High school and college graduates are still being hobbled by years of weak economic growth and an extremely tight job market, and that difficult start in the job market could impact the class of 2013 for years to come, a new analysis finds.
“Graduating in a bad economy has long-lasting economic consequences,” said Heidi Shierholz, economist with the Economic Policy Institute, which prepared the report on young workers released Wednesday.
The liberal-leaning think tank looked at high school graduates between ages 17 and 20 who aren’t enrolled in further schooling, as well as college graduates between ages 21 and 24 who have a bachelor’s degree and aren’t seeking further education.
The analysis found that the unemployment rate for the high school grads who aren’t going to college has improved somewhat since hitting a high of 32.7 percent in 2010, but not enough to give young workers (and their parents) much comfort.
An average of 29.9 percent of high school grads between ages 17 and 20 who weren’t enrolled in further schooling were unemployed and actively looking for work between March 2012 and February of 2013, according to their analysis. That’s up from an average of 17.5 percent in 2007, when the job market was much stronger because the recession had not yet begun.
Getting a college degree still greatly improves people’s job prospects, but many young college graduates also continue to struggle to find a job after many years of high unemployment and dim job prospects.
The unemployment rate for young, recent college graduates who weren’t furthering their education stood at an average of 8.8 percent between March of 2012 and February of 2013, according to the EPI analysis. That’s down from an average of 10.4 percent in 2010, but still much higher than 5.7 percent in 2007.
The EPI report noted that more than half of young high school graduates were enrolled in a college or university, following a long-term trend toward more young Americans heading to college. Still, many are finding it difficult to finance the increasing cost of education, and the weak job market could make it hard for those young people to pay off their student loan debt.
That's especially true if they can’t land a well-paying job. The EPI analysis found that young high school grads were making an average of $9.48 an hour in 2012, while young college grads were earning an average of $16.60 an hour.
Both groups have seen wages fall in the past decade as the economy has weakened, according to EPI’s analysis. That could turn out to be a big problem for young workers because when you start out your career at a lower wage, it can take years and years to catch up.
According to EPI’s analysis, the class of 2013 could be earning less than they might have in a stronger economy for as long as 10 or 15 years.
Shierholz noted that the unemployment rate for young workers is always higher than average, and that’s especially true in times of economic distress. Now, she said, young workers are in a particularly tough place mainly because the overall job market has been so tough for so long.
“The unemployment rate of young workers is exactly what we would expect it to be just given the broader weakness in the labor market,” Shierholz said.
The overall unemployment rate fell to 7.6 percent in March, according to the Bureau of Labor Statistics. But economists weren’t cheered by the drop because it came as many Americans stopped looking for work and therefore were no longer counted in the tally. The unemployment rate only includes people who have actively looked for a job in the past four weeks.