The 2016 job market is the best for college grads since the Great Recession. Job prospects are looking up. In addition to the improving economy, more baby-boomers are retiring which opens the way for mid-level advancement and entry-level candidates.
According to a recent survey of nearly 2,200 hiring and human resource managers conducted by CareerBuilder, sixty-seven percent said they plan to hire college grads this year, up from 65 percent last year. This is good news, especially for recently minted grads, but it doesn’t tell the whole story. In spite of increased hiring, there are more qualified applicants than high-paying quality jobs. Plenty of underemployed college grad baristas are still serving morning Jo. Add to this the skyrocketing student debt, and it’s not easy to make ends meet.
Even When Degrees Cost the Same, Some are Worth More
Between 1984 and 2015, the cost of a 4-year college degree at a public university has shot up 125%, while wages have remained stagnant for the past few decades (after adjusting for inflation). Although everyone is paying more for their degrees, some degrees are clearly more valuable than others.
Frederic Liegl and Sabine Williams both went to elite colleges. Liegl is studying economics at the University of Chicago, while Williams earned her bachelor’s degree from Brown University in ethnic studies. This summer, Liegl will start working in equity derivatives at a prominent New York bank. Though he declined to reveal his salary, his industry has a starting salary around $80,000 a year. Williams, who moved back to her parents’ home after graduating last December, is working at Starbucks and baby-sitting while hunting for a full-time job. Most of the positions she’s finding are in the $35,000-a-year range.
According to Rosemary Haefner, CareerBuilder’s chief human resources officer, more than half of newly hired graduates will make $40,000 or less. A lucky 27 percent will earn $50,000 or more. Top earners in the $80,000 range are likely to graduate with degrees in computer science, tech, engineering and math, or business.
Wage, Gender, and Race Gap
A recent report by the Economic Policy Institute (EPI) shows that significant gaps in employment and wages persist across race and gender lines for young college grads. Not coincidently, there are more men than women in high-paying fields, both at the university and professional level. These fields recruit aggressively on campuses making it easier for certain graduates to land jobs. Liegl’s employer recruited him on campus, while the career office at Williams’ University didn’t offer much help. “At my university, they gave no guidance for anyone that doesn’t want to go into finance, consulting, or STEM,” Williams said. “I’m more interested in nonprofit.”
While some of the wage gap between Liegel (men) and Williams (women) can be attributed to choice of major and occupation, men still our-earn women for a variety of reasons including discrimination. Young male college grads earn about $21 an hour while young female grads pull in only $16.58. According to EPI research, the gender gap has widened since 2012 and is widest for the highest paid workers. Race also continues to play a role. For black graduates the unemployment rate is 9.4% compared to 4.7%% for whites. While more black grads are finding jobs, their unemployment rate is still higher than the peak rate (9%) for white college grads during the recession.
Taylor Harris, a senior at Howard University in Washington D.C., is “a bit more confident” about her job prospects than seniors were last year. As an African-American student, she is facing the employment challenge head on. In addition to attending classes and managing the student newspaper, she has bolstered her resume by interning at the Dallas Morning News, The Washington Post, and the U.S. Army’s public affairs office. “Being a black job candidate, I think you have to work twice as hard sometimes just to get a job,” she told CNN Money on her way to take a final exam. “It’s not enough to just get a bachelor’s degree, you have to be active in college with internships, fellowships and jobs in order to compete.”
Employers Welcome Class 2016 Graduates with Open Arms
Although many inequities in the workplace persist, employers are eager to meet 2016 graduates. More than half of the employers surveyed by Career Builder (52 percent) plan to make offers to students before they graduate, and the majority (67 percent) says they are willing to negotiate salary when extending the offer. Another piece of good news for college grads is that most recruiting employers (63 percent) are focusing on developing the next generation of leaders rather than filling immediate operational requirements.
Steven Rothberg, president of College Recruiter, a job board used by college students and recent grads to find employment, explains that “it’s far cheaper to hire someone out of college and train them then to try to hire someone with a couple years’ experience and have them hit the ground running.” According to another survey conducted by executive search firm Korn Ferry, the majority of executives who responded (43 percent) said the top attribute they seek in college recruits is learning agility, defined as “the ability to learn from experiences and apply those learnings to new roles.” Next on the list is drive (27 percent) and cultural fit (17 percent).
So if you’re a motivated grad, the odds could be in your favor. Even if you didn’t major in business of STEM, there is an organization looking for an enthusiastic employee with the ability to keep up, change, and innovate in today’s global, ever-connected business environment.