Former Secretary of Labor Robert Reich: If These Trends Continue We’re All Screwed

Former secretary of labor and current professor, Robert Reich wrote a blog for the San Francisco Chronicle entitled “College Grads Face Gloomy Prospects“. Not exactly high on optimism Mr. Reich tells like it is:

Fewer than half of the graduates from last year’s class have as yet found full-time jobs. Most are still looking.

That’s been the pattern over the last three graduating classes: It’s been taking graduates more than a year to land the first job. And those who still haven’t found a job will be competing with you, making your job search even harder.

Contrast this with the class of 2008, whose members were lucky enough to get out of here and into the job market before the Great Recession really hit. Almost three-quarters of them found jobs within the year.

A little sliver of hope?

Overall, the unemployment rate among young people (21 to 24 years old) with four-year college degrees is now 6.4 percent. With just a high school diploma, the rate is double that.

Not so Fast:

Even when you get a job, it’s likely to pay peanuts. Last year’s young college graduates lucky enough to land jobs had an average hourly wage of only $16.81, according to a new study by the Economic Policy Institute. That’s about $35,000 a year – lower than the yearly earnings of young college graduates in 2007, before the Great Recession. The typical wage of young college graduates dropped 4.6 percent between 2007 and 2011, adjusted for inflation.

Presumably, this means that when we come out of the gravitational pull of the recession, your wages will improve. But there’s a longer-term trend that should concern you. The decline in the earnings of college grads really began more than a decade ago. Young college grads with jobs are earning 5.4 percent less than they did in 2000, adjusted for inflation.

The bottom line?

If unemployment stays high for many years, if the wages of young college grads continue to fall, if the costs of college continue to rise and state and local spending per college student continues to drop, and if the college-debt burden therefore continues to explode – well, you do the math.

At some point in the not-too-distant future, these lines cross. College is no longer a good investment.

That’s a problem for you and for those who will follow you into these hallowed halls, but it’s also a problem for America as a whole.

You see, a college education isn’t just a private investment. It’s also a public good. This nation can’t be competitive globally, nor can we have a vibrant and responsible democracy, without a large number of well-educated people.

So it’s not just you who are burdened by these trends. If they continue, we’re all screwed.

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