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News from EPI The labor market for young graduates is improving but still weak: Unemployment rate for young black high school graduates is 28.4 percent

A new EPI analysis finds that while the labor market for recent high school and college graduates has improved, young people still face elevated unemployment and weak wage growth. Moreover, the overall improvement in the labor market for young graduates belies significant challenges faced by many young people, especially people of color.

In The Class of 2016, EPI senior economist Elise Gould and research assistants Teresa Kroeger and Tanyell Cooke find the unemployment rate is 5.6 percent for young college graduates, while the unemployment rate for young black college graduates is 9.4 percent—higher than the unemployment rate for young white college graduates was at the peak of the recession (9.0 percent). The unemployment rate is 17.9 percent for young high school graduates—still higher than it was before the recession.  The unemployment rate for young black high school graduates, meanwhile, is 28.4 percent—nearly double the unemployment rate for young white high school graduates (14.6 percent).

“The job market is improving but many young graduates are still suffering,” said Gould. “What’s more, it’s important to realize that most young workers do not have a college degree. We have to do more to improve the availability—and the quality—of jobs for young high school graduates.”

Over the last year, real wages picked up for both young high school and college graduates, who saw wage growth of 3.3 percent and 3.1 percent, respectively. However, this recent wage growth is largely driven by a decline in inflation, which is unlikely to lead to durable wage growth in the future. Moreover, even with last year’s increase, wages for young high school and college graduates are still about the same or lower than they were in 2000.

“The labor market has clearly improved for the class of 2016,” said Kroeger, “but when you look under the hood, there’s continued weakness for women, people of color, and workers without a college degree.”

The report shows that, despite similar experience, young female high school and college graduates still face gender wage gaps. The gender wage gap for college graduates increased in 2016, as wages for young male college graduates increased while wages for young female college graduates were stagnant.

“Even right out of school, women are paid less than men,” said Cooke. “By definition, they have the same experience, and yet young women are paid less. This wage gap persists and results in lower earnings throughout a woman’s career.”

The gender wage gap actually narrowed slightly for high school graduates, as young female high school graduates experienced notably higher wage growth than their male counterparts. This difference may be due to state minimum-wage increases over this period, which had a larger effect on women’s wages due to the disproportionately high composition of women in low-paying jobs.