It’s been a slow climb, but after a decade of steady recovery, young graduates’ economic prospects overall are the brightest since 2007. Wages have been rising since 2012, and recently surpassed the benchmark set in 2000.
According to the Economic Policy Institute, challenges still remain. Remember that the economy at the beginning of the recession was in freefall, and nothing compared to more prosperous times in the ’90s and early 2000s.
Elevated levels of underemployment remain. That is a count of those who are unemployed as well as part-timers who want full-time work, and even those workers who want a job and have looked for work in the last year, but stopped looking for work in the last month. This rate among new college grads is 11.1% this year, as compared with 9.4% in 2007 and 6.9% in 2000.
Wage gaps are growing particularly among women and black workers. This runs counter to the finding that a degree translates to a higher salary. While fewer than one-fifth of adults age 21–24 have a college degree, more than half (57.3%) of degree holders are women. Men’s wages increased over the past 18 years while women’s have barely budged, swelling the gender wage gap from 11% to 14.7%.
A recent survey of 700 students and recent graduates (60% of whom don’t have a job yet or haven’t accepted an offer) by Yello revealed that almost twice as many men seek salaries of over $85,000 than women.
A different report from iCIMS also found the gender wage gap rooted in expectations. Female grads expect a salary of approximately $49,002 on average, while the men were setting their sights on an average of $65,558.
Regardless of expectation, black and Hispanic adults in this age group are far less likely to be college graduates, and black college graduates’ wages have seen large declines since the recession. Today’s young black college graduates are looking at a 16.8% gap between their salaries and those of their white counterparts.
Despite these findings, graduates continue to enter the workforce full of optimism. The iCIMS report indicates that they’re expecting to start with an average salary of $54,010. But recruiters estimate they will pay entry-level employees $56,532, $10,000 more than last year’s average.
According to Susan Vitale, chief marketing officer at iCIMS, this is because nearly 80% of recruiters are finding filling entry-level positions more challenging than they did three years ago and need to offer competitive salaries to attract them.
iCIMS found that the majority of recruiters (52%) were looking for STEM majors, yet only 24% of college seniors surveyed will be graduating with a degree in STEM. Other majors in demand include business/finance (42%),
arts/communications/media (39%), healthcare/environment (36%), law (15%), and education (13%).
Although STEM majors are in demand, analysis by Manpower Group found that as many as 60% of U.S. employers who plan to hire more IT personnel say that their top requirement is good communication as these departments become more cross-functional and drive change throughout an organization.
Other soft skills graduates need to be well-versed in to land jobs (and keep them in an age of automating tasks) include collaboration, problem solving, organization, and customer service.
Graduates seem to be sticking closely to what employers are seeking. According to the latest report from LinkedIn, the top jobs graduates applied for in the past two years is a good indicator of the positions and salaries for this crop of degree holders.
- Software engineer ($92,300)
- Investment banking analyst ($85,000)
- Marketing coordinator ($45,000)
- Graphic designer ($45,000)
- Assistant media planner ($58,000)
- Account executive ($60,000)
- Business analyst ($70,000)
- Recruiter ($48,000)
- Account coordinator ($40,000)
- Administrative assistant ($38,000)
With the exception of engineering positions, these salaries aren’t promising to do more than chip away at student loans. In fact, according to the Brookings Institute, of the more than 40 million Americans who have student debt, 14% owe more than $50,000. That’s nearly triple the number 18 years ago, and that share is continuing to grow.