WASHINGTON Jan 6 Recent college graduates in
the United States face a more challenging job market, causing
them to remain unemployed or take lower paying jobs than their
counterparts in the past two decades, an analysis by the Federal
Reserve Bank of New York has found.
The report, released on Monday, analyzed more than 20 years
of data and found that, while it generally takes new graduates
some time to transition into the job market, today's graduates
are having an even tougher time and many are accepting jobs for
which they are overqualified, low-wage jobs or part-time work.
"It is not clear whether these trends represent a structural
change in the labor market, or if they are a consequence of the
two recessions and jobless recoveries in the first decade of the
2000s," the report said.
The study was conducted by Richard Deitz, an assistant vice
president in the New York Fed's Research and Statistics Group,
and Jaison Abel, a senior economist in the group.
Even though overall U.S. unemployment has declined, falling
to a five-year low of 7 percent in November, young graduates are
entering an economy that is still fragile and far from its
The report found that graduates from fields that provided
technical skills or serve growing parts of the U.S. economy
Healthcare and education graduates had lower unemployment
rates of about 3 percent and 4 percent respectively, while
construction and architecture majors and liberal arts and social
sciences majors experienced the highest levels of unemployment
of 7 percent to 8 percent.
The authors said this trend of higher unemployment for new
graduates began with the 2001 recession, improved when the
economy recovered, and deteriorated again during the most recent
Problems facing new graduates are compounded because more
students graduate with massive amounts of debt due to spiraling
costs for higher education. About 70 percent of U.S. students
who graduated in 2012 had student loan debt, with the average
borrower owing $29,400, up from $26,000 the previous year.
The underemployment rate for recent graduates is also higher
than in the previous two decades. That rate was 34 percent in
2001. By 2012, it had risen to 44 percent. Because of the
scarcity of jobs, recent graduates have tended to take
low-paying jobs or jobs that don't require a college degree such
as positions as bartenders or retail clerks.
However, the authors of the report say the relatively high
unemployment experienced by recent college graduates is no
reason to dismiss the value of a college education.
The U.S. Bureau of Labor Statistics projects faster growth
for jobs that require at least post-secondary education by 2022.
Workers with a post-secondary education or more earned a median
of $57,770 in 2012 compared with $27,670 for jobs requiring a
high school diploma.