Economic Snapshot | Trade and Globalization

Entry-level wages for college graduates

A weekly presentation of downloadable charts and short analyses designed to graphically illustrate important economic issues. Updated every Wednesday.

Snapshot for November 10, 1999

Entry-level wages for college graduates

One important question to ask about the economy is how recent college graduates are faring in the marketplace. In the 1970s, when there was a surplus of college graduates, wages fell for a time before beginning to rise again in the early 1980s. But many people don’t realize that the wages for entry-level male college graduates peaked in the mid-1980s and proceeded to decline precipitously through much of the 1990s, falling a total of 10% from 1989 to 1995. Only with the persistently low unemployment of the past couple of years did entry-level wages for male college graduates start growing again, finally regaining their 1989 level in 1998 (even these recent gains still leave wages for these men behind their mid-1980s level). A similar trend holds true for female entry-level college graduates, who experienced a 7% drop in wages from 1989 to 1996. A 6.5% increase from 1996 to 1998 has, however, nearly returned these women’s wages to their 1989, pre-recession level.

The bottom line is that young college graduates, the symbols of the supposed “new economy,” have fared poorly in the 1990s. The chart below presents the trends in entry-level wages and salaries (per hour) earned by recent college graduates (defined as those with one to five years’ work experience).

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