More than half of all recent college grads are unemployed or underemployed, but economists with the Federal Reserve Bank of New York say that might not be a sign of the economic times. NY1's Money Matters reporter Tara Lynn Wagner filed the following report.
Unfortunately, getting a college degree does not guarantee that a student will graduate with a job. But if the immediate future doesn't look too bright, one should be patient. The wattage tends to increase with time, at least, that is according to economists with the Federal Reserve Bank of New York.
Looking at graduates in their first five post-college years, Richard Deitz, a senior economist for the Federal Reserve Bank of New York, says while 10 percent of 22-year-old graduates were unemployed in the last few years, "It declined to about 8 percent by the time people were 23 years old. And then by the time people were 27, unemployment rate declined to about 4 percent."
But interestingly enough, the same curve existed in 2000, at the peak of the tech boom, meaning the market is tougher on young graduates in both good economic times and bad.
"It's not unusual for people to face problems when they are first trying to find that first job. I know I did back when I got my degree. I think a lot of people do," says Deitz.
Then there are those who end up working in jobs that don't require a bachelors degree at all. They are referred to as "underemployed." While typically about a third of all college grads fall into this category, for recent grads that number is about 46 percent.
How can students better position themselves to start a post-college career in a job where they will actually use that college education? Turns out a major factor is one's major.
"Some of these more technologically oriented fields, like engineering and math and computers, do tend to have lower unemployment, tend to have lower underemployment, tend to have higher wages," Deitz says.
In fact, three out of four recent college graduates with engineering degrees found a job where a degree was required. Those in the health and education sectors also fared well, with 75 percent finding jobs with a degree requirement. Only 65 percent of graduates in the math and computers fields had such jobs, and only 40 percent of liberal arts graduates found such employment.
But with so many students taking on record amounts of debt to get degrees that they may not even use, is college still worth the cost? Economists say yes.
In general, they say people with degrees tend to have lower unemployment and higher wages than those without. Communities with large college-educated populations also have an economic leg up.
"They tend to be more innovative, they tend to have higher living standards and they tend to experience more rapid economic growth, so it's good for everybody," says William Dudley, the president of the Federal Reserve Bank of New York.