Tweet
The WAPO has a nicely graphed blogpost telling us that there was no recession for college grads. It shows that employment for college grads has risen at a strong pace since the start of the recovery and is well above its pre-recession level. The problem is that we need a denominator in this story. (This seems to be a recurring problem at the WAPO, like when they tell us about the multi-trillion dollar shortfall projected for Social Security without pointing out that it is equal to around 0.6 percent of future GDP.) Anyhow, fans of fractions can see that there was in fact a serious recession for college grads which still lingers today. As the graph shows, the unemployment rate for college grads rose from less than 2.0 percent before the downturn to a peak of more than 5.0 percent in 2009. Currently it is hovering near 4.0 percent, more than twice its pre-recession level.
Unemployment Rate for People With at Least a College Degree
Source: Bureau of Labor Statistics
So how do we get a doubling of unemployment at a time when college grads are scooping up millions of new jobs? Yes folks, this is where our old friend the denominator comes in. It seems that there has been an even more rapid rise in the number of college grads in the labor force over the last five years as shown below:
People with a College Degree or Higher in the Labor Force
Source: Bureau of Labor Statistics.
So even though college grads were getting more jobs, they were not getting them at a fast enough pace to keep up with the growth in the number of college grads in the labor force. Just to be clear, college grads were still doing well in the scheme of things. Here’s the picture for those at the other end of the educational spectrum, people without high school degrees.
Unemployment Rate for People with Less than a High School Degree
Source: Bureau of Labor Statistics.
As can be seen unemployment also doubled for people with less than a high school degree, but the starting point was much higher at close to 7.0 percent. In fact, this rise in unemployment understates the true impact of the downturn, since many people without high school degrees simply left the labor force as a result of their bleak job prospects. (This undoubtedly happened with some college grads too, but the effect was likely much smaller.)
The moral of this story is that the recession has hit everyone. This is important because some folks could be led to believe from the employment story that the problem is that we just need more people to get college degrees and then they will be able to find good paying jobs. However, when we bring in our old friend the denominator we can see that this is not true. The problem is simply a lack of demand in the economy. Education helps in a downturn as it does during normal times, but even the most highly educated workers are getting whacked by this recession.
Dean Baker is co-director of the Center for Economy and Policy Research. He also writes a regular blog, Beat the Press, where this post original appeared
17 Comments
And what is the unemployment rate for people
who have had college degrees for five years or less?
The college grad problem is primarily the result of “outsourcing”.
If Barack Obama had ever heard of FDR, things would be a lot better.
No one seems to realize how much money “commodity market manipulation” has sucked out of this economy. An “astronomical” amount of money is constantly going from us to the market manipulators. It’s not possible for the price of gasoline to triple in a few short years if the laws of “supply/demand” account for their prices. It’s not possible for the price of food to more than double in a few short years before this drought if only the laws of “supply/demand” apply. Go to this website and see how we have been swindled, and nobody knows anything about it
http://wp.me/p2vRlu-4 when all the money matriculates into the hands of the 1%, you have a severe recession.
Extraordinarily enlightening, Lakota. Much appreciated!
I am one college grad in his mid 50′s whose entire industry (e-tech, pwb layout) has been outsourced. 4+ years since my last FT living-wage job, almost 2 years since my last PT job…
Funny, that, but I keep reading articles in my local nooz paper about how college grads aren’t finding full-time work very easily these days. About how they’re living at home w/parents and doing internship after internship – if they’re lucky – for no pay but attempting to get experience.
Plus stories like this one about a GenX family, where the dual income parents used to make a combined 6-figure income; now down to dad with a very pt job and no ft work in sight for either parent.
I have relatives with grad degrees in their 30s, who have to be subsidized by their boomer parents bc their full-time jobs went away, and all they can cobble together are very pt gigs… plus now they’re in their 30s, so they’re “too old” to work in restaurants, bars or coffee shops (or, at least, they’re not being called back for interviews).
The WaPOO can stick it where the sun don’t shine. Load of hogwash.
Thanks for the post, however.
I am very pleased to see that more and more people are clicking your link, lakota.
Indeed, it would do Dean Baker great good to encounter your thoughts and I do wish that he might, on occasion, stop by to respond to stellar understandings such as you consistently share.
DW
sadly, “the laws of supply vs demand” are a myth
if supply determined price then nikes would be 5 dollars a pair and my one of a kind quartz rock would be worth millions
demand is everything, supply might be a mitigating factor that sometimes increases sometimes decreases demand but there are other factors more important then supply
believe it or not, the lack of supply can cause the price of a product to go down, the abundance could cause the price to go up
demand stands alone as the factor determining price, supply figures into the demand factor just like the weather does, but we don’t say “demand vs weather”
The press reports quite often the lie that “employers are unable to fill many jobs due to lack of skills in the available work force” — that is intended to mollify or to temper criticism. They also advertise jobs requiring enormous skills and then offer a pittance, no benefits part time, that sort of BS. I have no doubt this is a conspiracy to hold down wages and make people work harder. Some day there will be a reckoning, I believe.
I would add, “the laws of supply vs demand” would probably hold for perishable goods and that’s probably how these “laws” became lore
“This seems to be a recurring problem at the WAPO, like when they tell us about the multi-trillion dollar shortfall projected for Social Security without pointing out that it is equal to around 0.6 percent of future GDP.”
Making statements about what the GDP will be in the future based on non-reality based, non-empirical models is not an exercise that even neoclassical economists should be engaging in.
Anyway, not only will we have a bad GDP in the future, it’s increasingly looking like we won’t even have a GDP period. And it will not just be college graduates who can look forward to not having a job soon.
Nikes aren’t a gallon of gas, and your quartz rock is not a loaf of bread or a pound of hamburger; this in reference to real life and real people who have to have food and transportation.
Go to this website http://wp.me/p2vRlu-4
DWBartoo, I Faxd a congressman a copy of that website and I saw him on C-Span yesterday. Bigger than shit, he said the gasoline prices were due to international markets and there was nothing they could do about it. That international market is the New York Mercantile Exchange where the “market manipulators” do their thing, and they can make the price of gas go down, they can make the price of gas go up, they can make the price of gas jump around and do the “hucklebuck”.
These people are “bots”. Some are “Romneybots”, while others are “Obamabots”.
“You People” better get used to the fact our 1% nobility masters seek to enslave us or make us endentured servants/serfs, and elminate our civil liberities (can’t have any civil disobedience that threatens their wealth and power brought about by a little free speeach and freedom of assembly you know). Bring back the middle ages. What!? Are there no workhouses? Are there no prisons? (plenty of those unfortunately). Get used to being poor and financially insecure.
BTW wages are lower than ever relative to cost of living. I heard an economist the other day say that if the minimum wage of the early 90s had been adjusted for inflation, today it would be somewhere around $9.50 per hour. Wonderful.
And Barack Obama can say “I helped”.
My son, who is over 30, is in the same boat. I worked and sacrificed to send him through college.
When he told me he couldn’t get a job, I thought he wasn’t trying hard enough, so I took his stellar credentials and began to apply for jobs. So far I haven’t gotten hired, plus they want all kind of ridiculous experience qualifications that no college grad would have.
Thanks for the link. Required FDL reading. If that doesn’t make your blood boil, what will?
I’m glad you appreciated it. Unfortunately these politicians are only seeing what they want to see and no more. They’ll continue to run back and forth across the country talking about nothing.