After the cap and gown are put away and the parties are over, how is life looking for newly minted college graduates? Will they be able to land new jobs? Will they be able to save for retirement?
Like a lot of things, that depends on whom you ask and what analysis they used. The good news is most of the news is good.
Different reports paint different portraits of the hiring landscape for 2018 grads. In general, graduates in certain professions, such as accountants or registered nurses, are probably in a good position to get hired. But some industries, including hazard insurance and retail, are having a rough go.
And while the job outlook has generally improved, there’s plenty of room for it to get better, and inequities persist.
First, let’s have the good news.
According to the U.S. Bureau of Labor Statistics, employment in occupations that require a bachelor’s degree is expected to grow 10 percent between 2016 and 2026. That’s faster than the average of 7 percent growth projected for all occupations.
Among the occupations the bureau forecasts as having high numbers of job openings are:
- General and operations managers with more than 210,000 projected annual openings
- Registered nurses with an average of more than 203,000 projected annual openings
- Accountants and auditors with an average of almost 142,000 projected annual openings
- Elementary school teachers, except special education, with nearly 113,000 projected annual openings
- Software developers with 85,700 projected annual openings
- Market research analysts and marketing specialists with more than 77,000 projected annual openings
Report: ‘High-Pressure Economy’ Needed
On top of that, the Economic Policy Institute recently released a report on the Class of 2018 that found improved job prospects for new graduates, compared with graduates of the past decade. But the report suggested challenges still exist, and things could be better.
“While by many measures the labor market for young graduates is now almost —or perhaps even fully—back to where it was before the recession, the economy of 2007 represents a low bar for economic opportunity,” the report says. “We should instead be striving for the high-pressure economy of the late 1990s and 2000, in which an extended period of labor market strength translated into better opportunities for workers across the board. The economy needs to continue on track toward full employment for economic growth to reach all corners of the labor market.”
In other words, saying things are better than they’ve been in the last 10 years isn’t saying all that much because things have been anemic for a while. So while things look better than the beginning of the Great Recession in 2007, they’re still not as good as they were in 2000.
And the benefits of the improving economy haven’t been felt equally, particularly among women and African American college graduates.
Black Grads Face ‘Pay Penalties’
“While the recovery has shown overall positive trends, it hasn’t benefited everyone equally,” said researcher Julia Wolfe. “Young black workers face large pay penalties right out of college. And even though women are the majority of college degree holders, their wages continue to lag behind men’s.”
According to the report:
- Fewer than 20 percent of people between the ages of 21 and 24 have a college degree
- While comprising half of this age group, women have 57.3 percent of degrees
- Whites and Asian American/Pacific Islanders are more likely to hold degrees than African Amercans and Hispanics
- For young college graduates, the unemployment rate is 5.3 percent, compared with 5.4 percent in 2007 and 4.3 percent in 2000
- Between 1990 and 2018, average wages grew just 15.5 percent
- The gender and racial pay gaps are higher than they were in 2000
The report says pay rates for young women barely increased since 2000, going from an hourly $18.22 to $18.33. At the same time, men’s wages rose from an average hourly rate of $20.48 to $21.48.
“The most striking finding from this analysis of wages is what has happened to young black college graduates,” the report says.” In 2000, as well as for most of the late 1990s, the hourly pay of black college graduates closely tracked that of their white counterparts… What is stunning is the sharp decline in black wages over the last several years, during the Great Recession and its aftermath. They are the only group that saw outright declines, and these declines are quite large and economically meaningful.”
The average hourly wage of black college graduates hit bottom in 2014 at $15.27 per hour and recently edged up to $16.53 in 2018, the report says.
Employers Plan to Hire Fewer New Grads
The news gets worse in a report by the National Association of Colleges and Employers (NACE). This report says employers plan to hire 1.3 percent fewer new graduates than they hired last year. The report represents a reversal from November 2017 when NACE said employers planned to hire 4 percent more new graduates from the class of 2018 than from the previous year’s class.
“The fact that the college hiring outlook for the Class of 2018 has dropped this spring is a prime example of how volatility in a small number of industries can impact the overall hiring outlook,” the NACE report says. “Two industries in particular are driving this overall decrease. Insurance firms… anticipate decreasing hires by 42 percent due to the recent natural disasters — hurricanes, floods, and wildfires —that caused high dollar amounts in catastrophic losses. Meanwhile, retail employers plan to decrease their hires by almost 33 percent, citing the changing landscape of their industry and lack of new openings as key factors.”
Asked about the apparent contradiction between its pessimistic outlook and the relatively positive overall projection from the Economic Policy Institute, NACE spokeswoman Andrea J. Koncz told Annuity.org that the two reports use different methodology.
“We survey our NACE employer members, and had a small sample size (a total of 150 employers),” Koncz wrote in an email. “We are limited to the answers that are provided to us by our members.”
This report marks the first time NACE has projected a decrease in job offers to new grads since the Class of 2010, when employers said they planned to reduce hiring by 7 percent.
5 Cited Research Articles
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- Torpey, E. (2018, April) Employment outlook for bachelor’s-level occupations. Retrieved from https://www.bls.gov/careeroutlook/2018/article/bachelors-degree-outlook.htm
- Gould, E., et al. (2018, May 10). Class of 2018 College edition. Retrieved from https://www.epi.org/publication/class-of-2018-college-edition/?utm_source=Economic+Policy+Institute&utm_campaign=18eb1f382b-EMAIL_CAMPAIGN_2018_05_11&utm_medium=email&utm_term=0_e7c5826c50-18eb1f382b-59958953&mc_cid=18eb1f382b&mc_eid=0bc5832b39
- Economic Policy Institute. (2018, May 10). Class of 2018 college graduates face a tightening labor market, but more work needs to be done. Retrieved from https://www.epi.org/press/class-of-2018-college-graduates-face-a-tightening-labor-market-but-more-work-needs-to-be-done/
- National Association of Colleges and Employers. (2018, April 16). College Hiring Projection Dips 1.3 Percent. Retrieved from http://www.naceweb.org/job-market/trends-and-predictions/college-hiring-projection-dips-1-point-3-percent/
- National Association of Colleges and Employers. (2017, November 15). Job Outlook 2018: College Hiring To Increase By 4 percent. Retrieved from https://www.naceweb.org/job-market/trends-and-predictions/job-outlook-2018-college-hiring-to-increase-by-4-percent/