As families get ready to spend thousands of dollars for the upcoming college academic year, some wondering if they’re making a worthwhile investment, consider this: New college grads consistently earn between 50% and 70% more than young workers without a college degree, according to data from the Federal Reserve Bank of New York.
Moreover, the unemployment rate of new college grads, defined as those aged 22 to 27 with a bachelor’s degree, is consistently about half the jobless rate for young workers who don’t have a degree. Even during recessions, new college grads fare much better than their non-college counterparts.
In the most recent data published by the New York Fed — for March 2019 — the unemployment rate for new college graduates was 3.7% versus 6.8% for young workers. The jobless rate for all workers was 3.7% and for college graduates 2.2%.
The median income for new college graduates in 2018 was $44,000, almost 60% more than the $28,000 median income for high school graduates. Both are figures are reported in 2018 dollars.
Recent college graduates also had lower rates of underemployment compared with previous years. The underemployment rate refers to having jobs that don’t require a college degree.
In March, 12.2% of college graduates were working in low-wage jobs, the lowest rate since February 2009, and 34.9% were working in good-paying jobs that didn’t require a college degree. The New York Fed defines low-wage jobs as those that tend to pay around $25,000 a year or less and good-paying non-college jobs as those that pay roughly $45,000 or more each year.
The latest New York Fed report, like previous ones, also shows that engineering jobs, including chemical, electrical, aeronautics and civil engineering jobs, are the highest paying jobs for college graduates in their early and mid-careers, with wages starting near $60,000 early and growing to $90,000 to over $100,000 later on. Performing arts, liberal arts and early childhood education were among the lowest paying jobs.
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