Most of this year’s annual graduation season surveys in the US have indicated that the class of 2018 will enjoy a bright start to their careers, with a tight labor market and lots of demand for college-educated talent enabling them to demand the highest starting salaries in years. A new analysis from Korn Ferry, using a large data set of 310,000 entry-level positions from nearly 1,000 organizations, finds that new entrants to the professional job market this year might not be making big gains after all, notwithstanding their excellent prospects for finding a job:
Based on the analysis, 2018 college grads in the United States will make on average $50,390 annually. That is 2.8 percent more than the 2017 average ($49,000). “With the 2018 U.S. inflation rate hovering just over 2 percent, real wages for this year’s grads are virtually flat,” said Korn Ferry Senior Client Partner Maryam Morse. “However, with competition for top graduate talent so fierce, it’s critical that companies pay competitively, create an engaging culture and provide clear paths for advancement.”
In other words, this analysis points to the fundamental quandary of the US labor market right now: employers have every reason to pay more for talent, but wages aren’t growing as quickly as the law of supply and demand should compel them to.
Korn Ferry’s analysis also highlights the variation in starting salaries among major US cities: A graduate looking for work in Atlanta can expect to earn an average of just under $50,000, compared to over $60,000 in New York and nearly $64,000 in San Francisco (not adjusted for cost of living). The study also calculated average entry-level pay in various professions: A new customer service representative earns on average $35,000, an accountant $48,000, a registered nurse just under $55,000, and a software developer $67,000.
Another new report, from the left-leaning Economic Policy Institute, considers this graduating class’s prospects by analyzing data on recent college graduates aged 21 to 24. While EPI does not dispute the strong labor market position of these graduates compared to recent years, it also argues that the class of 2018 can and should be doing better than the class of 2007: