New College Grads Are Making Gains in Employment and Wages During Pandemic

(Bloomberg) -- Recent U.S. college graduates are doing a lot better in the labor market amid the Covid-19 pandemic than previously thought, underscoring the need for skilled work. 

The unemployment rate for recent college grads improved to 5.4% in September and the overall rate for those with a bachelor’s degree or higher fell to 2.9%, both the lowest since the eve of the pandemic, according to data from the Federal Reserve Bank of New York released Friday. The rates are well below the recent peaks in June 2020. 

Wages are also picking up. The top quarter of recent graduates with a bachelor’s degree now start work at a record $69,000, the New York Fed data show. Even wages for those in the lower grouping of earners are above the 30-year median.

It’s a decidedly brighter picture than earlier predicted as the Biden administration declared the pandemic a national emergency last year and employers rapidly rescinded job offers, leaving millions of young adults in a lurch. The Cares Act helped finances by postponing student-loan payments, but the economic uncertainty remained.

See More: The Youth Underemployment Rate Has Fallen 5 Percentage Points in a Year

Still, there’s room for improvement. About 41% of recent college graduates are considered underemployed, or working in jobs that typically do not require a college degree. About one in nine recent college graduates work in a low-wage job, those that tend to pay around $25,000 or less.

Meanwhile, wages for recent grads in the lowest-earning group are below levels seen 30 years ago and not much different than the median for those with a just a high-school diploma.

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