Skip to comments.Pocket Of Pain For Young Graduates
Posted on 09/07/2006 6:26:29 AM PDT by Hydroshock
Details Buried Deep In Census Bureau Data Show A Sustained Drop In Earnings For 25- To 34-year-Old Grads, To Their Lowest Level Since 1997 Email This Story | Print This Story
Subscribe to BusinessWeek Young college grads are taking it on the chin. That's what the new data from the government show -- and it's not a pretty sight.
On Tuesday, Aug. 29, the statisticians at the Census Bureau released the latest numbers on income and poverty, for 2005. There were plenty of meaty figures, both good and bad, to chew on. On the good news side, median household income rose by 1.1%, adjusted for inflation, the first such gain since 1999. The poverty rate dipped a bit, from 12.7% to 12.6%.
On the bad news side, real median earnings of full-time workers declined, with the earnings of men dropping to the lowest level since 1997. And income inequality widened a bit, with the top 20% of households getting more than 50% of all the income.
Perhaps the most distressing figure was one buried deep inside the detailed tables. It turns out that the median earnings of young college grads, adjusted for inflation, fell by an astonishing 3.3% in 2005. That's on top of similar declines in 2004 and 2003. All told, the earnings of young college grads are down by almost 8% since 2002. [For a related chart, see BusinessWeek.com, 8/29/06, "Young College Grads in Free Fall."]
By young college grads, we mean full-time workers between the ages of 25 and 34, with a B.A. but no advanced degree. These are people who first entered the workforce during the past 10 to 12 years, some during the boom, some during the early years of the bust. What they've experienced over the past several years is an unrelenting downdraft in wages, probably the first sustained decline for college grads since the 1970s.
What's more, many of them have also been stuck on the wrong side of the housing boom. Just coming out of college, they didn't have the savings or the income to buy a house. And with home prices rising faster than their incomes, it's been very hard for them to catch up.
There are signs that the market for the latest crop of graduates coming out of college has improved a bit. But for the group just before them, it's a real rough ride.
Must be even tougher for high school only grads.
I am a high school only grad and retired now. I did ok but always regretted not going to college, envied those who did and blamed no one but myself.
Good luck to all these kids, I'm sure the competition is fierce.
comp sci not being among those...
Yep, we are paying $60,000 to engineering grads with no experience.
Since college has devolved into a 4-year rolling drunken party, it is not surprising that employers are not willing to pay so much for people who have college experience.
Colleges are turning out a worse and worse product, every year. These days, you couldn't flunk out if you tried.
They failed to mention that 1998-2002 grads were WAY overpriced during the Net boom.
What do you call a History Graduate?
Meaningless statistic. Maybe in the last 10 years a lot more kids have gone to college, but in soft majors. So instead of taking a job as a checkout clerk at Walmart right out of high school, these kids are getting 4 years of training and now they have a job as an administrative assistant somewhere. So they make more money than they would have 10 years ago.
BUT, there are now thousands of more graduates, all in soft fields which pay a lot less than what the typical graduate from a science/math/engineering college would make.
By using the MEDIAN income, adding a lot of NEW people at the bottom of the scale PULLS DOWN THE MEDIAN INCOME.
In fact, the media does this all the time. When we had 6.2% unemployment, the median income was HIGHER, because the median income only counts full-time employment.
Now we have 4.7% unemployment, but a lot of those workers got jobs that paid below previous "MEDIAN". They are much better off than they were unemployed, but now they show up as full-time workers, and they pull down the MEDIAN income.
And the way it's worded, you think people are having their wages go down, but NO SINGLE PERSON has their wage go down based on this statistic. The person who graduates today into a MEDIAN income of say 20 bucks an hour isn't the SAME person who graduated in 2001 with a MEDIAN income of 21 bucks.
