College grads making $3,200 less than in 2000

Today's new graduates earn 8.5% less than they would have just over a decade ago, making it even harder to pay off their increasing debt loads.

By Aimee Picchi Apr 5, 2013 1:43PM

College graduates (copyright Ariel Skelley / Blend Images/Getty Images)Stories abound about the tough job market awaiting newly-minted college graduates. But even those degree holders lucky enough to find work are earning much less than they used to, a new study shows.


The average hourly wages for college graduates aged 21 to 24 have plunged by 8.5% since 2000, according to the Economic Policy Institute (EPI). In dollar terms, that means getting a degree today will net fresh graduates an annual income that's $3,200 less than what they would have made just over a decade ago, the study says. 


The big hit can be blamed on the two recessions that hindered the U.S. economy since 2000, with wages especially crimped during the Great Recession, according to EPI economist Heidi Shierholz. 


"The wage declines since 2000 stand in sharp contrast to the strong wage growth for these groups from 1995 to 2000," Shierholz noted. "During that period of low unemployment and overall strong wage growth, wages rose 19.1% for young college graduates."


At the same time, college tuition and fees have almost doubled since 2001, according to the Bureau of Labor Statistics. So, basically, if you graduated in the 21st century, tough luck: You likely paid more to earn less.


That's borne out by other recent studies of the challenges facing recent graduates. As my colleague Jason Notte wrote on Tuesday, the country employs 284,000 college grads in minimum wage jobs. That's 70% more than a decade ago. 


In 2012, young college grads earned an average hourly wage of $16.60 an hour, or about $34,500 a year. In 2000, however, the average wage topped $18 per hour, according to the EPI. 


Female college graduates are even in worse shape, with the average young woman with a college degree earning an hourly wage of just $15.64, the study found. Male grads earned an average hourly wage of $17.81. 


Regardless, the drop in pay for new college grads may make it even more challenging for them to establish themselves financially while paying off student loans. 


While recent grads are getting paid less, their debt loads continue to rise. The average U.S. student loan debt topped $27,000 last year, a jump of 58% in just seven years, according to Forbes


That's going to be tough to whittle down while flipping burgers at McDonald's (MCD) or brewing lattes at Starbucks (SBUX).


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162Comments
Apr 5, 2013 6:06PM
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It is as Suze Ormon said, It took a nation like ours to turn college into a bad investment. More and more, I see that coming true.
Or, as George Carlin said "...they call it the American Dream, because you have to be asleep to believe in it."

Apr 5, 2013 4:44PM
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Gee guys, guess what..........The best thing you can do now is go to a trade school. Learn carpentry, plumbing, auto repair........it will pay you a lot more than whatever your major was. College isn't necessary for everyone. Will your degree in Philosophy enable you to repair a kitchen sink?  How much will you pay the guy who knows how to do it?  Will your MBA tell you how to fix your air conditioning?  Take a trade and don't worry about 50,000 dollar student loans.
Apr 5, 2013 5:50PM
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What's relaly amazing is how many post-grad individuals are working for minimum wage.  At that rate they will be ready for Social Security before they pay their college loans off.
Apr 5, 2013 6:00PM
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right - so the obvious answer is raise taxes and spend more on education   hahaha  I have no idea how that logic works, but I'm sure that's the answer.  That's what I'm constantly being told.  It helps to understand one more piece of the puzzle about why the middle class is disappearing.  Middle class kids don't qualify for grants - even though with these doubling costs, their parents nor them can afford college.  So they get to take out loans and immediately upon graduation, presto - brand new poor people.  I never have understood the reasoning behind why poor people get free money to go to school while others have to take out loans.  How does poor mean you deserve an education more that someone else?  If the concept is that you go to college, get an education and then pay back the loan with the great money you make at your new job, then anyone would fit into that category.  Everyone can borrow money to go to college and pay it back with their awesome job.  So many things we could do differently - like make the loan pay back performance based - get out of college and can't find work - then the college doesn't get their money!    Or maybe someone could explain what in the world all the money is being spent on.  Donors routinely leave millions of dollars to colleges - students are paying in millions of dollars.  State universities get millions of tax dollars.  Where is it all going?  If education truly is the most important thing - then it should be free to all Americans.  If it's books and teachers and buildings that are the cost, then lets get all this on line.  Reduce costs DRASTICALLY.  Get people educated.   Or is it more the idea of keeping the big biz known as college going to keep the money flowing?  Why don't people lump colleges in the 'Greedy Corporations' category?   I have so many questions.... I should have went to college - I'm sure I would know all of this.

