Reply #37: Educating College Graduates So They Can be Unemployed [View All]

[Demeter]

THIS PIECE JUST SEEMED TO LOGICALLY FOLLOW--SHOWING ONCE AGAIN THE FOOLISHNESS OF "PULL" FOR EMPLOYING PEOPLE, OVER INDEPENDENT "MERIT"

http://www.newdeal20.org/2011/03/22/educating-college-graduates-so-they-can-be-unemployed-39390/

A new Federal Reserve Bank of San Francisco paper, Recent College Graduates and the Labor Market by Bart Hobijn, Colin Gardiner, and Theodore Wiles, argues that unemployment is particularly bad for those just graduating from college. It explains how this puts pressure on structural or “recalculating” arguments of unemployment:

The current labor market outcomes of recent college graduates closely mirror those observed during the 2001 recession and the subsequent jobless recovery. This is important because recent college graduates are not subject to the kinds of structural factors that have been posited as the main sources of weakness in the overall labor market. Unemployment rates during the 2001 recession are widely recognized as cyclical in nature. Similarities in the experiences of recent college graduates in the labor market during the two recessions and recoveries are evidence that high unemployment rates in the current downturn and recovery are also mainly cyclical.

....I don’t shine the flashlight here to ignore the pain that those without college degrees experience in this economy. But if young people with college degrees can’t survive in the post-recession era, nobody can. And this explodes the idea that education alone, instead of monetary and fiscal policy, is the way out of our current high unemployment rate.

...Unfortunately, the recession’s effect is not limited just to the initial job search and wages. The negative impact persists far beyond that. Kahn found that the effect “falls in magnitude by approximately a quarter of a percentage point each year after college graduation. However, even 15 years after college graduation, the wage loss is 2.5% and is still statistically significant.”