Economic Snapshot for June 10, 2009
by Kathryn Edwards
The latest unemployment data for young college graduates—workers with a bachelor’s degree or higher who are under 27 years old—show that 2009 is the second worst year on record at 5.9%, barely behind 1983’s 6.2%. Workers with higher education are generally better insulated from downturns in the labor market and the economy than those without a college education. Historically, they have lower unemployment rates than the total population. However, the unemployment rate among college graduates aged 23-27 has jumped up significantly during this recession. Layoffs and hiring freezes continue as employers try to weather the recession and entry-level openings are hard to find.
The Chart shows the average of the March and April unemployment rate for workers who are under 27 years old with a college degree or higher from 1979 to 2009.1 Not only has unemployment for this group shot up faster than in past recessions, but it is also higher relative to that of the general population. Since 1979, this subgroup’s unemployment rate averaged a little more than half of the total population’s unemployment rate. If the national unemployment rate was 5%, for example, young college grads’ unemployment rate was 2.8%. In this recession, however, that ratio is now almost 70%. Everyone is worse off in the current downturn, and young college grads are no exception.
Although still better off than their peers without a higher education, young college graduates face challenges unique to their age and situation—it is likely that they have considerable debt from financing school, have had no time to build up savings, and, if looking for their first job, are not eligible for unemployment benefits.
1. The CPS monthly data on college graduates under 27 are not seasonally adjusted. The average of March-April was chosen to mitigate the seasonal variation and reflect the job market for new graduates.