemployment rate for this group — that is, the percent of people who are employed part-time and wish to have full-time jobs — swelled to 44% in 2012, compared to 34% in 2001. Due to the difficulties these recent college graduates are experiencing, many of them are turning to employment in areas like bartending, retail and general restaurant work in order to bring home some bacon.
And that means that those who traditionally would fill such jobs are having a hard time finding employment themselves. According to a separate survey of 500,000 Americans between the ages of 19 and 29, 63% of those who were employed full-time had college degrees. But the majority of these American's had jobs like merchandise displayer, sales representative, assistant merchandise manager and health policy research assistant.
Don't Give Up
Despite the relatively bleak outlook of all these statistics, the Fed indicated that college education was still a valuable asset. According to the Bureau of Labor Statistics, the median income of college graduates was $57,770 in 2012 compared to $27,670 for those jobs requiring merely a high school degree.
What are your thoughts on college education in today’s difficult economic climate? Sound off in the comments below!