They probably won’t believe you.
We know from a lot of different stories and reports that college graduates are hurting, with unprecedented numbers moving back to live with their parents. Now the San Francisco Federal Reserve has released an “Economic Letter” reporting that wage growth for recent college graduates is especially slow. According to the Wall Street Journal, the “median weekly earnings” of college graduates with fulltime jobs rose 5.9 percent from 2007 to 2014, while the same earnings rose fifteen percent for all fulltime workers. These numbers don’t even take inflation into account, so that, as far as we know, actual buying power might not have risen even that much.
“With few exceptions, wage growth has been limited in all occupational groups for recent graduates,” the economists wrote, presenting “a clear pattern of low earnings growth for most categories.” The wage gap has been larger and more persistent than in past recessions, which they attributed to underlying weakness in the economy.
So, if by some chance you are one of the college graduates who manages to get a job, even then you are still hurting.
The WSJ writer seems to want to explain the problem as the residual effect of the recession which “ended in June 2009.” It isn’t uncommon for those who graduate during a recession to feel the effects for many years in their income. But the quotation above shows that even the San Francisco Federal Reserve believes more is going on. Maybe the recession ended according to the official definition, but this hardly feels like a recovery. Our college graduates are experiencing “a larger and more persistent wage gap.”
All of this raises the question, Was going to college worth the money and the lost time?
We know that many people argue strongly that college is well worth the cost, even if it means a debt load. But I am skeptical. Typically I hear arguments based on comparing college graduates to all people who didn’t graduate from college. That’s not a relevant comparison. We need to see arguments that carefully compare college graduates to people who could have graduated from college but chose a different path.
In the mean time, lower wages and lowered expectations of future wages will have consequences for birth rates. People will put off childbearing and reduce the number of children because money is tight.
This will mean that there will be negative economic consequences felt far into the future.
So what has Barack Obama’s administration done to improve the economy? Nothing! I keep waiting for another laughable spate of stories about how the Administration is “now” going to make jobs a “number one priority. But the White House seems to have decided to not even bother pretending.
Obama didn’t make the economy in 2008, but it is his responsibility that he has left it as bad or worse in 2014.