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News from EPI Class of 2018 high school graduates are entering a strong labor market, but inequities remain

In the Class of 2018: High school edition, EPI Senior Economist Elise Gould and Research Assistants Julia Wolfe and Zane Mokhiber provide in-depth analysis of the labor market for young high school graduates. The report focuses on high school graduates (ages 18–21), analyzing their demographics and whether they are employed, enrolled, both, or neither. The authors then look at unemployment rates and wage trends to paint a picture of the recent high school graduates’ economic prospects as they weigh their decision to enter the labor market or continue their education. New to this year’s research is wage data by race and ethnicity, which includes data on African American, Hispanic, and Asian American and Pacific Islander (AAPI) graduates.

“Young high school graduates face a difficult decision when deciding whether or not to go to college,” said Gould. “While college graduates generally fare better in the labor market than high school graduates, the prospect of staggering debt may prevent students from less wealthy families from enrolling in further education, or make it exceedingly difficult for them to complete their degree.”

Due to the steady progression of economic recovery since the Great Recession, the members of the high school class of 2018 who enter the labor market right after graduating have better job prospects than the classes of 2009–2017 did. However, compared with those who graduated in the full-employment labor market of 2000, the class of 2018 still faces real economic challenges. At the same time, because of stagnating family incomes and the rising cost of a college degree, many young high school graduates are only able to access the benefits of a college degree by taking on significant debt.

“While the recovery has shown overall positive trends, it hasn’t benefited everyone equally,” said Wolfe. “High levels of unemployment and underemployment persist for young African American workers, and young women still face a gender pay gap.”

Findings from the report include:

  • While 44.1 percent of all 18- to 21-year-olds have some college education, the vast majority (68.2 percent) of the overall working-age population (ages 18–64) do not have a four-year college degree.
  • 1-in-8 young high school graduates not enrolled in further schooling are unemployed, lower than before the start of the Great Recession, but higher than when the economy was at full employment in 2000. All racial and ethnic groups studied have higher rates of unemployment than in 2000, except for AAPI graduates. The black unemployment rate remains far higher than any other group and is about double the white unemployment rate.
  • The underemployment rate for young high school graduates is 25 percent, slightly above where it was in 2007. Black underemployment is 40.5 percent, much higher than its 2000 level.
  • Between 1990 and 2018, average wages for this group grew only 9.7 percent in total. AAPI graduates have the highest wages of any group at $12.53 an hour and while black graduates have the lowest hourly pay at only $10.46 an hour.
  • The gender wage gap for young high school graduates narrowed slightly over the past 18 years due to a slight increase in women’s wages and a decline in men’s wages. The current gap is $1.31 an hour, or $2,700 per year for a full-time worker.
  • Between 2000 and 2018, white high school graduates experienced a mild loss of 0.7 percent and black graduates experienced a large drop in pay of 4.4 percent, increasing the black-white pay gap to 11.4 percent.
  • Students at for-profit colleges generally take on more debt than students at nonprofit private and public schools do, but they are less likely to finish their degrees. Black students take on a disproportionate amount of debt, in part because their families generally accumulate less wealth than white families.

“Policymakers should work to make college more affordable for those who decide to continue their education,” said Mokhiber. “To improve job quality for all working people, policymakers should raise the minimum wage, protect workers from wage theft, provide undocumented workers with a path to citizenship, and end discriminatory practices that contribute to race and gender inequities.”