Though the May Department of Labor jobs report showed an anemic 54,000 new jobs and an unemployment rate now 9.1 percent, the prospect for new college graduates about to enter the work force may be better than it was over the last few years. The U.S. Bureau of Labor and Statistics and the National Association of Colleges and Employers projected that employers are expected to hire 19 percent more graduates this year than last year.
Roughly 2 million college graduates enter the job market this year.
The conventional wisdom that a four-year degree gives a person a better chance and a brighter future in this increasingly competitive global economy is questioned. Some young people are saddled with loans that they cannot pay.
Two recent studies examined the issue. The Brookings Institution used 2010 data from a sample of 23- to 24-year-olds and found the differences in employment outcome by education are significant. The study showed that youth with less than a high school education can only expect an employment rate of 43 percent at average weekly earnings of $150; a high school diploma would yield an employment rate of 64 percent with average weekly earnings of $305; those with some college education have an employment rate of 79 percent at average weekly earnings of $365. Better yet, those with a college degree can expect an employment rate of 88 percent and average weekly earnings of $581.
Employment rates are vastly better for those over 25 years old. Even those without a high school diploma have a 14.7 percent jobless rate, according to the Bureau of Labor Statistics. High school graduates have a 9.5 percent unemployment rate, those with some college an 8 percent rate, and those with a college degree have nearly full employment a 4.5 percent unemployment rate.
Another study conducted by Andrew Sum, a labor economist at Northeastern University and leading expert on the youth labor market, used data from the 2009 Labor Department’s American Community Survey.
The objective of this survey analysis was to examine the respective college majors that do best in the job market in terms of employability and income for degree holders and non-degree holders.
The three most employable majors were education/teaching, engineering, and math/computer/science. The three top income levels were in the fields of engineering, math/computer/science, and business.
Across all majors, a degree holder earns on average of $26,756 while a non-degree holder will earn on average $15,896, a difference of $10,860.
Other factors that may affect the ability to acquire gainful employment with a college degree are the ability to network, work experience before graduating, and lastly, if graduates have acquired enough proficiency and skill to perform well on the job.
Graduates do not always develop the work skills they need. The Christian Science Monitor reported that a study found that almost half of college students do not build better skills at critical thinking, writing, and complex reasoning during the first two years of college. Even after four years, more than one-third had not significantly improved their cognitive skills.
Recently the Department of Education issued new rules meant to hold certain for-profit colleges accountable for whether graduates have the skills their academic recruiters promised them. The new regulation was aimed primarily as a deterrent to fraud in post secondary education.
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