According to the June 2011, report from the Bureau of Labor Statistics (BLS), the unemployment rate for young graduates with bachelor’s degrees was a staggering 12%–substantially higher than for any other graduate cohort. But, as most college careers offices and development offices can tell you, the recent recession has also adversely affected large numbers of their alumni. The term “jobless recovery” is apt.
The statistics tell a troubling story for anyone hoping for a quick turnaround in career prospects. There are clear reasons for pessimism:
Seniors are not retiring Those within ten years of retirement at the time of the economic crash of 2008, are likely to have had a significant set-back in retirement assets—even if they were brave enough to stay invested when the market dropped. The impact of this reality can be seen in the 22% increase in those bachelor’s degree grads aged over 65 who have chosen to be in the labor force since 2008. Almost 200,000 more people in this age group were employed in 2011 than were employed just three years earlier. Two thirds of this growth can be explained by the increased population of older college grads; the remainder are directly attributable to seniors working longer.
Baby-boomers have been particularly hard hit by the recession The group that probably feels the most pressure to increase retirement savings are those in the 55-64 year old cohort. Unfortunately, they are the ones most affected by their older peers hanging on to employment. The baby-boomer bubble has exacerbated the situation. Between 2008 and 2011, there was an 18% increase in the 55-64 year old cohort, leading to the worst increase in unemployment rates of any age group of bachelor’s degree graduates. In June, 2008, their unemployment rate was 2.9%. Three years later it was 6.5%–a 124% increase. Once laid off, it is particularly difficult for those over 55 to find new work.
There is significant pent-up demand for employment In June, 2011, there were 900,000 more bachelor’s degree graduates who wanted, but could not find, work than three years earlier. Adding hundreds of thousands of jobs that require post-secondary education is likely to take years.
The employment situation of older graduates should also be a concern to anyone who is invested in the success of educated young people.
When seniors do not retire, it causes stresses on every other group in the workforce. Those who are employed find fewer promotions; salaries are depressed; and, employees at all levels face difficulties obtaining suitable employment.
For those on the bottom rung of the career ladder, the poor economic climate may mean accepting a position that does not require a college degree—a reality that few are willing to accept.
Note: All statistics come from BLS Table 10 (unpublished). Future blog posts will discuss how the employment crisis for young college graduates can be alleviated, and what role students and their colleges will need to play to ensure their employability.