Why today’s graduates are screwed
Pity the ambitious youngster. For decades the path to a nice life was clear: Go to university, find a graduate job, then watch the money come in. Today’s hard-working youth, however, seem to have fewer options than before.
Go into tech? The big firms are cutting jobs. How about the public sector? That is less prestigious than it used to be. Become an engineer? Lots of innovation, from electric vehicles to renewable energy, now happens in China. A lawyer? Artificial intelligence will soon take your job. Don’t even think about becoming a journalist.
Across the West, young graduates are losing their privileged position; in some cases, they have already lost it. Jobs data hints at the change. Mr Matthew Martin of Oxford Economics, a consultancy, has looked at Americans aged 22 to 27 with a bachelor’s degree or higher. For the first time in history, their unemployment rate is now consistently higher than the national average. Recent graduates’ rising unemployment is driven by those who are looking for work for the first time.
The social and political consequences will be profound. And the trend is not just in America. Across the European Union, the unemployment rate of young folk with tertiary education is approaching the overall rate for that age group. Britain, Canada, Japan – all appear to be on a similar path. Even elite youngsters, such as MBA graduates, are suffering. In 2024, 80 per cent of Stanford’s business school graduates had a job three months after leaving, down from 91 per cent in 2021. At first glance, the Stanford students eating al fresco at the school’s cafeteria look happy. Look again, and you can see the fear in their eyes.
Until recently the “university wage premium”, where graduates earn more than others, was growing. More recently, though, it has shrunk, including in the US, Britain and Canada. Using data on young Americans from the New York branch of the US Federal Reserve, we estimate that in 2015 the median college graduate earned 69 per cent more than the median high school graduate. By 2024, the premium shrank to 50 per cent.
Jobs are also less fulfilling. A large survey suggests America’s “graduate satisfaction gap” – how much more likely graduates are to say they are “very satisfied” with their job than non-graduates – is now around 3 percentage points, down from a long-run advantage of 7 percentage points.
https://www.straitstimes.com/opinion/why-todays-graduates-are-screwed
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