Mostly Good News for the Class of 2016

Mostly Good News for the Class of 2016

CareerBuilder says this year’s batch of college graduates is looking at the best entry-level job market in a decade:

According to a new survey from CareerBuilder, 67 percent of employers say they plan to hire recent college graduates this year, up from 65 percent last year and the highest outlook since 2007. More than a third (37 percent) plan to offer recent college graduates higher pay than last year, and 27 percent of employers hiring recent college graduates this year will pay a starting salary of $50,000 or more. …

While prospects appear better, some employers are concerned that new college grads may not be ready for the real world. Twenty-four percent do not feel academic institutions are adequately preparing students for roles needed within their organizations, an increase from 21 percent last year.

For all that the hiring outlook has improved for newcomers to the workforce, the job market for young workers is still very different than it was before the Great Recession. Aimee Picchi at CBS Moneywatch points to a new study from the Economic Policy Institute that paints a much less rosy picture for the class of 2016:

Young college grads, for instance, are suffering from an underemployment rate of 12.6 percent, compared with 9.6 percent in 2007, before the recession started. It’s even worse for recent high-school graduates, with about one-third currently underemployed, compared with roughly 27 percent in 2007, the study found. Underemployment means people who want a full-time job but are working in a part-time role, or who are working in a job that requires fewer skills than they have. …

As if that’s not bad enough, wages are also suffering, they found. Young high school graduates are earning average wages of $10.66 an hour, or 2.5 percent below what the group earned in 2000. Young college grads are earning $18.53 an hour, or about the same as in 2000. Meanwhile, costs for everything from rent to food have continued to rise.

What’s good for the graduates might not be good for other segments. For example, some large financial firms are pursuing “juniorization,” meaning that they are pushing work to more junior parts of the organization in order to save costs. In that case, more college hires are likely to come with stealth cuts at higher levels of the pyramid.

But juniorization should result in a bull market for post-graduate hiring that sets that generation up well not just now, but for the future. The recession-era graduates of 2008 and 2009 are still suffering from lost early career opportunities and remain behind previous generations in terms of career advancement and development. This new group is likely to have a brighter future—even if it’s not quite as bright as before the recession—as better jobs and responsibilities set them up for success.