It's the same trick they use with the minimum wage, when they say people on minimum wage have had their earnings decrease over the last 7 years. But in fact, almost nobody earning minimum wage today was also earning it 7 years ago. It is true that a person taking a minimum wage job today makes less than a person who took a minimum wage job in 1996, but they are different people. Anybody still making minimum wage after 7-10 years must be a really bad worker, but almost nobody is in that situation.
BTW, the same is true of the "living below poverty level". A good portion of those living below poverty in a given year are people who simply don't have a job for that year, but in the next year they get a job. So the democrats scream about how the number of "poor" went up, but in fact it's mostly because the unemployment rated spiked, which temporarily put people below the poverty level (note the poverty level does NOT count any government service like unemployment insurance or Katrina payouts).
And because some rich people stop working (and therefore earning money that gets counted), there are a lot of people who were in the top 1% one year, who are in the poverty group the next year. They also drive up the "uninsured" numbers, even though they can easily self-insure and therefore don't bother to buy insurance.
It's ok. CEO and executive compensation is way up.
It's the 'gray ceiling' at work.
Get any sort of a handle at all on the big problems and the little ones will vanish of their own volition.
I disagree. Daughter #1 just graduated with a BS in Comp Sci from a top 10 Comp Sci school. Took a slightly lower offer to live in a more rual area with much better housing prices. Making in the mid 50s and just bought a house.
Grads in Engineering, Chemistry, Pharmacy, and Nursing, id est degrees that train you for SOMETHING, are doing well indeed.
I would agree with you that Pharmacy and Nursing grads are doing well, in fact there seems to be a shortage. But, at least locally, there have been a glut of engineering grads, I know a couple younger guys who are still looking, more than a year later, and they aren't slackers, they continue to look while working in retail.
Bingo! Also more college grads, an inferior employee (product of today's colleges), and a 4.7% employment.
How are you going to back up that statement?
There is no middle management role for English and History grads anymore. There is no middle management anymore.
15 years ago they said a comp sci degree was the way to go. Is that a bad idea today?
$60,000 is a good salary. But do they have to move to Alaska to get it?
"But, at least locally, there have been a glut of engineering grads, "
Is it possible that the glut of engineering grads is caused by the surplus in India? Why pay a local $60k when you can pay a foreign national $20k, right?
And then we can all come to FR and bemoan the lack of students going into hard science, and our dependence on foreign nationals for critical defense components.
There are a lot of excellent colleges and excellent young people too.
Of course, my employer was the U.S. Army and everything I needed to know, they taught me before turning me loose.
What kind of job and salary can a new graduate with a bachelor's in math and no experience get today?
"There are a lot of excellent colleges and excellent young people too."
That's not the FR party line. You've been here long enough, you should know:
- American workers are lazy. If you don't own a business, you're a slacker. Your pay should reflect that.
- American kids are stupid and lazy. We want to ship all our jobs to India and China to teach them a lesson.
- The standard of living in America is way too high. Unless or until we can lower it to the level of the Chinese, Americans deserve our scorn. Why should American workers have preferential treatment to those in other countries?!
- We are all patriotic. We love those young Americans protecting our hind ends, and our business interests. We don't have any scorn for those fine young Americans until they come home to work for us.
Its not bad a bad degree, but could I do it over again, I'd go Computer Engineering or EE+minor in CS.
Excellent point. And, at least for now, 20K goes a long way in India. I hadn't thought of India in reference to our engineering grads. Plus - add the outsourcing of local industry work in this area. Yeah, it makes perfect sense. At one time, local engineering grads could step happily into any engineering job locally and at a premium, so happy was local industry to have young grads seek out the rural area. And yes, 60K was the going rate a few years ago!
There is no mention here about how 12-25 million illegal aliens diluting this labor pool is depressing wages at most levels except the top layers.
As a history graduate wanting to be a teacher, I am jealous.
But, each person has their own priorities.
I have looked and looked at what jobs pay the most, and I really don't like any of them enough to change paths.
