No Joke: The Class of 2015 Will Make Less Than the Class of 2000

May 27th 2015

Laura Donovan

Though the Class of 2015 has better job prospects than the post-recession classes of 2009-2014, things are still not great for recent graduates, according to a new report by the Economic Policy Institute (EPI).

The findings reveal that the Class of 2015 will face elevated levels of unemployment and underemployment. The unemployment rate for young college graduates is 7.2 percent (compared to 5.5 percent in 2007), and the underemployment rate is nearly 15 percent (compared to 9.6 percent in 2007). Young high school graduates are looking at an even tougher environment: their unemployment rate is almost 20 percent (compared to 15.9 percent in 2007), and their underemployment rate close to 40 percent (compared to 26.8 percent in 2007).

"Things are starting to look up for young graduates, but we’re not there yet," Alyssa Davis, an EPI researcher, told ATTN:. "The Class of 2015 faces a lot of challenges, including high unemployment and underemployment, stagnant wages, and high levels of student debt. Young workers might be a unique group, but the solutions to these problems is not unique to them. The policies that will improve job prospects and wages for young graduates are the same that will help all workers."

Young people are still being paid less today than in 2000.

Wages for recent high school and college grads are down. Per the EPI report, "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."

Female college and high school graduates have experienced substantial decreases in hourly wages. This isn't all that surprising given a recent Institute for Women's Policy Research (IWPR) report that found women will have to wait more than four decades for the gender wage gap to close. On average, women take home around 78 cents for every dollar a man earns.

Why young people are hit hardest in bad economic times.

The financial crisis of 2007-2008 brought about the "longest, most severe period of economic weakness" in more than 70 years, according to the EPI, and young workers always get the short end of the stick in tough economic climates. During economic crises and expansions, the unemployment rate for those under 25 tends to be double the average unemployment rate, as new job seekers are often overlooked for more experienced candidates. Those who've secured employment aren't necessarily in the clear either, as junior workers are more likely to face lay-offs during hard times.

Unemployment under 25

Underemployment is also alarming for young people, as it often forces college graduates to work in jobs that don't require degrees, and then those college graduates take jobs usually reserved for high school graduates. It also means that high school and college grads alike are settling for part-time work when they want and need full-time employment:


While it could always be worse for young graduates, the Class of 2015 still has some pretty rough road ahead, especially because they're entering a tough labor market while also under the burden of student loan debt.

Who is "idled" by the economy?

Many recent graduates remain "idled" by the economy in post-recession times. "Idled" means that they're neither in school nor employed.

For young college graduates, 10.5 percent are idled (compared to 8.4 percent in 2007), and 16.3 percent of high school grads are idled (compared to 13.7 percent in 2007).

There's a general belief that young people enroll in higher education in order to wait out bad economic times, but the EPI found "there is little evidence of an uptick in enrollment due to the Great Recession, and in fact, enrollment plummeted over 2012–2014 and still has not recovered." As stressful as a bad economy may seem to young people, perhaps our country's massive student debt problem is even scarier, thus discouraging them from taking out more loans or spending any more time away from the workforce.

Black high school graduates still face challenges.

Black high school graduates dealt with a high unemployment rate prior to the 2007-2008 economic disaster because their unemployed rate never improved after the recession of 2000. They're 1.5 times more likely to be out of work than their Hispanic counterparts and 1.7 times more likely to be unemployed than whites.

Unemployment high school grads by race/ethnicity

Why graduating in a bad economy can have a lifelong impact.

The EPI notes that graduating from college in a lousy economy can have long-term, negative effects on young people. This is consistent with 2009 research conducted by Yale School of Management economist Lisa Kahn, who found that recession and post-recession grads endure a 2.5 percent loss in wages even 15 years after completing school, and those who start working in a poor economic climate are less likely to achieve major professional milestones like promotions.

"This is suggestive that workers who graduate in bad economies are unable to fully shift into better jobs after the economy picks up," Kahn wrote in 2009.

Also that year, EPI researcher Kathryn Edwards told The Washington Times that those who graduate in bad economies take the "beggars can't be choosers" approach to job hunting, desperate to take anything they can get. Once employed, they are also less likely to lobby for higher paychecks because landing work is enough of a challenge.

"It used to be common that graduates had multiple offers in place, and that's not happening now," Edwards said. "So they won't be able to negotiate for higher wages. And it makes economic sense that if you start lower, you're more likely to end lower."