Saturday, May 30, 2015

The Class of 2015

Alyssa Davis, Will Kimball and Elise Gould
Economic Policy Institute
May 27, 2015

Some Key Findings:
  • Wages of young college and high school graduates are performing poorly—and are substantially lower today than in 2000. The real (inflation-adjusted) wages of young high school graduates are 5.5 percent lower today than in 2000, and the wages of young college graduates are 2.5 percent lower.
  • Women in particular have seen large declines in hourly wages, among both high school and college graduates.
  • Young high school and college graduates’ wages follow the same trends as those of older graduates, signaling that the slowdown in young graduates’ wages stems from a wider wage growth problem.
  • The overall unemployment rates, idling rates, and wages of young graduates mask substantial racial and ethnic disparities in these measures.
  • The unemployment rates of blacks and Hispanics are substantially higher than the unemployment rates of white non-Hispanics, for both young high school graduates and young college graduates.
  • The share of young black and Hispanic graduates who remain unemployed and not enrolled in further schooling is substantially higher than that of white graduates.
  • The cost of higher education has grown far more rapidly than median family income, leaving students with little choice but to take out loans which, upon graduating into a labor market with limited job opportunities, they may not have the funds to repay. From the 1983–1984 enrollment year to the 2013–2014 enrollment year, the inflation-adjusted cost of a four-year education, including tuition, fees, and room and board, increased 125.7 percent for private school and 129.0 percent for public school (according to the College Board).
  • Between 2004 and 2014, there was a 92 percent increase in the number of student loan borrowers and a 74 percent increase in average student loan balances (according to the Federal Reserve Bank of New York).
  • Due to young college graduates’ limited job opportunities, stagnating wages, and the rising cost of higher education, college is becoming an increasingly difficult investment.
  • Graduating in a weak economy has long-lasting economic consequences. Economic research suggests that for the next 10 to 15 years, those in the Class of 2015 will likely earn less than if they had graduated when job opportunities were plentiful.


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