Graduation for high school and college students is something to celebrate this time of year, but the job market they are entering is anything but a party.
New grads face high unemployment and underemployment, depressed wages, and high student loan debt, authors Heidi Shierholz, Natalie Sabadish, and Hilary Wething outline in their briefing paper, The Class of 2012: Labor Market Remains Grim for Young released this month by the Economic Policy Institute, a nonprofit, Washington-based think tank.
The landscape has improved slightly since rock bottom numbers in 2010, but young people still face a jobless rate that is twice as high as the overall rate. In March, the overall unemployment rate averaged 8.2 percent, and the unemployment rate of workers under age 25 was 16.4 percent.
The authors note that this trend persists because young workers are relatively new to the labor market and lack experience. Once hired, their lack of seniority makes them likely candidates for being laid off in hard times. Young workers also tend to move between jobs, employers, careers, or even cities, and spend a larger share of their time as job seekers.
The report underscored the value of a college degree when it comes to finding a job.
For young high school graduates, the unemployment rate jumped from 17.5 percent in 2007 to 32.7 percent in 2010. The latest figures as of March 2012 show a slight decline to 31.1 percent. Joblessness among young, black high school graduates was 49.1 percent and 33.8 percent for Hispanic high school graduates.
Many officially employed do not have a job that provides enough hours, pushing the underemployment rate for young high school graduates to 54 percent in this latest report.
For young college graduates, the unemployment rate is 9.4 percent, a slight improvement from last year’s figure of 10.4 percent. Still, the authors note that the Class of 2012 will be joining a significant backlog of unemployed college graduates from the Classes of 2009, 2010, and 2011 in an extremely difficult job market.
Underemployment is a problem among this group too. Nearly 19.1 percent of these highly educated workers either have a job but cannot get the hours they need or want a job but have given up looking for work, the report found.
The new EPI report finds that, on average, young high school graduates in 2011 had an hourly wage of $9.45 per hour, or an annual income of roughly $19,700 for a full-time, full-year worker. Young college graduates had an average hourly wage of $16.81 per hour, which translates into a full-time annual income of about $35,000.
Interestingly, the authors found that young people aren’t escaping the tough economic times by enrolling in greater numbers in higher education. “While it may be comforting to believe that school can provide a safe haven from a desperate labor market, there is no evidence of an uptick in enrollment due to the Great Recession,” the authors write. Although college and university enrollment rate has risen since 2007, the rates have not meaningfully departed from their long-term trend for either men or women. Many students who must work to afford school can’t find jobs in the poor labor market or the idea of “sheltering in school” is not an option, according to the report.
The EPI report includes a breakdown by state of unemployment figures for American workers under 25.
A version of this news article first appeared in the College Bound blog.