It has been the way of thinking to most people that the way to career and financial success in the US is by obtaining a college degree. Statistical data would back this theory very strongly. The college graduate statistics say that college graduates are more likely to get a high-paying job compared to a person without a college degree. This has been the traditional attraction to obtaining a college education. But, the prospective college student has many things to take into consideration in regards to pursuing a college education. With the rising cost of college education, the burgeoning education loan debt, and more recently: the poor prospects of college graduate unemployment looms greatly in people’s minds.
College graduates being unemployed and underemployed is becoming a problem, especially in the U.S.A. Over 50% of new graduates are getting jobs that do not require a diploma of that caliber. Some are even there for the next 5 years. Even race plays a part in this: African Americans are more likely to face unemployment vs. Caucasians. The recent COVID-19 pandemic has pushed the whole world into unprecedented circumstances, around the world with a forced slow down in economies and mass unemployment. The graduating class of 2020 is entering into the most unstable global market since the great depression.
How Many College Graduates Are Unemployed?
As of January 2020, the college graduate unemployment rate with a bachelor’s degree or higher in the United States is 2%. According to the University of Washington, the underemployment rate of this same demographic for their first job is 53%. Which means they are either: underpaid or overqualified for the job that they got ex. working in the fast-food industry.
The same demographic in 2019 had a 2.4% unemployment rate, a significantly larger number. A global estimate conducted in 2017 on the number of underemployed graduates consisting of America, Australia, Canada, China, and the UK, the final number was 27.46%.
Quick Facts About Graduate Unemployment
- The average pay difference of a high school graduate’s pay and a person with a bachelor’s degree or higher is 74.5%.
- The unemployment rate for college graduates is 2.4%
- Approximately 53% of new graduates are either unemployed or underemployed.
- The average college graduate takes around 6 months to find their first job.
- People with a bachelor’s degree have a 2.1% unemployment rate.
- Those with an associate major have an unemployment rate of 3.5%.
- Those with high school degrees have an unemployment rate of 4.3%.
Percentage of Unemployed Graduates Per Year
According to the U.S. Bureau of Labour Statistics, the percentages are as following:
- 2017, January: percentage of unemployed graduates with a bachelor’s degree or greater was: 2.5%
- 2017, June: 2.3%
- 2018, January: 2.1%
- 2018, June:2.3%
- 2019, January: 2.4%
- 2019, June: 2.1%
- 2020, January: 2.0%
As you can see, the number varies throughout the years. This depends on many factors like the student’s major and field of work, the economy, and the demand for specific types of work. It is a supply and demand system.
High School Diploma Vs Bachelor’s Degree or Higher
Just looking at the unemployment rate:
- High school diploma: 4.4%
- Bachelor’s and above: 2.1%
- High school diploma: 4.1%
- Bachelor’s and above: 2.3%
- High school diploma: 3.7%
- Bachelor’s and above: 2.4%
- High school diploma: 3.9%
- Bachelor’s and above: 2.1%
- High school diploma: 3.8%
- Bachelor’s and above: 2.0%
Now the wage difference. The median pay for these two demographics is 58.47%. Meaning that if a person with a bachelor’s degree is earning $1281/week the person with a high school diploma earns about $749/week.
Recent Graduate Unemployment Job Statistics
As of January 2020, the unemployment rate is 2.1% of students with a bachelor’s degree, and about 53% of the students are underemployed. As COVID-19 affects more people and businesses, the job opportunities will also be greatly affected. This varies from university to university, or if you have an associates degree, and it also depends on the level of education obtained.
Associates degree holders unemployment rates are:
- 2018: 3.4%
- 2019: 3.4%
- 2020: 2.8%
This is higher than the average unemployment rate, but it is still lower than a demographic with a bachelor’s degree and above.
Demographics of Unemployed College Graduates
A breakdown by college graduates job statistics revealed the following information:
(For all purposes this is men and women there were no studies that included non- binary.)
- Male demographic unemployment rate: 2% for those with a bachelor’s degree or higher.
- Female demographic unemployment rate: 2.05% for those that have a bachelor’s degree or higher.
As you can see here, the difference between men and women is not significant.
