It has taken 10 years, but the job market for young college graduates has largely recovered to where it was in 2007, before the Great Recession. The recent unemployment rate for college graduates ages 21 to 24 was 5.6 percent, basically the same as in 2007. The wages of young college graduates have also recovered, to $19.18 an hour.
For the college Class of 2017, those improvements offer a better starting point than was true for those who graduated in earlier post-recession classes. What they don’t guarantee, however, is prosperity. While the labor market for young college graduates has improved from its recession-era lows, it is still not showing robust signs of full employment, in which everyone who wants a job has one, prices are stable and wages are rising.
To take one example of labor market weakness, underemployment among young college graduates is still elevated, with 9.9 percent “idled” or “sidelined,” compared with 8.4 percent in 2007, according to research by the Economic Policy Institute. These graduates are not counted as unemployed because they are neither working nor looking for work. Nor are they enrolled in further education. Another sign of underemployment is the share of recent college graduates who work in jobs that do not require a college degree. Recently, 43.5 percent of college graduates ages 22 to 27 were in “non-college” jobs, compared with 41.8 percent in 2007, according to the Federal Reserve Bank of New York.
Elevated underemployment indicates the absence of professional job opportunities, which in turn acts as a brake on wage growth. Worse, job challenges among college-educated workers generally mean even tougher times for black and Hispanic graduates, as well as for young people who do not go to college.
College graduates who are members of racial and ethnic minorities have far…