What Does the Future Hold for College Students Graduating During the COVID Recession?
New college grads are entering the job market during a confirmed recession, according to the National Bureau of Economic Research, as the unemployment rate for the nation hit 13.3% in May. Looking at past recessions, this does not bode well for these workers’ overall career trajectories in terms of average wages and available jobs, according to one workplace authority.
“Job prospects for college grads who enter the job market during a recession could take years to recover. This group tends to have higher unemployment, even years later, than bachelor’s degree holders who graduated at other times. Meanwhile, wages rose slowly during one of the tightest job markets in recent history pre-COVID, but that could turn to stagnation during a recession,” said Andrew Challenger, Senior VP of global outplacement and executive and business coaching firm Challenger, Gray & Christmas, Inc.
In May, the unemployment rate for those holding a bachelor’s degree or higher was 7.4%, compared to 2.5% in March and 1.9% in February, according to the Bureau of Labor Statistics (BLS).
A survey of 2008 college graduates conducted in 2009 and 2012 by the Department of Education found the unemployment rate of these graduates in 2009 was 9%, about on par with the national rate, but well above the 4.9% unemployment rate for those who held at least a bachelor’s degree, according to the BLS. In 2012, the unemployment rate for these graduates was 6.7%, compared to 4.0% for all workers with a bachelor’s degree or higher.
Meanwhile, wages for new college grads were stagnant even prior to the downturn. According to a study conducted in 2019 by executive search firm Korn Ferry, entry-level salaries for 2019 college graduates averaged $51,347, up 1.9% from the $50,390 2018 college grads were compensated. The study noted that adjusting for about 2% inflation year-over-year, wages remained effectively flat.