Sunday, May 29, 2005

Happy Graduation? Good Luck Getting a Job

It's graduation time -- jobhunting season. But the Economic Policy Institute says young college grads (under age 35!) "are facing a tough labor market this year." Real wages for college grads have fallen for three years in a row and continue to decline, as do benefits, including health insurance.

This isn't the first time college grads have faced periods of declining wages. The 1980-82 "double dip" recession kept grads below their 1979 wage peak until 1984. After a steady rise for four years, wages peaked in 1988. It took nearly a decade to get back up there. There was a sharp rise in the late 1990's, but wages have fallen steadily since 2000.

Unemployment rates for college grads have doubled since 2000 (increased 103%). But the numbers of foreign-born college grads has skyrocketed -- triple the rate of increase of US-born grads (24.6% vs. 8.2%). The number of unemployed foreign-born grads is 2-1/2 times greater than it was in 2000. [see Ed Rubenstein's data in his articles for VDare.]

Yet companies continue to import foreign-born labor on H-1b and L-1 visas and grouse loudly about last year's drop in the H-1b visa cap.

The key is demographics. Population bulges are hard to assimilate as they enter the workforce. The Boomers, entering the workforce en masse in the 1970's, glutted the market. Only after the "Baby Bust," born after 1965, began entering the workforce in far fewer numbers did real wages start to rise. But escalating immigration rates, especially from 1990 onward, pressured wages. Once Y2K passed and the Tech Bubble burst, wages and employment rates slid.

Now the Boomlets are coming onstream in full force. Immigration rates have barely hiccupped in a post-9/11 world. Even retiring people at 40 hasn't helped (but that's another story -- to come). The market is glutted with labor at every level from uneducated to Ph.D.

Interesting snippet: official government unemployment figures do not count new grads as "unemployed," or even as being in the labor market. Bureau of Labor Statistics does not count anyone until after they have started working! Take "official" employment/unemployment stats with several grains of salt.

So congratulations to our new graduates. And Good Luck!

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