Young college graduates face weak labor market
The real hourly wages of young college graduates have fallen for the third year in a row. After growing strongly during the tight labor market in the latter 1990s, there was a sharp turnaround in wages in 2001, and wages have been falling ever since. Between 2001 and 2004, the wages of young college graduates dropped from $23.04 an hour to $22.41 an hour.
Employer-provided health insurance is down among college grads
Much of the wage loss and absence of health coverage can be attributed to the lack of employment growth. Compared to the last "jobless recovery" of the early 1990s, employment rates of young college graduates are still flailing. In 1989, the peak year before the last recession, the employment rate for this group was 87.7%, similar to their employment rate at the most recent peak year (87.4%). Four years later, by 1993, the employment rate of young college grads had picked up to 87.2%, as compared to only 85.2% four years after the 2000 peak.
As shown in the figure below, the employment rate did pick up between 2003 and 2004 (one percentage point), but it is still far below the rates experienced in the mid-1990s through 2000, when employment exceeded 87.4% each year. It has been 20 years since young college graduates have experienced employment rates as low as those in 2003 and 2004.
Though overall employment finally seems to be turning around, this moderate employment growth has done little to compensate for the losses during the recession and jobless recovery. Young college graduates are still facing lower real wages than they did four years ago. At the same time, lower employment rates and rising health costs have reduced their employer-provided health insurance coverage. Until employment rates continue to climb steadily, picking up the slack in the labor market, these young workers will not have the power to bid up their wages and benefits.
Job recovery slowly regains ground
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