The Job Market Is Looking Great– For Americans Who Don’t Have College Degrees

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Younger Americans without college degrees are experiencing one of their strongest job markets in decades, just as young college graduates are facing one of their weakest.

According to Theo Francis and Ray A. Smith at The Wall Street Journal,

• An analysis from the Burning Glass Institute found that unemployment among 22- to 34-year-olds without college degrees has rarely been lower over the past two decades. And yet college graduates in that age group have only experienced worse unemployment during the pandemic and the aftermath of the 2007-09 recession.
• Supply and demand may explain the divide. Skilled trades are short of workers as older generations retire and immigration declines. Meanwhile, more Americans have college degrees than ever, even as AI increasingly takes on entry-level work. Interestingly, the more physical and in-person the work is, the lower unemployment tends to be compared with historical levels.
• That doesn’t mean college graduates are more likely to be unemployed overall. Among workers aged 25 to 54, degree holders still have a lower unemployment rate (2.7%) than those with some college education (3.6%) or a high-school diploma (4.7%). The job market for college graduates is simply unusually weak compared with historic trends.

Our take? A college degree still carries significant advantages. But it’s increasingly smart to consider the ROI. Compare, for example, two hypothetical high school seniors, Bryan and Debra.

Bryan opts for college. He graduates four years later with $250,000 of student debt.

Debra chooses to become an electrician. By the time Bryan graduates, Debra has saved $200,000.

That’s a $450,000 delta. How much more does Bryan need to earn than Debra, and for how long, to catch up to Debra financially?

If money is not an object, or the point, this economic analysis is misplaced. But if college is pursued primarily as a means to achieving a level of wealth, then high school guidance counselors should be talking with students about concepts like ROI. For more on this, read Are College Degrees Still Worth the Investment?