I love teaching (am student teaching now). If I just can't survive, I will go back to school and do my darndest to find something I like that pays a lot more, but only in that situation.
I considered becoming a meteorologist. But, there was a problem. I hate math.
Math is the major stumbling block for most folks who don't go into hard science.
I just found it frustrating, and it was my hardest subject. It was not easy, and though I do a lot of things that are hard (no slacker here), I just was too frustrated to continue.
You forgot this one.
You must drive a Jap car cause American cars break down all the time.
I am 26 with a B.S. in Chemistry (graduated in 2001) and its been very difficult finding a real full time job. For the past 4 years (spent the first year after college at a grad school) I have worked various R&D temp jobs.
"Math is the major stumbling block for most folks who don't go into hard science. "
C'mon. First of all, your unfortunate deficiency doesn't translate to everyone. Secondly, there is being good at math, and being compentent. Two distinctly different qualifications. Many science related degrees merely require competence. Competence in math can be attained by almost anyone with the appropriate motivation and attitude.
Math isn't that hard. There are lots of kids who are competent, even good at math, who go into something other than science because they want a job when they graduate.
"You must drive a Jap car cause American cars break down all the time."
Yep. That wasn't a comprehensive list, and I'm sure there are people reading these posts thinking: "Yeah, that's right, so?"
This can't be true...FReepers constantly remind themselves that the reason grads can't get jobs is b/c they don't have degrees in real subjects, like math, chem, or eng. You must be some kind of troll....
My neice graduated last year with a comp sci degree(BA).I got her,her first job making $10 per hour while finishing.Upon graduating,she found job starting her out at $20/hr.She's 22 years old and not the best comp. sci. graduate,but yet she nailed a 42K job right out of the gate.
Well, it doesn't help that I live in Michigan, which has been bucking the national trend of job growth and economic upturn for the past 5 years.
I can do math. It just is not as understandable as math wizzes say it is and is difficult.
Whenever I talk to other people who briefly considered the sciences, math is the reason they opted for a different path.
"They failed to mention that 1998-2002 grads were WAY overpriced during the Net boom."
Thats a great point. I am sure it's not all of the reason but surely is part of it.
No, we also have positions in Siberia and Sakhalin Island.
"You're forgetting that people might not like the sciences. "
No I'm not. In the post you're replying to, the original poster said he wanted to go into meterology but didn't like math. I think finding a career is a balance between practicality and passion. You're right to avoid sciences if it made you miserable. Now, if you get a BA in Greek Mythology, you limit your earning potential and job prospects. So, if you can't do what you love and make a living, do something you like. :)
I agree, the job market is tougher for kids today. College expenses are totally out of control. Foreign competition is tougher than ever. And, the sense of Americanism is as weak as it's ever been. I can't tell you how disappointed I get when I see some of the posters here bellowing about patriotism, and then the same posters will applaud the loss of American jobs.
The "me" generation is going to hurt us as much as the hippies ever did.
If you dig deep enough in the box, you'll find the raisins.
Then i'll have to fall back to argument No. 2, which is that it is your fault and you just need to go where the jobs are....
Funny thing is I've been buying and driving nothing but Fords since the late 80's (after trying Nissan) and they never seem to let me down.
Did I neglect to mention that I live within 25 minutes of the world headquarters of two of the 10 biggest chemical companies in the world? And that I value living near family, and that coupled with my love of math and science was the reason why I decided to go into Chemistry in the first place?
And that I have also applied for jobs in at least 4 adjacent states and the province of Ontario?
Times are tough for kids with Bachelor degrees. Not sure why. I knew people at one of those large chemical companies who had really great jobs and only 2-year Associates degrees. Its a strange world.
Engineering firms can't get enough engineers and math majors are usually trainable. I have no specific information about any math majors getting jobs though.
I would bet that the government is hiring math majors for NSA work, but again I don't know that for a fact.