Starting pay dips lower for college grads
The labor market, particularly in terms of starting pay offers, appears weaker for college graduates now than for those who entered the workforce in 2001, which was the beginning of the previous economic slump.
That's the analysis from the Economic Policy Institute, which says inflation-adjusted average hourly wages in 2007 were 60 cents lower for young, female college grads and $1.60 lower for young, male college grads than they were six years ago.
As if stagnant or lower base pay weren't enough, EPI said that a college degree also "has become less of a guarantee of receiving health and retirement benefits on the job."
The research organization, which advocates for better wages for workers, noted: "The incidence of health insurance coverage is over 5 percentage points lower than in 2001, and less than half of young college grads now receive any form of pension coverage on the job."
Employers are moving away from defined benefit pensions in favor of defined contribution plans, such as 401(k) retirement plans in which the employer generally provides a percentage of employees' contributions.
And, while some smaller employers are discontinuing subsidized health insurance plans because of the expense, most large employers are maintaining health insurance plans but requiring employees to shoulder a larger share of the costs.
EPI economists Lawrence Mishel and Elise Gould call these troubling signs for college grads, given that the nation needs workers with higher education and skills.
But, with the stratospheric costs of a four-year college degree -- and post-graduate school -- the cost/benefit analysis (to decide if it's worth it to pursue advanced education) may deter many young people from attending college.
What a shame.


