A new analysis from the Economic Policy Institute shows what a lot of younger Americans have probably noticed for themselves: even if you're lucky enough to have a job, it's still tough to get ahead. Over the last decade, wages for younger male college grads have plummeted by 11 percent, while women college grads saw their paychecks drop by 7.6 percent. Overall, wages overall rose 3 percent during the same period. That's not great, but at least it's not in negative territory.
European economies are infamous for sky high unemployment and low wages among younger workers, but problems have been brewing here too for quite a while. The TV show Friends may not be widely-recognized for its economic forecasting, but a 1995 episode called "The One with Five Steaks and an Eggplant" actually seems prescient in summing up the situation younger Americans face some 15 years later.
In case you haven't caught any of the seemingly endless reruns lately, three of the characters (Chandler, Ross and Monica) are reasonably well off. They're on the road to promising careers in fields that seem to offer a solid future, and they're generally financially comfortable. By contrast, Rachel, Joey, and Phoebe cycle through a series of bummer jobs, often struggling to make ends meet.
In the steak/eggplant episode, the six go out to dinner to celebrate Monica's recent promotion. At a posh restaurant, the more prosperous friends enjoy a good meal and generally make merry. Meanwhile, their economically-stretched pals nervously scan the menu for the cheapest selections, but even chicken is pricey. Outrageously pricey. At one point, Joey asks "What are these, like famous chickens?"
The uncomfortable dinner out is a reasonable analogy for what's happening to younger people in today's workplace: If you're well-educated and in the right field, you're probably on your way. If you're not, living the good life could be out of reach.
The amount of education you have is the starkest dividing line. Despite the generally bleak jobs picture in 2010, college graduates with doctoral degrees had an unemployment rate of less than 2 percent and typically earned more than $1,500 a week. If you had a B.A., the jobless rate was just over 5 percent, with pay averaging more than $1,000 weekly. For workers with just a high school diploma, unemployment topped 10 percent with weekly wages of $626. The Bureau of Labor Statistics lays out the gaps in a graph tellingly entitled "Education Pays."
But the kind of education you have matters too. As the New York Times recently reported, healthcare majors graduating in 2009-2010 had an unemployment rate of 5.4 percent, well below the overall national average. Graduates who majored in the humanities and the arts faced a tougher job market. The highest unemployment rates were for architecture grads -- a stunning 13.9 percent.
And the importance of picking the right field is likely to become even more crucial. In the past, technology and globalization mainly affected less-well-educated workers. Now, the potential job loss is creeping up the education ladder. A study by the National Academies reported that Australian radiologists already read MRIs of American patients, Costa Rican accountants help prepare the tax returns of U.S. businesses, and big companies like GE do much of their R&D overseas . In years to come, if a college-educated Brazilian or South Korean can sit down at a computer and do your job just as well as you can, then your economic future is at risk.
And in another cruel fact of economic life, younger Americans who got snared in the Great Recession may not be able to bounce back even though the U.S. economy seems to be recovering. Economic studies show that people who come into the workplace in a "bad" jobs market often have lower salaries over their entire career. When the job market is tight (and when you have college loans to pay) there's pressure to take a job quickly even if it doesn't use all your their skills and education. But according to Austan Goolsbee, former chair of the White House Council of Economic Advisers, younger employees tend to establish their base salary and accumulate much of their wage growth in their first decade on the job. When you spend years languishing in a job that don't pay much or offer much room for advancement, you may never be able to catch up.
In the Friends episode, there's a brief spat over the how to split the bill for dinner, but by the end of the program, the six friends are all friends again. It's that kind of show. Real life is another matter. There are a lot of angles to the jobs crisis, but this is one of the most important: if we don't start thinking seriously about to build an education system, a counseling system, and a job market that offers genuine opportunity for younger workers, both we -- and they -- will be paying the price for decades to come.
Follow Scott Bittle on Twitter: www.twitter.com/sbittle
Read it well, the major you choose and the school you choose will predict your income and employment opportunities, not some evil corporation.