- Caucasian demographic unemployment rate: 1.9%
- African American demographic unemployment rate: 2.7%
- Asian demographic unemployment rate: 2.25%
- Mexican and Latino demographic unemployment rate: 2.4%
As you can see here, the difference between the races is a lot more significant, the biggest difference being 0.8%.
These stats are from the U.S. Bureau of Labour Statistics:
- 16-19 years old: 14.01%
- 20-24 years old: 8.17%
- 25-54 years old (This is typically when people have a bachelor’s degree and above.): 3.81%
- 55+ years old: 3.32%
The changes here are understandable as the average level of education increases with age. Aforementioned, those with higher education tend to have a lower unemployment rate.
Statistics on College Graduates Getting Jobs
On average, it takes a college student around 6 months to get their first job. Previously, it has taken college graduates less time to get jobs, but now that has increased. As this COVID-19 causes evermore disruptions in industries, jobs are not being created. In 2008 the economy experienced a recession, and college graduates’ unemployment rate spiked, creating a situation similar to what is happening now.
Unemployment Rate by Major:
A study conducted by Business Insider with respect to the unemployment rate by college major revealed that these are the worst job prospects a major can get you:
Unemployment rate: 7.8%
- Mass media teaches the theory and practice of different types of audio, visual, and written media. This branch often is a pathway to being a journalist or broadcast news. However, due to cuts in the industry and poor projections, this has become a risky path to take.
- The underemployment rate of mass media graduates is 55.2%.
Unemployment rate: 6.7%
- Students in this college streams specialize in humanities, social sciences, physical sciences, and the arts. The broad scope of the liberal arts makes it difficult to choose a career path, so some chose to add a minor to hone in on to a career path.
- The underemployment rate for liberal arts graduates is 58.4%.
Unemployment rate: 6.6%
- Anthropology is the study of human evolution, with a specific focus on culture, biology, and language. As there are not many fields directly relating to this major, it creates a substantial amount of competition for those few fields.
- The underemployment rate for anthropology graduates is 59.1%.
Unemployment rate: 6.2%
- Philosophy focuses on the study of debate, logic, thought, and ethics. Aside from becoming a philosophy professor, there are no common professions for these graduates.
- The underemployment rate for philosophy graduates is 50.9%
Unemployment rate: 6.1%
- Construction services teach its graduates about cost estimating, facilities management, building codes, budgeting, and construction safety. I believe this is because the companies are mostly contract-based, meaning they only hire people for a limited amount of time.
- underemployment rate: 34.0%
College Majors With the Lowest Unemployment Rate
Theology and Religion
- Unemployment rate: 1.0%
- Underemployment rate: 46.9%
The reason behind this is because there is little competition in this field of work. Mainly because most of the students are religious and wish to pursue that path.
- Unemployment rate: 1.0%
- Underemployment rate: 50.9%
Medical technicians are always needed to take the samples and get information on patients so that a correct diagnosis gets given. Medical technicians are key players in the medical field.
- Unemployment rate: 1.7%
- Underemployment rate: 47.4%
General education, the curriculum includes topics related to learning, teaching, and education administration. As a result, general education majors are likely to work as teachers or administrators in public or private schools.
Public Policy and Logic
- Unemployment rate: 1.7%
- Underemployment rate: 62.8%
Public policy focuses on coursework in politics, economics, and sociology to solve different policy issues. Potential career paths include government relations, legal services, nonprofit management, and community development. Despite such a low unemployment rate, these graduates have one of the highest underemployment rates.
- Unemployment rate: 1.9%
The job of a civil engineer is an important one. They work both in the private sector and the public sector. Although they are more known for working in the public sector. Civil engineers conceive, design, build, supervise, operate, construct, and maintain infrastructure projects and systems.
College Student Employment Rates
1. The average 2018 college graduate with a bachelor’s degree and higher the employment rate is 76.5%.
The reason that the employment rate and the unemployment rate do not add up is because of the ways that the census is calculated.
Unemployment rate calculation: The unemployment rate is the percentage of unemployment calculated by dividing the number of unemployed individuals by the number of individuals currently employed in the labor force.
Statistics on College Graduates Vs Non-Graduates
- The demographic that has a high school diploma are 1.8% more unemployed when compared to the demographic of people with a bachelor’s degree or higher.
