While I wasn't happy with how the New York Times business page covered the recent unemployment report (link), I was pleasantly surprised to see this editorial today titled "Making College Pay". Here are the key sentences:
The recent jobless rate for college graduates ages 25 and older was 3.2 percent, and their median pay at full-time, full-year jobs was $75,300 for men and $53,700 for women. That is a far lower rate of joblessness and a far higher pay level than for high school graduates and people without high school diplomas.
But that doesn’t mean that enough good jobs are, or will be, available for college graduates. Though joblessness for college graduates ages 25 and older looks tame, the jobless rate for those under 25 averaged 8.2 percent in 2013, compared with 8 percent in 2012 and 5.4 in 2007, before the Great Recession hit in full force.
That is one of the points I have been making the past few days. If you want to evaluate whether we should be making more college graduates, it is pointless to look at a metric that combines people who just graduated and people who have been working for forty years, and everyone in between. The only thing that really matters is whether people who are newly graduating are finding jobs. I imagine an economist would call this a "marginal" analysis.
And not just any job... are they finding permanent, full-time jobs that require college education? This is where even these editors went off rails. The U3 unemployment rate of 3.2 percent does not care if the jobs require a college degree; it also counts temp jobs and part-time jobs as employment. This means even the 8.2 percent rate for the under 25 age group may be misleading once we dig into the nature of the jobs being counted as jobs.
Actually, the editors kind of got this message too when later they pointed out research showing "the rise in underemployment for graduates ages 22 to 27 never fully retreated after the recessions of 2001 and 2007-9; in 2012, it was a dismal 44 percent." If they realized the official unemployment rate hides the problem of underemployment, they really should have used a different unemployment metric in the beginning. Other metrics are all reported by the Bureau of Labor Statistics.
Read that last paragraph again, and tell me why we should make more college graduates. And let's not forget that these graduates are saddled with unprecedented debt on graduation.
Here's another gem: "Pay, meanwhile, has stagnated for college-educated workers over the past 12 years."
I wrote previously about why the structural unemployment thesis is bankrupt (link).
All in all, a great NYT editorial that will hopefully change the policy debate for the better.