The U.S. labor market remains tough for today's young high school and college graduates, but their job prospects are brighter than they were for past groups of students who graduated in the wake of the Great Recession, finds a new analysis by the Economic Policy Institute (EPI)
Nonetheless, recent graduates continue to experience poor wage growth as well as unemployment and underemployment rates higher than pre-recession levels, according to the liberal think tank. Unemployment rates among young college and high school graduates also remain higher for blacks and Hispanics than whites.
"Though there has been improvement since the unemployment rate for young workers peaked in 2010, the labor market has still not completely recovered," reads EPI's report. "Thus, the class of 2016 will be the eighth consecutive graduating class to enter the labor market during a period of weakness. The evidence suggests that because of their unlucky timing -- in other words, through absolutely no fault of their own -- this cohort is likely to fare poorly for at least the next decade."
EPI researchers examined data for recent high school graduates ages 17 to 20 and college graduates ages 21 to 24 who are not enrolled in additional schooling.
According to the findings, the rates of unemployment and underemployment for young college grads are currently 5.6 percent and 12.6 percent, respectively. Back in 2007, this group had an unemployment rate of 5.5 percent and an underemployment rate of 9.6 percent.
The current jobless rate for young high school grads is 17.9 percent, compared to 15.9 percent in 2007. For this demographic, the underemployment rate is 33.7 percent, higher than the 2007 figure of 26.8 percent.
There are striking racial disparities in unemployment and underemployment among recent high school and college grads, EPI's analysis showed.
For young high school grads, whites have a 14.6 percent jobless rate, followed by Hispanics at 17.2 percent and blacks at 28.4 percent, according to the latest data.
Among young college grads, the unemployment rate is 4.7 percent among whites, 6.5 percent among Hispanics and 9.4 percent among blacks
The report also looked at young workers ages 24 to 29, finding that 65.8 percent of them have no college degree.
"The job market is improving but many young graduates are still suffering," said report co-author and EPI senior economist Elise Gould. "What's more, it's important to realize that most young workers do not have a college degree. We have to do more to improve the availability -- and the quality -- of jobs for young high school graduates."
The report's authors say measures that "would boost aggregate demand and encourage full employment" and lift up labor standards should be implemented to improve wages and job prospects for young graduates.
EPI also supports policies that would, among other things, increase the minimum wage and provide earned paid sick leave to workers.
When it comes to wages, recent graduates saw a slight improvement over the past year. Real wages grew 3.3 percent for young high school grads, increasing to an average hourly wage of $10.66, and 3.1 percent for young college graduates to $18.53 an hour. Those wages roughly equal annual salaries of $22,200 and $38,500 for full-time workers.
"However, this recent wage growth is largely driven by a decline in inflation, which is unlikely to lead to durable wage growth in the future," EPI researchers noted. "Moreover, even with last year's increase, wages for young high school and college graduates are still about the same or lower than they were in 2000."
Gender wage gaps also persist among recent grads.
Young female high school and college grads earn 92 cents and 79 cents, on average, for every dollar paid to their male counterparts, according to the report.
"Even right out of school, women are paid less than men," said report co-author and EPI research assistant Tanyell Cooke. "By definition, they have the same experience, and yet young women are paid less. This wage gap persists and results in lower earnings throughout a woman's career."
Amid sluggish wage growth for recent grads, college tuition costs have increased.
From 2000 to 2016, average college costs went up 69 percent for public universities and nearly 43 percent for private higher education institutions, according to the research. Student borrowers today are shouldering 92 percent more debt, on average, than they were in 2004.
"The high cost of college is one likely reason that college enrollment rates did not increase above their long-run trend in the last several years despite the lack of job opportunities during the Great Recession and its aftermath," the researchers wrote.
The report comes as Illinois higher education institutions and college students grapple with the financial effects of the epic state budget standoff in Springfield. Illinois Gov. Bruce Rauner and Democratic lawmakers have yet to agree on a budget for the fiscal year that began July 1. As a result, higher education institutions and a college tuition assistance program for low-income students have gone unfunded for nearly 10 months.
During the monthslong budget impasse, MAP grant recipients have faced uncertainty over how they will pay for college. At least one higher education institution, Chicago State University, has been pushed to the brink of closure and many others have made or are planning cutbacks in staff and services.
But the state's colleges, universities and students could soon be getting some short-term relief, now that a bipartisan stopgap funding plan for higher education passed the Illinois General Assembly Friday. The proposal, which is expected to get the governor's signature, would steer $600 million to higher education institutions and the Monetary Award Program. Under the proposal, nearly $170 million would be distributed for MAP tuition grants for low-income Illinois students.
In response to today's passage of the stopgap funding measure, Illinois Comptroller Leslie Munger issued a statement, saying she has directed her "staff to begin processing payments immediately, giving top priority to students and the institutions that are suffering the most."