The class of 2015 may be psyched about their job prospects but their optimism doesn’t exactly jibe with reality.
In a report released Wednesday, the Economic Policy Institute analyzed employment, enrollment, and wage trends to see exactly what the class of 2015 will be up against. Despite overall improvements in the job market since the financial crisis, stagnating wage growth and rampant underemployment continue to challenge young workers.
The unemployment rate among young college graduates is 7.2% compared to 5.5% in 2007; the underemployment rate, which counts college graduates who are working in jobs that don’t require degrees, is nearly 15%, compared to 9.6% in 2007.
“The wide gap between unemployment and underemployment suggests that a lack of job opportunities is either forcing young people to drop out of the labor force or take part-time jobs when they’re looking for full-time jobs,” the report says.
It’s not entirely unrealistic to see younger workers struggle to kickstart their careers. Whether the economy is booming or not, they tend to have higher unemployment rates and get paid less than older and more experienced workers. And for these same reasons, younger workers are slower to rebound after financial crises. As for the class of 2015, it could take them 10 to 15 years to catch up to the earnings levels of people who graduated prior to 2007, according to the EPI report.
When adjusted for inflation, young college graduates are earning 2.5% less than their peers in 2000. The picture is often gloomier for women and minorities, who are consistently less likely to be employed and more likely to earn less than white male college graduates. College-educated women earn 15.7% less than men, the report found. And the unemployment rate for Hispanics and black college graduates is still twice that of white college graduates (11% vs. 5.8%).
Consulting firm Accenture found similar trends in its annual college graduate employment survey, released this month.
Of 2,000 college graduates surveyed (half of whom graduate in 2015; the other half was comprised of 2013-14 graduates), Accenture found a stark contrast between new graduates’ career expectations and the reality that their peers are facing.
Although more than two-thirds of 2015 grads (67%) said they expected to find a full-time job, just half of 2013-14 grads (52%) said they were employed full-time. New grads might be disappointed by the kinds of jobs available to them, too — 90% said they expect to find work in their field of study, but only 64% of 2013 and 2014 grads actually did.
The key for any graduate navigating today’s job market isn’t necessarily to let statistics like these get you down. You may not be able to control how much companies are willing to pay you or how many hours they schedule you for work. But you can adjust your expectations about the kind of work you might end up doing, says Alexandra Levit, co-founder of the Career Advisory Board, a think tank established by DeVry University.
“The most successful job seekers are willing to settle to some degree,” Levit says. Finding a great paying job in the area you want may mean making sacrifices, whether it’s moving to a different city or starting on a contract basis and working your way to salaried employee status.