Grads finding a tough labor market
Plenty has been written about the difficulty younger folks are having in the job market of late. The unemployment rate for workers ages 16 to 24 peaked close to 20 percent during the recession and has declined only marginally since.
Those recently graduating from college are supposed to have a better time of it, thanks to higher-level skills that help them compete for job openings. But traditional government data on employment do not specifically track these freshly minted workers, so a person has to look to other data sources to see how this population has fared during and since the recession.
One nontraditional source in Minnesota is a survey administered to all 31 higher education institutions by the Minnesota System of Colleges and Universities, which surveys its graduates every year to see if they are gainfully employed during the subsequent year in a job related to the program or major they studied in school. Survey data across these institutions show that graduates were having a tougher time landing a job in their field of study. Rates were holding steady for graduates through 2007, but the following two years have proven difficult for graduates from both 4-year universities and 2-year colleges (see chart).
As with any survey, overall results mask a lot of variance among institutions. Three colleges had placement rates above 90 percent in 2009, while seven institutions (including one university) had rates below 70 percent.
There are some additional qualifiers to keep in mind for context. Unemployment rates have been improving of late, and this survey suffers a bit of a time lag; the survey for 2010 grads (conducted last year) has not yet been published. This survey also depends on self-reports from graduates and response rates vary among institutions, both of which can induce some measurement error. Responses include, but do not distinguish between, those working part time or full time, and this composition possibly shifted as well during the recession given a slack job market. Neither does the survey publish responses from graduates employed in a field unrelated to their course of study, though a few institutions reported total employment on an anecdotal basis. The Inver Hills Community College, for example, reported that 68 percent of 2009 grads were employed in a related field during the following year and that 89 percent of all graduates found employment of some sort.
Despite caveats, this survey has the benefit of longevity and relative consistency over time, which makes it an interesting trend barometer. The ramifications for this labor decline are many. For example, difficulty in the labor market is one of the reasons why student loan defaults are on the rise, which is the subject of an upcoming article in the April fedgazette.