New Grads Face a Brutal Job Market

Photo (cc) by Community College of Vermont

Congratulations to the Class of 2014. You have worked hard and you have a diploma to show for it.

Be prepared to work even harder to find a job.

It’s been five years since the Great Recession ended, but it’s still taking its toll on recent graduates. A new report by the Economic Policy Institute, a left-leaning think tank, indicates that graduates looking to enter the workforce have dim prospects. The study says:

Unemployment of young graduates is extremely high today not because of something unique about the Great Recession and its aftermath that has affected young people in particular. Rather, it is high because young workers always experience disproportionate increases in unemployment during periods of labor market weakness — and the Great Recession and its aftermath is the longest, most severe period of economic weakness in more than seven decades.

Although the numbers of unemployed and underemployed young people have gone down since the recession ended, they have yet to reach pre-recession levels. The EPI study noted:

  • Recent college graduates. Unemployment is 8.5 percent now (5.5 percent in 2007). Underemployment is 16.8 percent (compared with 9.6 percent in 2007).
  • Recent high school grads. The unemployment rate is 22.9 percent (15.9 percent in 2007). Underemployment is 41.5 percent (26.8 percent in 2007).

There’s also a large group of young high school and college graduates – nearly 1 million – who are idled. Dubbed the “disconnected youth” or “missing,” these young graduates are not employed, not looking for work and not enrolled in school.

The EPI said, “The increase in the share of disconnected young people represents an enormous loss of opportunities for this cohort, as the loss of work experience or further education will have a lasting negative impact on their lifetime earnings.”

It’s estimated that if these young people entered the labor force looking for work, the unemployment rate for young workers would skyrocket from 14.5 percent to 18.1 percent.

Other key findings of the report include more depressing news for recent graduates.

  • Lower wages. Recent high school and college grads are earning less today than before the recession. Since 2000, the inflation-adjusted wages for high school grads dropped 10.8 percent, while those for college grads dropped 7.7 percent. CNN Money said, “If wages had merely remained about the same, for example, today’s young graduates would be earning about $2,500 to $3,000 more per year.”
  • Declining job benefits. “In 2000, about 53 percent of newly employed college grads received health insurance from their job. Now only 31 percent do,” CNN Money said. Employer-provided pensions continue to decline.

The Class of 2014 is the sixth consecutive class to enter a profoundly weak job market, which will have long-term negative impacts on them. “Research shows that entering the labor market in a severe downturn can lead to reduced earnings, greater earnings instability, and more spells of unemployment over the next 10 to 15 years,” the EPI said.

On a positive note, the EPI report said it’s not too late to make a difference in the bleak situation recent graduates face.

Because the scarcity of job opportunities for the Class of 2014 is a symptom of weak demand for workers more broadly, what will bring down young workers’ unemployment rates most quickly and effectively are policies that will generate strong job growth overall. These include fiscal relief to states, substantial additional investment in infrastructure, expanded safety net measures, and direct job creation programs in communities particularly hard-hit by unemployment.

Are you a 2014 grad? What has your experience been with the job market? Share your thoughts below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
7 Secret Perks of Individual Retirement Accounts
7 Secret Perks of Individual Retirement Accounts

IRAs come with bells and whistles that many other accounts lack — including some perks you may not know exist.

10 Things That Can Ding Your Social Security Payments
10 Things That Can Ding Your Social Security Payments

Here are 10 things that could mean less money in your pocket during retirement.

7 Gadgets Under $60 That Can Boost Your Health
7 Gadgets Under $60 That Can Boost Your Health

These Amazon finds can help ease foot aches, boost energy and even protect your heart.

8 Ways to Slash the Cost of Homeowners Insurance
8 Ways to Slash the Cost of Homeowners Insurance

Reviewing this critical insurance policy takes a little effort, but it pays off big.

9 Foods You Should Never Buy Again
9 Foods You Should Never Buy Again

Make the wrong food choices, and you can ruin your health — and possibly shorten your life.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

8 Tips for Retiring Comfortably on Social Security Alone
8 Tips for Retiring Comfortably on Social Security Alone

It’s never too early to start learning how to live well while living on less.

Am I Eligible for My Mother’s Social Security Benefit?
Am I Eligible for My Mother’s Social Security Benefit?

Can an adult daughter tap into her late mother’s benefit?

11 Generic Products You Should Buy at Costco
11 Generic Products You Should Buy at Costco

Not all generics are worthwhile, but these are among the best from Costco’s Kirkland Signature brand.

This Surprise Factor Can Raise Your Risk of Dementia
This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

This Gas Station Scam Is Victimizing More Drivers
This Gas Station Scam Is Victimizing More Drivers

For the second straight year, a growing number of Americans believe they’ve fallen prey to this scam.

Organize Your Home With These 10 Thrift Store Finds
Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

11 Laws You Could Be Breaking Without Knowing It
11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

6 Legal Documents Retirees Need — but Don’t Have
6 Legal Documents Retirees Need — but Don’t Have

Few retirees have all of these documents that are crucial to their golden years — especially during a pandemic.

These Are the 3 Best Used Cars You Can Buy
These Are the 3 Best Used Cars You Can Buy

These vehicles boast reliability, safety and long-lasting value.

Can a Divorced Widow Claim Her First Husband’s Social Security Benefits?
Can a Divorced Widow Claim Her First Husband’s Social Security Benefits?

The rules are complicated when it comes to eligibility for survivors benefits.

27 Things You Should Never Pay For — and How to Get Them for Free
27 Things You Should Never Pay For — and How to Get Them for Free

When you know the tricks, you can save big on all kinds of useful things that others pay for.

15 Amazon Purchases That We Are Loving Right Now
15 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

10 Things I Always Buy at Trader Joe’s
10 Things I Always Buy at Trader Joe’s

From snacks to sweets to side dishes, stock your cart with these time-tested favorites on your next TJ’s run.

9 Small Expenses That Are Bleeding Your Budget Dry
9 Small Expenses That Are Bleeding Your Budget Dry

Keep more of future paychecks by eliminating these budget-busting unnecessary expenses.

13 Things Seniors Can Get for Free — or Almost Free
13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

Internet Providers Can’t Charge You for This Anymore
Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.