The latest U.S. recession has created a nightmare scenario for job seekers. Since December 2007, more than eight million positions have been cut from the workforce.
This news may seem particularly bleak for young people given that the economy must add at least 100,000 jobs each month to simply accommodate new workers entering the job market. In a world with 9.8% unemployment and huge numbers of experienced professionals already looking for work in a saturated job market, does it even make sense for young people to invest in a costly education?
According to the College Board, a nonprofit association of educational organizations, yes. Despite the fact that college costs are on the rise and opportunities are scarce, the association's recently released Education Pays 2010 suggests that people with college degrees are less likely to experience unemployment. In fact, since 2007, the jobless rate between high school and college grads has grown from just over two percent to about five percent.
College graduates are not only likely to be more immune to joblessness in the economy, they also earn significantly more than individuals who end their education after high school. In 2008, 4-year college graduates earned an average salary of $55,700 compared to the $33,800 annual earnings of high school grads.
Challenges for New Graduates
While higher employment rates and earning potential would seem to suggest that earning a college degree represents time and money well spent, a closer look at the numbers can reveal some disconcerting figures - particularly for young students.
While the current rate of unemployment for college grads (5.1 percent) may compare favorably to that of high school graduates (10 percent), the distinction is less clear when it comes to college graduates younger than 25 years old. Among these individuals, the unemployment rate has averaged 9.2 percent over the past year. That is not far from the figure for the general population.
A recent editorial in The New York Times pointed out this fact while bringing to light another aspect of what a stagnant economy can mean for recent grads. Individuals who enter their post-college-graduation years jobless or forced into low-level positions may earn less and experience 'lower levels of career attainment' over their lifetimes.
The bottom line? Earning a college degree can set you up for greater success in the job market and help lead to a more lucrative career than can a high school diploma. In today's climate of economic uncertainty, though, the benefits of a college degree can be more limited than in past boom times. New college graduates should be extra attentive in their career planning to ensure they're best prepared to meet the challenges of the current economy.