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News from EPI The class of 2017 is graduating into an improved labor market, but more work needs to be done: High school graduates are still paid less on average than they were before recession

In The Class of 2017, EPI senior economist Elise Gould and research assistant Teresa Kroeger provide in-depth analysis of the labor market for young high school and college graduates. The report, which focuses on recent high school graduates (age 17–20) and college graduates (age 21–24) who are not enrolled in further schooling, dives into employment, enrollment, and wage trends to paint a picture of the class of 2017’s economic prospects as they start their careers.

After years of elevated unemployment and depressed wages, young graduates’ economic prospects are beginning to improve. Unemployment rates for many young high school and young college graduates have returned to within one percentage point of their pre-recession levels, and wages are continuing to slowly recover. In fact, wages for young college graduates have surpassed their pre-recession levels.

“While by many measures the labor market for young graduates is now almost or fully back to where it was before the recession, the economy of 2007 is a low bar,” said Gould. “A better comparison is the full employment economy of the late 1990s and 2000, in which the strong economy translated into better opportunities for workers across the labor market. And by that measure, we have a long way to go.”

While the labor market is improving, that progress has been uneven, and many young workers are still being left behind. High school graduates are still paid less on average than they were ten years ago. Unemployment rates for young black and Hispanic graduates entering the workforce are still substantially higher than that of their white peers. And young female graduates are paid less than their male peers directly out of school with the same amount of education.

“It’s important to remember that only about a third of people in their prime working years have a bachelor’s degree or higher,” said Kroeger. “We need an economy that works for everyone, not just for those with the highest credentials. Everyone should be able to find a good job, no matter what degree they have.”

Key findings of the paper include:

  • The unemployment rate for young high school graduates is 16.9 percent (compared with 15.9 percent in 2007 and 12.1 percent in 2000), while the unemployment rate for young college graduates is currently 5.6 percent (compared with 5.5 percent in 2007 and 4.3 percent in 2000).
  • 15.1 percent of young high school graduates are neither enrolled in further school nor employed (compared with 13.7 percent in 2007 and 12.1 percent in 2000), while 9.9 percent of young college graduates are neither enrolled nor employed (compared with 8.4 percent in 2007 and 8.6 percent in 2000).
  • The unemployment rates of young black and Hispanic graduates are substantially higher than the unemployment rates of white non-Hispanics, for both young high school graduates and young college graduates.
  • The wage gap between male and female young high school graduates has narrowed since 2000, while the wage gap between male and female young college graduates has widened. Stark wage disparities between men and women occur even at this early part of their careers, when they have a fairly comparable labor market experience.