For new graduates, the state of the labor market has notable career implications beyond getting a first job. People who graduate into a strong labor market will earn more throughout their careers than those who graduate during a recession. And when recession eventually does hit, people with college degrees are more protected; during economic downturns, people without a college degree are at greater risk of unemployment.
But the job market for recent graduates rarely looks like the job market at large. One reason: recent grads — 22-27-year-olds who have earned a bachelor’s degree and are no longer in school — tend to cluster in particular jobs and industries.
They are more than five times as likely to be advertising and promotions managers, actuaries, news reporters, and law clerks as are workers overall. They’re also disproportionately likely to be financial and credit analysts, as well as geological engineers and agricultural scientists. On the flip side, very few recent grads are bus drivers or housekeepers, or work in construction or manufacturing.
And yet, recent graduates are confident in today’s labor market — so confident, in fact, that they’re increasingly pursuing creative passions and social service work over higher-paying, possibly lower-risk jobs.
Their confidence isn’t entirely misplaced; the future of work should bode well for recent graduates. The latest government projections suggest that, over the next decade, jobs requiring a college or graduate degree will grow twice as fast as those requiring only a high school degree. Furthermore, if robots or algorithms end up eliminating jobs, college-educated workers would be less at risk. While 62% of people with only a high school degree work in “routine” occupations that are more susceptible to automation, only 28% of people with a bachelor’s degree and only 11% of people with a graduate degree do.
With all this in mind, today’s graduates can look forward to entering the job market. Although unemployment and underemployment for recent grads aren’t quite as low as in other recent booms, and although earnings have barely budged, the strong labor market should put them on a more solid path for employment and earnings than those who graduated earlier in this recovery. And their college degree should provide some protection both from the dips of the economic cycle and from the uncertain future of work.
—HBR