If you are a young college grad looking for a job, it’s tough out there. But how bad is it, really?
Bad—but not as bad as it could be. That may be cold comfort if you have been hunting through want ads and redoing your resume for the 20th time. The numbers, though, don’t lie.
In June 2009, the unemployment rate for young college graduates was 7.3%. By comparison, the unemployment rate for young high school graduates with no college was 16.3%, more than twice as high.* Education pays—not just in better wages, but in a lower likelihood of unemployment, even in these tough times.
What do these numbers mean? By ‘young college graduates’, we mean all U.S. residents who are 20-29 and have finished a bachelor’s degree. ‘Young high school graduates with no college” includes all U.S. residents who are 20-29, have finished high school, but have not started college.
The government’s monthly survey puts these people into three categories: Working; actively looking for a job; and not looking for work (no, “laying on the beach until the sun goes down” is not an acceptable answer). You are “in the labor force” if you fall into one of the first two categories—either already employed, or actively searching for one.
The unemployment rate is the percentage of the labor force who don’t have jobs, but are actively searching. So in June 2009, 7.3% of the young college-educated labor force was unemployed.
One way to think of this number: If you draw a card randomly out of a deck of cards, the chances of you pulling an ace is slightly bigger than 7.3% (actually it’s 1 out of 13, which is 7.7%). Take a deck of cards and pick a card—if you get an ace, you are unemployed. Otherwise you have a job.
Now, don’t get me wrong. The labor market for young college graduates is a lot worse than previous years. For example, in June 2007, before the recession started, the unemployment rate for young college graduates was only 4.1%. That’s a big difference from today.
Still, when it comes to finding a job, it’s still better to have a college degree.
*Not seasonally adjusted. These results come from the author’s tabulations of the June 2009 Current Population Survey. They are consistent with published data.