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September 01, 2006
Another province heard from: Unemployment falls for the young and college grads
Since I've been hammering on bad news for the young and college grads, here is some good news from today's employment report.
The unemployment rate for college grads fell from 2.1% in July to 1.8% in August, lowest since early 2001.
And the unemployment rate for workers aged 25-34 fell from 4.8% in July to 4.4% in August, also the lowest since early 2001.
Is this a trend or a blip? Hard to say. I'll keep a watch. Early 2001 of course was the beginning of the last recession (no matter what Greg Mankiw says), so that what we are seeing is that the labor market for educated and young workers is finally recovering to pre-recession levels.
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The B.A. grad working at McDonald's technically counts as "employed". I wonder how many 16 year olds can't get after-school jobs anymore because all the positions are being held by college grads.
Posted by: Brandon W at September 1, 2006 03:24 PM
An unemployment rate of 1.8% for college grads hardly suggests that outsourcing is hollowing out the US economy. People who create that strawman are disingenuous.
All the low-handing fruits of outsourcing have been picked. In India's IT sector, wages are rising 14-18% a year due to saturation of the labor force. The number of people in India who can qualify for these jobs is not as large as people assume.
The worst is certainly behind the US.
Posted by: Kartik at September 1, 2006 03:25 PM
If graduates get a Macdonald's job that's ok for them, as they wiil know how hard earning a living (the true meaning of waht Economics is all about) and how running a sucessful outfit can both be. Of course they count as employed people, they are not hanging around or spending their time in much more dangerous (dope) or uninteresting activities (tv, game consoles, the stuff). And they are not stealing anyone.
What is the matter? is there a problem for young people to try harder to find their own jobs? In Europe we see the job market much more inflexible but the real problem is: there is a lot of work around to be done, help wanted just about everywhere, but is damn hard to find someone who wants to work hard, especially with the hands.
My gas station around the block is wanting help for 2 years and nobody applied. A plant grower offers accomodation (a nice country house with full amneties), plus a bonus for Satarday work, on top of the 14 months quite adequate salary, plus health benefits and gets no reply. For more than a year now.
What the heck is happening out there in America? The same or not really?
Does everyone want a BMW without the BMW work effort?
Posted by: Mrrm at September 2, 2006 06:25 AM
The problem with reporting single stats is that they allow pretty much anyone to make a highly refutable argument (whether it be outsourcing is over, or the Mcjob is taking over).
These comments are pointing to a need BW and you can address: painting a comprehensive picture of what does it mean financially to be in your 20s and 30s in the U.S. today. This isn't about the Mcjob or outsourcing - it's about the majority of college grads who are working at pretty much every profession out there. It's about student loans and other expenses associated with starting life (buying a first home, car, etc.).
The challenge BW should tackle is how do standards of living today compare to those 5 years ago, 10, 20, and 35 years ago (when the parents of today's college graduates hit the market). This can't be a "who has it harder" discussion (every generation will argue for the prize), but an attempt to really compare standards of living and financial burdens.
Posted by: Yariv at September 2, 2006 10:53 AM
I doubt if there are very many people with BA degrees working at McDonald's, but there are such people working at roughly equivalent jobs at Starbucks and Borders. I posit that these people, if they remain in these jobs for more than a gap-filler period, often have several characteristics, to wit: (a)they followed a course of study that didn't have any particular job relevance, and (b)they are unwilling to take any job that involves working with their hand, such as auto or aircraft mechanic, and (c)they are unwilling to take any job that violates their notions of class propriety, such as business-to-business sales rep, and (d)they lack the creativity to invent their own jobs.
I'm sure there are individual exceptions; there are also people who work in such jobs because their lives are focused on something other than career development (writing, travel) which is fine, but should not be considered a valid indictment of the social & economic system.
Posted by: david foster at September 2, 2006 11:50 AM
The news expected next week from Intel, that it will let go of 10%-20% of it work force may push that unemployment rate back to 4.8% for September. And with a related story in Business Week on LBO's in Silicon Valley in the tech companies, the restructuring after buyouts always impacts employment. Sorry to the Intel employees, some of the best and the brightest, only a heads up on the coming months.
Posted by: Mike Reardon at September 2, 2006 12:41 PM
Unemployment may be low, but that may not indicate a healthy job market. They may have dropped out or extended their education depending on their parents.
How many actual jobs have been created in this bracket since the recession? Falling incomes certainly don't spell a robust demand.
Posted by: Lord at September 2, 2006 04:19 PM
*** The news expected next week from Intel, that it will let go of 10%-20% of it work force may push that unemployment rate back to 4.8% for September. ***
Not likely, as 20% of Intel's workforce equals only 0.01% and of the total US workforce.
Perhaps unlike most of you, I actually have such bad habits as to eat at McDonald's from time to time -- in a huge-university town no less -- and no, I don't think it's too likely that there are a lot of college degrees back behind the counter. There are a lot of Mexicans there who I strongly suspect do not have college degrees, however.
I'd think that as an ever-inreasing ratio of the population gets college degrees -- and as the labor statistics count an ever growing number of very average people with unimpressive degrees in Psychology and Marketing (c'mon folks, we all know these people) -- a mere unexceptional BA or BS will have less and less relative value, as the labor market reorganizes to reward people who can signal some accomplishment beyond partying in the same town for four years.
Posted by: Kevin at September 4, 2006 05:22 PM
I guess Intel is more low lying fruit. Maybe in 20 years they might find another position. Then again, maybe they will find something more useful to do. Of course that will knock another $3B from tech spending. I wouldn't want to be buying yet.
Posted by: Lord at September 6, 2006 12:23 AM
I think that college has become what a high school degree used to do. The ecomonic worth of a college degree is equilievent to a high school degree. You used to be able to do things in high school, and now you can not do anything with it. So what if you spend extra time in grad school or proffessional school? What is the big deal you have the rest of your life to work.
Someday everybody will have a masters degree, and what people will need PHD's to get a job?
Posted by: Joshua Flapan at January 24, 2007 04:54 PM