This year’s graduating college class faces an uncertain future in the job market.
That is actually good news. Unlike the graduating classes of the past few years, this year’s graduates have at least some hope of landing a job. The slow but steady recovery and emergence from the Great Recession is beginning to hit the job market at just the right time.
The Texas economy added more than 64,000 jobs in the month of April and the unemployment rate dipped to 5.2 percent. That’s where it was in September 2008, just as the Great Recession began taking hold here. Texas created more than one out of every five jobs in the U.S. in April. So if you’re going to be a college graduate this year, it’s a good thing to be one in Texas.
The Class of 2014 has spent the past four years insulated from the job market, having started college at a time when U.S. unemployment topped out at 10 percent. This year’s graduating class lost a lot of classmates to the Great Recession. Job losses among working parents took their toll on the Class of 2014. Yet those who have managed to survive and earn a degree these past four years were fortunate enough to avoid the dismal job markets faced by 2011, 2012 and 2013 graduates.
The job hunt this year will be better but certainly no picnic. Competition for jobs remains fierce as businesses continue to be cautious on the hiring front. The unemployment rate for 2013 college graduates was 10.9 percent as of last fall, down from 13.3 percent for 2012 graduates.
Not all job markets are dim. The so-called STEM fields — science, technology, engineering and math — continue to have the most demand and promise the best return on investment. That trend is not likely to change anytime soon. We published a story in Friday’s edition of the Trib about how the Waco Independent School District is planning a partnership with Rice University to help students as young as pre-kindergarten learn concepts taught in STEM courses. STEM courses are the wave of the future. According to U.S. News & World Report, most engineering degrees offer starting salaries in the $65,000 range, topping out in six figures.
Technology is clearly driving the economy and the college selection process. Gone are the days when college students decided on a major based on their personal interests and likes. Jobs are too hard to come by, and college costs too high for anyone to invest the time and effort without a decent return on their degree. Today’s students are doing a much better job of researching the long-term job prospects of any particular major before committing to it. Considering this year’s graduating class will owe an average of $29,000 in student loans, it’s more important than ever to earn a degree in a field with a future.
According to the Labor Department, more than 250,000 college graduates from last year were stuck in minimum-wage jobs, earning $7.25 an hour as late as October. They got there because there were no jobs available in their chosen fields at the time they graduated. It’s hard to pay back student loans on $7.25 an hour.
Our economy is growing, but not very fast. In fact, a poll by Fox News conducted in January found that 74 percent of the country believes we’re still in a recession — the same one that technically ended in 2010.
Such poll results are becoming more difficult to explain. The stock market is hitting a new historical high every other week, unemployment in the U.S. is down to 6.3 percent and the National Federation of Independent Businesses reports confidence in the economy among its members is at a six-year high. Here in Waco the unemployment rate fell to 4.4 percent in April, almost a full percentage point lower than the state rate. So how is it that we all think we’re still in a recession?
Federal Reserve Chairman Janet Yellen offered the following testimony before Congress just last week: “Even with recent declines in the unemployment rate, it continues to be elevated. Moreover, both the share of the labor force that has been unemployed for more than six months and the number of individuals who work part time but would prefer a full-time job are at historically high levels. In addition, most measures of labor compensation have been rising slowly — another signal that a substantial amount of slack remains in the labor market.”
In other words, things are improving slowly, but there are still a lot of underemployed people out there. Some of those will be 2014 college graduates. Just not as many as last year.
Master’s degree, anyone?
Steve Boggs is editor of the Tribune-Herald. Email firstname.lastname@example.org