College graduates can take some solace from today’s release of employment figures by the Bureau of Labor Statistics (BLS), although the employment options for those without a college education are not as abundant as they once were.
College graduates do better than others when overall job creation is lagging. According to today’s release by the BLS, the economy created 138,000 new jobs in April, well below expectations and below long-term average job creation from 1947 to 2001. Moreover, the previous two months’ employment figures were revised downward by a combined 36,000 jobs.
As a result, the current business cycle that started in March 2001 has had the lowest average job growth, at 0.03%, of any business cycle since World War II. Even average job growth during the period since August 2003, when job creation finally became positive again, has only been 0.12% — or 32% below the long-term average job growth before this business cycle. Not surprisingly then, there have only been six months — out of 61 — in this business cycle that had job growth that was above the long-term average.
With weak job growth, it is not hard for college graduates to do better than others. In April, the number of employed college graduates rose by 156,000, while the number of employed high school graduates declined by 201,000, and the number of those employed with some college education dropped by 75,000. Yet, the number of those employed without a high school degree also rose 138,000.
Employment growth in April, then, was fastest among those with the highest educational attainment, but opportunities also grew for those with the lowest educational attainment. Those in the middle educational rungs saw job chances decline. To some degree, these trends are mirrored in the job growth by industries.
Specifically, the largest increases came in: education and health care, particularly doctors’ offices and nursing jobs, with 35,000 jobs; in professional and technical services such as computer consultants, with 28,000 new jobs; in financial services, with 26,000 new jobs; and in restaurants, with 18,800 new jobs in April.
Yet everything isn’t rosy for graduating college seniors. Although the unemployment rate for college graduates was very low, at 2.2%, the unemployment rate for those between the ages of 20 and 24 was comparatively high, at 8.2% in April — an increase of 0.6 percentage points from March.
A more relevant measure than the unemployed rate is the employed share of the population. The employed share of college graduates was 75.9% in April — substantially higher than the employed share of the total population 25 and older, which was 64.6%.
Yet, this masks the fact that the employed share of population with a college degree has dropped faster since the start of this business cycle than the employed share for the population 25 and older in general. The employed share of college graduates dropped by 1.9 percentage points as compared to a decline of 0.7 percentage points for the population 25 and older overall. Although college graduates have more job opportunities than groups with less educational attainment, their job opportunities have kept even less pace with population growth over the past 61 months than the job opportunities of the population in general.
Obviously it's not only job creation that matters. So, too, does the pay that college seniors can expect to receive in their first jobs. For the past few years, the weak labor market has especially been reflected in low wage growth. Through March 2006, the last month for which data are available, wage growth barely kept pace with inflation.
Specifically, hourly earnings grew by 1.1% since March 2001 and weekly earnings increased by a total of 0.2% over this five-year period. According to today’s figures from the BLS, though, hourly wages before inflation grew at their fastest pace since last October, at 0.5%, and weekly wages before inflation grew at their fastest pace since August 1997.
To some degree, slow job creation in April was offset by greater wage growth. With energy gasoline prices increasing sharply and interest rates on the rise, it will remain to be seen how much of these gains middle-class families will get to keep. But as seniors graduate from college this spring, they will find a labor market that is not entirely hostile to them — even if opportunities are not always as abundant as they have been in the past. The hope, though, is that wages will continue to grow at a faster pace in the coming months, finally outstripping price increases, while job creation will find a stronger footing.
Christian Weller is a Senior Economist at the Center for American Progress.