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Unemployment highest among young workers

New labor market data analysis from the Federal Reserve Bank of New York shows that unemployment is highest (6.7%) among young workers – those between the ages of 22 and 27. Recent college graduates (December 2023). in the same age bracket fared slightly better, with an unemployment rate of 4.8%. Among all workers, unemployment was 3.5% and among all college graduates, unemployment was a slim 2.3%.

Although the employment picture for college graduates was better than the national average, the data was not all good news. Recent college graduates were underemployed at a rate of 40.3%. This compares to an underemployment rate of 32.4% for all college graduates.

The New York Fed defines underemployment as “the share of graduates working in jobs that typically do not require a college degree. A job is classified as a college job if 50 percent or more of the people working in that job indicate that at least a bachelor’s degree is necessary; otherwise, the job is classified as a non-college job. “ Underemployment among all college grads has remained relatively constant, hovering between 32% and 35% for the past three decades, including during periods of recession.

So, four out of ten recent college graduates are working in jobs unrelated to their college degrees. The New York Fed employment data also examined wages. The median income for a worker with a bachelor’s degree was $60,000. That compares with the median income of $36,000 for a person with only a high school diploma.

That last figure, the median income of a high school graduate, is important for two reasons. First, this summer, that figure becomes the benchmark for outcomes for students who have attended private, for-profit colleges and community college certificate programs. Second, it matches WCC’s most recently reported income for its graduates.

Unemployment may factor into federal financial aid eligibility

In other words, there is no daylight between the annual salaries for a high school diploma and a WCC credential. If that holds out, that’s going to be a major problem for WCC beginning in 2026. This summer, the US Department of Education will require schools to begin reporting “gainful employment” data for its graduates, and in 2026, the Department of Education will use that data to impose sanctions on schools that don’t perform.

Now, most of WCC’s students are already employed when they enroll in classes for the first time. Claiming that a WCC student is “employed” could be making a huge leap. WCC doesn’t say that its former attendees are employed in the area(s) in which they studied. They merely have the same employment status they had when they first enrolled at WCC.

However, the high school wage data show that for all their efforts, taking classes at WCC netted an average wage increase of nothing over that of the average high school graduate.

That’s a problem in its own right. It’s also a practical problem for WCC students and former students because the cost of living in Washtenaw County is 20% higher than the cost of living in the rest of the state. $36,000 (both the median income of a high school student and the median income of a WCC student) isn’t going to allow someone to live here.

On $36,000, a person could afford a monthly rent of no more than $900, which does not resemble the current rents in Washtenaw County. WCC has a graduation rate problem and a graduate earnings problem. If it doesn’t get these fixed very soon, it’s also going to have a federal student loan problem in 2026.

Photo Credit: Yasmeen , via Flickr