Happy college ending but uncertain future (NNPA Photo by Freddie Allen)
WASHINGTON (NNPA) – Blacks with college degrees continue to fare worse than college-educated Whites in the labor market, according to a new report by the Economic Policy Institute (EPI).
The report titled, “The Class of 2014: The Weak Economy Is Idling Too Many Young Graduates,” looked at the job prospects for high school graduates and college graduates during the Great Recession and the current economic recovery.
“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,” stated the report written by Heidi Shierholz, Alyssa Davis and Will Kimball of EPI. “Rather, it is high because young workers always experience disproportionate increases in unemployment during periods of labor market weakness.”
The report said that the unemployment rate for Black high school graduates (17-20 years-old) rose from 30.4 percent in 2007 to 41.2 percent in 2011 and decreased to 34.7 percent. The jobless rate for young, White high school graduates was 13.1 percent in 2007, peaked at 24 percent in 2010, and edged down to 19.4 percent.
Young Black college graduates also suffered high rates of unemployment following the Great Recession. In 2007, the jobless rate for young college-educated Blacks was 8.1 percent, but by 2010, a year after the official end of the recession, that rate ballooned to 20 percent. The report said that the jobless rate for this group of workers has improved to 13.1 percent.
Meanwhile, the unemployment rate for White college graduates never reached double digits, even during the Great Recession.
“Among young, White non-Hispanic college graduates, the unemployment rate was 5.1 percent in 2007, rose to 8.6 percent in 2011, and improved to 8.0 percent,” stated the report.
The report said that high unemployment among recent college graduates is not because of a lack of education or skills for available jobs, “rather it stems from weak demand for goods and services, which makes it unnecessary for employers to significantly ramp up hiring.”
High school graduates and college graduates also earn less than they did nearly 15 years ago.
“The real (inflation-adjusted) wages of young high school graduates have dropped 10.8 percent, and those of young college graduates have dropped 7.7 percent,” stated the report.
That means that, high school graduates lost about $2,500 in annual earnings and young college graduates lost approximately $3,000 since 2000.
Despite the common belief that college students often “shelter in school,” waiting until the economy improves, skyrocketing costs associated with higher education and enormous debt force many graduates to seek any work that they can find.
During the 2013-2014 academic year, the average total costs to attend a four-year in-state public school was $22,826. The average costs for a four-year private school was twice that at $44,750.
“From the 1983–1984 enrollment year to the 2012–2013 enrollment year, the inflation-adjusted cost of a four-year education, including tuition, fees, and room and board, increased 125.5 percent for private school and 129.1 percent for public school,” the report said. “Median family income only increased 15.6 percent over this period, leaving families and students unable to pay for most colleges and universities in full.”
College costs combined with a weak economy means that students that graduate in 2015, 2016, and 2017 will encounter similar high jobless rates and lost earnings.
“They’ll never get those lost earnings back, those 10-15 years of reduced earnings, said EPI’s Heidi Shierholz. “That’s just gone.”
She said that the high unemployment that young workers are facing right now is part and parcel of the high unemployment that’s going on in the labor market as a whole.
“That means the solutions that will bring the unemployment rate down more broadly are also the same solutions that will bring the unemployment rate of young workers down,” she said.
The report recommended restarting long-term emergency unemployment benefits, instituting work sharing programs to avoid layoffs, and allowing earlier access into Social Security and Medicare programs for older workers to improve job prospects for all workers, especially young workers.
The report concluded: “The bottom line is that policies that will generate demand for U.S. goods and services (and therefore demand for workers who provide them), or policies that would spread the total hours of work across more workers, are the keys to giving young people a fighting chance as they enter the labor market during the aftermath of the Great Recession.”