If you are an engineer, accountant, or nurse you will have a job. If you want to be a Historian, Art Curator, or Social Worker you are likely going to be poor and unemployment.
But hey, go ahead and "do what you love", right? How about get a job.
If we lose them - our artists - what is left of our culture? The vultures of Wall Street?
Just a thought.
More importantly, when you "follow your dream" to be a mime, or whatever else you can think of, don't cry to me when you can't afford a house, food, healthcare and whatever else. Choices we make, right?
More to your point, not even everyone that excels in their studies to be a social worker or educator could have changed their mind and been an engineer or an accountant. I, for one, do not have the patience to be a social worker - but the need for both engineers and social workers exist.
In any group, there are going to be subsets of varying intellectual ability. It is not civlized to blame everyone that is in the bottom 50% for lacking the ability to succeed as well as the other 50%. That is what the dialogue in this country has been tending toward, though.
I'm not implying that paying 80 grand for a BA in History is a finacially wise decision by any means, but in a world where population is quickly outpacing paying job prospects, I don't think suggesting they all strive to be something they will be failures at is the right approach.
All I am saying is that these are the choices we make. If you choose to take a career path that will lead to difficult employment and even then poor wages, then that's fine and it is your choice. Just don't ask me for money when you realize how much it really sucks.
in order to qualify for food stamps you must: bring in less than 20k a year in income (if you were working min. wage at $7.85/h, 40 hours a week 52 weeks a year, you STILL couldn't make half of that). Along with an active checking account, you have to also prove permanent employment through a current pay stub and verification from your employer of your employment and pay. You also cannot buy: alcohol, tobacco, beauty products, toiletries, cleaning supplies or any type of over the counter medication.
food stamps are now administered through an electronic swipe card, it looks like a debit card (cuts down on public embarrassment) and you must present a valid government photo ID in order to use it. and with less than 0.001% of illicit drug users using heroin, your argument that somehow we're all paying for it. in fact most drug users are statistically white, suburban kids ages 15-25 that pay for it themselves. get. a. clue.
Of course, you can hire the really cheap programmers, but.....you'll be sorry!
In a world with an exponentially rising human population, and a finite amount of resources, what exactly is the economic future of people in general? It seems to me that young people today are finding out the answer to that question. The population continues its inexorable rise, and the biosphere continues its ongoing collapse. Meanwhile there is peak oil, peak fresh water, peak ore extraction and peak everything else coming to a head right now.
We cannot sustain 7 billion people on this planet and certainly not on the must-ever-expand-capitalism model, much less the "crony capitalism" into which the U.S. market has morphed. See Bill Moyers' latest Moyers and Company episode, all, for some fantastic, relevent reporting.
http://www.barackobama.com/jobsrecord?source=20120310_sc_jobs_ttmar10_a&utm_medium=email&utm_source=obama&utm_campaign=20120310_sc_ttmar10_a
Right now. First job out of college was temp, 2 1/2 months, making $480 a week.
Second job is starting up in a week. This time, $800 a week.
I'm making more or equal to anyone else I know who graduated at the same time as me. The advice I've gotten from my parents and their friends has made me wonder, frankly, what the hell is wrong with these people: Their advice is 20 years old and suited for the wrong job market.
Guess I'm not surprised, though. Nobody with power to make economic policy right now has had to go through a real job search as a graduate in these days. Hell, none of them even KNOW anyone who has. Or know how to read the statistic of those that do.
That can't happen under Citizens United, and even if that horrendous decision is repealed, either a successful third party would have to form, or there would have to be bipartisan cooperation in fixing things, or the Democrats would have to get the presidency, house, and a supermajority in the Senate, and keep them through a few election cycles, and make an effective push to reform the system. None of these scenarios seems likely.
Safety net programs are already inadequate to help the long-term unemployed, and I don't see that changing anytime soon either. The best bet for younger people, especially if they are well educated, is probably to move to a foreign country. I am personally considering this option, as even my graduate degree in Physics has gotten me nowhere.