High school and college graduates of the class of 2015 still face stagnating wages and high levels of unemployment and underemployment, despite a gradually improving economy, according to a new EPI report. EPI senior economist Elise Gould and research associates Will Kimball and Alyssa Davis examine the labor market conditions facing young high school and college graduates between the ages of 17 and 24 in Class of 2015: Despite an Improving Economy, Young Grads Still Face an Uphill Climb. Ultimately, graduating in a bad economy has long-lasting economic consequences—for the next 10 to 15 years, those in the class of 2015 will likely earn less than if they had graduated when job opportunities were plentiful.
“The class of 2015 is the seventh consecutive class to enter the labor market during a period of profound weakness,” said Davis. “Though job prospects for this group are better than they were for the several classes that graduated before them, many recent graduates remain underemployed or idled by the weak economy. In other words, too many young graduates are unable to pursue the two major paths that lead to future career success—further schooling and employment.”
The unemployment and underemployment rates of young graduate remains substantially higher than before the recession began in 2007. The unemployment rate is 7.2 percent for young college graduates and 19.5 percent for young high school graduates—in 2007, these rates were 5.5 percent and 15.9 percent, respectively. The underemployment rate, meanwhile, is 14.9 percent for young college graduates (compared to 9.6 percent in 2007) and 37.0 percent for young high school graduates (compared to 26.8 percent in 2007).
“Graduating into a weak economy means that, through no fault of their own, the Class of 2015 faces weaker job opportunities, lower wages, and lower overall earnings,” said Kimball. “Young workers might be a unique group, but the solution to these problems is not unique to them. The same policies that will improve job prospects and wages for young graduates are the ones needed to generate broad-based demand and wage growth for all workers.”
Newly graduated high school and college seniors can expect entry-level wages that are actually lower than they were 15 years ago. Only young male college graduates have wages now that are higher than they were in 2000, and their wages have only improved 1 percent since 2000. Young female college graduates, meanwhile, have wages that are 4.4 percent lower than in 2000.
This paper is EPI’s fifth annual examination of the labor market conditions for young high school and college graduates. It is part of EPI’s Raising America’s Pay project, a multiyear research and public education initiative to make wage growth an urgent national policy priority. Raising America’s Pay seeks to explain wage and benefit patterns—and the role of labor market policies and practices in suppressing pay—and identify policies that will generate broad-based wage growth.