Meanwhile - the online world is rapidly making campuses obsolete.   They better invest all this money wisely because it's not long until that starts drying up.
Apr 5, 2013 5:56PM
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An engineer can start at $60,000 or higher right out of school - and we do NOT have enough graduating to fill demand. If you have kids, talk to them about being an engineer. Yes it is a tough degree - but a really rewarding career!
Apr 5, 2013 6:22PM
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Many will call this negative, I call it realistic.  It's the law of supply and demand in action.  When there are more and more of anything (like college grads) they will be worth less and less.  College is not for everyone.  Trade school, or job specific training, should be pursued by more young people.  Also if any group is seen as unable to repay particular loans, STOP LOANING TO THEM!  This goes for home loans, car loans and, yes, tuition loans.  It used to be, back in my (ancient) times that if you couldn't get a scholarship or otherwise afford to go to college, YOU DIDN'T GO,  you got yourself trained to perform some useful (and often more lucrative) occupation. 
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one more thing...I am a retired teacher..and sadly I do not think we are preparing well enough to compete globally in math and science.Not enough kids SMART ENOUGH TO GET THAT ENGINEERIN G DEGREE....THE EDUCATION IS WHERE WE NEED TO DRASTICALLY IMPROVE...have you noticed how few people even speak English correctly???We need to raise out standards much higher..from K-12 grade....no more sliding by...and get rid of the do nothing teachers who do not deserve to be there...I have seen plenty.
Apr 5, 2013 6:30PM
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A college grad used to be paid more.  What happened?

Could it be that employers no longer needed as many of them?

Or could it be that there are too many college grads than the job marketplace can absorb?

Perhaps employers realize they could get a college worker for cheap if there are enough of them fighting to get a job?

There is your answer.

 

 

Apr 5, 2013 6:58PM
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Eventually, the American people will realize the importance of uniting, and electing a functional government that will serve the people. As for now, we are still too unenlightened to realize the problem or our power. Our government is a reflection of the mentality of the people, and it is obviously dysfunctional. Be responsible, and take responsibility for your actions.
Apr 5, 2013 5:59PM
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There are also lots of great trade schools out there. Also lots of unfilled jobs!
Apr 5, 2013 5:50PM
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How's that Hope & Change working out for you now?

Apr 5, 2013 6:20PM
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Being a recent College Graduate. I got my degree in Environmental Science, and with a little determination and working hard to prove myself. I have moved into an Environmental Specialist role. I started at the bottom, but you have to walk before you run. My advise for this years upcoming grads is to pick a company with growth potential with entry level openings. Once you get in youcan move fast. Also be willing to relocate it increases your odds greatly.

 

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save your money...and think twice about college....
Apr 5, 2013 4:38PM
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well here we go the companies saying the ceo needs more money time to cut the pay of the worker

Apr 5, 2013 4:51PM
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well that evens with us that have been working for more than 10 years, and are making even less than the new graduates
Apr 5, 2013 6:44PM
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I took a group of MBA students from a local University to visit an automobile manufacturing facility  a while back and as you might expect, the main topic of conversation was who they were going to work for when they graduated. What you wouldn't expect was that 90% of the students on the bus were from China or India! Not one was planning on taking their American education back to their home country and using it there. And the sad part is that our government is allowing these foreign students to stay and take jobs from American students. We're not talking about a NY or California University, this was from St. Louis, Missouri. Sad state of affairs when a teacher with a Masters degree doesn't make as much as a Union laborer at an auto assembly plant or a checker in a Union grocery store.
Apr 5, 2013 6:09PM
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lets let some more illegal's in this country ,they are a big part of the problem with the cheap wages
Apr 5, 2013 7:56PM
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The simple answer is because there are a lot more college graduates per capita than there were in 2000, meaning more of the lower-paying positions that were filled by high school graduates in 2000 are now filled by college graduates, bringing down the average wage for that demographic.

It's not cause of Obama or the Republicans or the gays or whatever else people like to complain about these days, it's simply American culture shifting toward the idea that any college degree is mandatory and worthwhile for everyone, when that isn't the case. People need to research which degrees are marketable in the workforce, or which schools place graduates into good positions.
Apr 5, 2013 11:28PM
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Alright Sheeple.  I have a story that I would like to share.  I grew up in a farming community.  Any person could make a liveable wage if they were willing to go out and work in the fields either detasseling corn or cutting shattercane.  At the time minimum wage was under $4 per hour.  Doing a mindless, hard working job like this paid around $8, almost twice minimum wage.  This $8 could buy you a gallon of milk, 5 gallons of gasoline and still have enough money to get a big mac, fries and a coke.

Today, corporations pretty much own the farms around the town I lived in.  The price they are willing to pay for someone to toil in a field for an hour is less than minimum wage.  Of course if you ask anyone in the United States, hey will you come tend my field in mid summer for $7.25 per hour?  I would hope the answer is NO!  Well the answer was no.  So corporations can now petition the government to hire migrant workers to work in the fields and take jobs from U.S. citizens because the CEO needs to make 14 million a year while paying his workers minimum wage.

It was only a matter of time that corporate leaders who have no idea how to actually make something, would be taking our college educated Americans and find a way to pay them like field hands as well.  Now, the United States Government is allowing most of our good paying jobs, that we are supposed to giving to our educated people, be outsourced.    Then they tell us that it is our fault because we don't produce enough qualified students and we should spend more on education.

 

Our middle class, the union workers, teachers, police, firemen and the technically educated people are now in the poor house.  Our upper class, the doctors, the lawyers, the engineers, the professors are victims of corporate greed and barely make our middle class.  Our corporate leaders and politicians now have more money than they will ever need and the only thing they really know how to do, is make the sheep walk in a straight line.

Apr 5, 2013 9:30PM
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They aren't the only ones making less ....so is everyone else.
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