What Does The Low Unemployment Rate Mean For Recent College Graduates? There's Good News & There's Bad News
A bit of good news hit the job market Thursday, as the Labor Department said the U.S. unemployment rate is 5.3 percent, which is the lowest that it has been in seven years, according to the New York Times. Unfortunately, the Times said the data shows that the dip resulted more from a large amount of people leaving the workforce than more people finding work. So, what does this new unemployment rate mean for college graduates just entering the job market? It's not necessarily a great thing, but they won't have it any harder than grads of the previous year.
The new data shows that the economy added 223,000 jobs last month, but that the percent of Americans working or looking for a job only fell 0.3 percent, according to the Times. That means the number of people participating in the economy by working or looking for a job is at its lowest since 1977, which isn't great for new grads. If new jobs aren't being added for formerly unemployed people or those who were actively looking for jobs, then The Guardian said that means that only people who were already working found work, a number of people left the workforce and are not looking for jobs, and — the most significant and most disappointing reason that the unemployment rate fell — people who were looking for a job gave up and were no longer counted as unemployed.
Most jobs that previously required only a high school diploma are now requiring a bachelor's degree, according to the Times. That means that the pool of college graduates has grown larger over the past few years, and recent grads have been forced to take jobs they would have otherwise turned down had better positions not been as competitive.
Tom Gimbel, chief executive of LaSalle Network, a Chicago-based staffing firm, told the Times that he's seeing "companies put money into the back offices" in marketing, human resources, and accounting positions. But, most companies are looking for the best of the best candidates, since so many candidates do have college degrees. Gimbel said means that students from less prestigious universities or those with less-than-fabulous GPAs are being forced to take jobs making $25,000 to $30,000 a year, for example, working at call centers.
Then again, even Ivy Leaguers might not have salaries to brag about. Earnings over the past year have only grown by 2 percent, according to the Times. For entry-level workers, specifically, though, Reuters found that wages are rising. Job sectors preferred by college grads, which include sales, marketing, and administration, usually pay between $30,000 to $35,000 per year, according to Gimbel. If you want to have any hope of making the big bucks, you have to go into coding, programming, or software development. Depending on experience, Gimbel said good coders can make from $100,000 to $175,000 per year.
A recent report from Michigan State University’s Collegiate Employment Research Institute (CERI) did find that recruiting for recent college grads is at an all-time high since the dot-com boom in 1999 to 2000, according to Fast Company. The CERI study showed a brighter job future for recent grads. Another study cited by Fast Company said that unemployment rates for people between the ages of 17 and 24 was historically high, at 7.2 percent for 2015. Further, both options for employment and returning to school for an advanced degree are more limited for young grads. Specifically, 10.5 percent of young graduates are neither enrolled in school or employed.
But stats are changing slowly, and some contradict others. USA Today reported in May that college graduates are getting better jobs. There is hope for recent grads, even if job growth is slow.