Chasing the American dream: Recent college graduates and the Great Recession
By Rozanne Larsen
As hundreds of thousands of newly minted college graduates pack away their cap and gowns each year, many have one common worry: “Will I be able to find a job?” Rising student loan debt has been the focus of public debate, but the Great Recession has made the overall situation for new graduates that much more difficult.
The John J. Heldrich Center for Workforce Development at Rutgers University investigated how the recession is affecting college graduates. Published in 2012, the report, “Chasing the American Dream: Recent College Graduates and the Great Recession,” is based on a nationally representative sample of nearly 450 college graduates who completed their degrees between 2006 and 2011. The sampling error is plus or minus 5 percentage points.
The report’s findings include:
- Only “one in two college graduates were employed full time at the time of the survey and another 26% were working part time”; in addition, “12% were either unemployed (6%) or underemployed (6%).”
- These overall patterns of work seemed to dampen expectations for this generation of graduates: “Only about half (48%) thought they will have more financial success than their parents.”
- Of all those with full-time employment, the median salary was $28,000; for men the figure was slightly higher, $30,000. However, 60% of graduates took a job paid by the hour. The median hourly wage was $10.23; it was $12 for women and $9 for men.
- The recession is affecting starting salaries: “Those who graduated during the recession-era labor market (2009 to 2011) earned $3,000 less on average in their first job than those who graduated before the recession began.”
- “Many graduates were disappointed with their starting salary; over half reported that it was less than they had expected it to be. About 40% said they expected to earn the starting salary they were offered and nearly 1 in 10 reported their salary was higher than they expected it to be.”
- Having practical experience helped graduates to have higher income; students who completed an internship while in college earned nearly 15% more on average — $30,000 versus $26,000 — than those who did not undertake an internship.”
- A combined 57% said that they wished they had been more careful about choosing a major or had taken more classes to prepare for a career. But only 3% said that, upon reflection, they would not have gone to college.
- Another key to higher salary was continuity between one’s education and line of work: Graduates who found a job related to their field of study earned approximately 15% more on average than those who did not.
- While approximately three-fourths of those surveyed believed they were accepting permanent positions, just 2 in 10 saw their first job as being on their career path.
- One-quarter of the graduates took their job because of its salary and benefits or because it provided an opportunity for professional development; 20% did so because they had no other offer or alternative.
“Although college graduates are fairly optimistic about their future,” the researchers conclude, “about 4 in 10 still believed that having a job where they earn enough to have a comfortable life is quite a ways off.”
Keywords: economy, higher education, financial crisis, student loans, youth
Last updated: June 7, 2012
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Citation: Stone, Charley; Van Horn, Carl; Zukin, Cliff. “Chasing the American Dream: Recent College Graduates and the Great Recession,” Rutgers University John J. Heldrich Center for Workforce Development, May 2012.