The Myth of the Unemployed College Grad

By Kevin Carey and published by TheAtlantic.com

Perhaps no puzzle has consumed the American media more in the past few months than the chasm between official measures of the economy and how average people feel about it. Inflation is down, and wages are up—yet voters remain gloomy. Young people are, at least by some measures, the most pessimistic. They think the economy is bad and getting worse. Why? The answer has major implications, not least on the outcome of the next presidential election. You can’t blame the media for being so eager to figure it out. But pundits and reporters might want to look harder at their own penchant for writing stories that make the economy look worse for young people than it really is, including, above all, by incorrectly declaring that college diplomas aren’t what they used to be.

A recent Washington Post story, “New College Grads Are More Likely to Be Unemployed in Today’s Job Market,” typifies the trend. It begins with a recent graduate named Lucas Chung forlornly sitting in his childhood bedroom. He has moved back home, because he hasn’t yet found a good job. “I had high hopes but it’s not really working out for me,” Chung says. “I’m feeling a little desperate.” Chung is supposed to represent what the Post calls “a sharp reversal from long-held norms” in which college graduates get a boost in the job market. Historically, the unemployment rate for new college graduates has been lower than the overall average. But in recent months, it has been higher, according to an analysis of September data by the Federal Reserve Bank of New York. This, the Post story concludes, has created “another disruption for a generation of college graduates who have already had crucial years of schooling upended by the pandemic.”

That sounds bad, particularly given how much money students borrow for college. But a closer inspection of the numbers reveals that the so-called sharp reversal isn’t sharp, and is barely a reversal. The new-graduate and all-worker unemployment rates have been moving pretty much in lockstep, within a percentage point of each other, for the past 10 years. As of September, the unemployment rate for recent college graduates (defined as those aged 22 to 27) was 4.4 percent, compared with 5.6 percent in December 2013. That’s consistent with the long-term trend of a job market that has been improving for more than a decade and recovered quickly after the coronavirus pandemic. The all-worker rate was only 0.8 percentage points lower, at 3.6 percent.

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