- On average, the demographic with a high school diploma earn about 58.47% of the pay compared to the demographic with a bachelor’s and above. For example a person with a bachelor’s and higher earns $100/hour the person with a high school diploma earns 58.47%.
- Non-graduates mostly work as the majority of the labor force, while graduates typically work in management positions.
- In 2019, fewer than half of Americans between the age of 25 and 35 obtained any credentials beyond a high school diploma.
Trade School Unemployment Rate
2. In 2018, trade schools had an average unemployment rate of 5.3%.
Although, currently they may have a higher employment rate than the university demographic. These graduates are needed because most people think that university is the only way to go, but people who can do hands-on tasks.
Projections for the Future
As you may or may not know, COVID-19 has affected the job market because of quarantine has caused shutdowns across the globe.
3. For 2020 the federal deficit is expected to be 3.7 trillion.
The US is being hit especially hard because it is fueled mainly by consumerism and because everything hit the brakes, relatively little money is coming into the US.
4. The unemployment rate projections aren’t that good, the expected unemployment rate for the second quarter is 14%, a high seen last, in the great depression.
The demographic without any college or trade experience is probably going to take the majority of the hit.
The economy will experience a sharp decrease in the second quarter of 2020 stemming from factors related to the pandemic. Although, in the third-quarter economic activity is expected to increase, as concerns about the pandemic decrease, state and local governments ease up, on bans on public gatherings, and other measures restraining economic activity.
Though the economy might recover a little, the effects of this pandemic are going to linger for a while longer.
As the new crop of high school graduates looks into the prospects of college education, all these factors are at the forefront of their minds. The rising college graduate’s unemployment rate and the skyrocketing fees of a college education make it serious consideration, as an investor considering the dividends on their investments. In an increasingly global economic environment, many traditional unskilled jobs are being moved overseas where wages are much lower and a workforce readily available for a fraction of the cost compared to North America. China, Brazil, Indonesia, Taiwan, India, Mexico, etc. are increasingly attractive destinations to take over the production of goods. These countries are also increasingly putting out highly educated graduates coming to the West for better-paying jobs, higher levels of education, and higher standards of living. These conditions create increased competition for the in-demand streams of college education and the prospects in the job market thereafter.
All things considered, at this point, a college-level education is still the best way to a successful career, and a way to move up the socio-economic ladder. The challenges notwithstanding, a college degree is still a very attractive proposition.
Frequently Asked Questions
What percentage of college students get a job after they graduate?
For those that got a bachelor’s degree in 2019, 76.0% are employed.
What percentage of the workforce has a college degree?
66.4% of the workforce has at least some college experience or an associate’s degree. For the past 25 years, the number of people with at least some college experience has been on the rise.
What race has the highest college graduation rate?
According to the US Bureau of Labour Statistics, the demographic with the highest graduation rate was Asian Americans. Over 60% of them had educational attainment of a bachelor’s degree and above.
What is the meaning of graduate unemployment?
The meaning of graduate unemployment is the number of graduates in a specific demographic that is not employed. Sometimes we subdivide the demographic into multiple different ones like age, or race, things like that.
What does underemployment mean?
Underemployment means that a person is overqualified for a job that they are doing. For example a person with a bachelor’s degree working in a fast-food restaurant.
What is the average pay of college graduates?
Full-time workers aged 25 and older had average weekly earnings of $975. The demographic without a high school diploma had average weekly earnings of $606, compared to $749 for high school graduates (no college), and the $874 for workers with some college or an associate degree. The demographic with a bachelor’s degree had average weekly earnings of $1,281. The demographic with an advanced degree had median weekly earnings of $1,559.
What percentage of the earning of all workers do college graduates account for?
The earnings of high school graduates were 77% of all worker earnings. Workers with a bachelor’s degree earned 131% of all worker earnings, while workers with an advanced degree earned 160%. Over the past two decades, the earnings of workers with a bachelor’s degree have ranged from127% and 138% of the earnings of all workers. The earnings of workers with an advanced degree have been between 159% and 175% of all worker earnings.
The way that this was calculated, as they got the average pay, and compared it to the pay of these demographics.
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