Anemic job growth reports in have economists and job seekers feeling anxious.
A mere 160,000 jobs were added in April, as reported by the Labor Department, missing the prediction mark by a wide margin set by other economists. Job seekers in the worst position are young college and high school graduates as indicated by the Economic Policy Institute's latest report, "The Class of 2016." Tomorrow will mark an important jobs report detailing how job seekers fared in May, but the writing already seems to be on the wall.
Younger job applicants face lower wages, underemployment and unemployment in a weak, albeit recovering market, with recent college grads taking on more debt than previous generations, as found in the last report.
Illuminated by the EPI were drastic differences in the employability between recent college versus high school graduates. Despite the ongoing drumbeat that more students should seek a college degree, 65.8% of the surveyed individuals ages 24 to 29 did not have a degree.
Not obtaining that college degree, as shown in the report, can hurt you. The disparity in unemployment between college and high school graduates was vast with only 5.6% of those with a college degree were unemployed compared to 17.9% among those with only a high school diploma. Approximately 12.6% of college grads were underemployed (working in a job that pays less than what they should be earning) versus 33.7% of underemployed high school grads.
The wage gap is also pronounced with young high school graduates making an average of $10.66 per hour, whereas young college graduates are at $18.53. Report authors note that high school graduate wages have dropped by 2.5% since the year 2000, whereas college wages have not dropped but crept up by a miniscule amount.
Jobs Are There--If You Know Where To Look
Despite ominous news, online job resource Indeed says recent college grads shouldn't paint themselves into a corner when it comes to the job search.
"Not enough people consider the broader picture," says Tara Sinclair, chief economist for Indeed. "Where are the jobs? Who is hiring? What sectors will continue to grow in the future that I'm interested in? These are all questions job hunters should be asking. Sometimes we tend to focus too much on ourselves and our circumstances, and not where we align with the bigger picture."
Sinclair asserts the job market is strong for recent college grads. "We see strong job demand in a variety of sectors, particularly in perennially strong fields of healthcare and technology, but also in financial services, education, and human resources," she says. "Unemployment has consistently been lower for people with a college degree, and unemployment today across the board has halved since its peak in 2009."
That being said, the economy continues to grapple with relatively low wage growth, Sinclair adds. "A key challenge for graduates will be finding work, and a location, that allows them to move out of their parents' homes, pay off loans, and get positions with strong future potential," she says. "If you're in the position of having multiple offers to choose between, you should think carefully about the best decision for your future by focusing on the position with the best long-term trajectory."
Those with a high school diploma are facing a difficult job market, Sinclair agrees. She cites the EPI unemployment data for high school degreed individuals and says, "That said, there is demand in a number of areas that need training and skills, but may not require a college degree, such as transportation, hospitality, and food service," Sinclair says. "These jobs may not be full-time career choices for some people, but they can be a great way to get a foot in the door of the labor market."
With regard to college degreed individuals, the Millennial generation is the most educated generation to date, but may be relying too much on their education to make up what they're lacking in experience, Sinclair says. "To date only 34% of millennials have a college degree; that's still only a small gain on the overall population at 30%," she says.
Trade and Technical Jobs Are Hot
Four year college not your thing? Newly minted high school graduates may forget about checking out the trades, which can have a huge pay out and job satisfaction. Sean Lynch, legislative and public affairs manager for the Association for Career and Technical Education, says a number of promising opportunities exist.
"The future looks bright for students entering many career and technical education fields - oftentimes they are closely aligned with careers that are experiencing critical skills shortages such as health care, advanced manufacturing and information technology, so these graduates are highly sought," he says.
Traditional career and technical education (CTE) fields include HVAC technicians, for instance. "The average HVAC technician salary, according to the Department of Labor's data is $45,110," Lynch says. "However, I'd also emphasize some fields that folks don't always think of when they hear the term CTE, such as health care CTE programs that prepare students for careers including radiology technician at $41,260 or dental hygienist at $72,330."
Lynch suggests job seekers check out mynextmove.org, published by Department of Labor's Employment and Training Administration where students can partner skills and interests with jobs in nearly any industry. He says job seekers can glean a variety of information on various fields including salary averages and the type of education needed to meet qualifications or certifications.
One advantage to those seeking a technical, trade degree or certification is the pathway to education can be customized to the training need. "Associate's degrees are one form of credentialing that is often tied to entry into CTE fields - oftentimes these are established by licensing or credentialing authorities," Lynch says. "The average cost, including tuition and fees, for in-state public two-year institutions is $3,435, but there are many different kinds of postsecondary CTE, including short-term job training programs, that provide alternative paths."