College Grads Face Years of Lower Wages

Economists pile on the bad news for the struggling class of '09

By Rob Quinn,  Newser Staff

Posted May 9, 2009 9:46 AM CDT

(Newser) – The recession will mean paltry pay for the Class of '09 for many years to come, economists tell the Wall Street Journal. College grads are entering the toughest labor market in 25 years and competition is driving down starting wages for those lucky enough to land jobs, an effect research shows can linger for up to 15 years.

A survey of workers who graduated in the 1980 recession found that they earned 7% to 8% less in their first year at work than grads from better times and were still earning around 5% less 12 years later. Economists say the trend is largely due to recession grads having to accept lower-grade jobs than they would otherwise have done, meaning they take years longer to acquire saleable skills than those who finished college in boom times.

This year's college graduates will be entering the most competitive job market in a generation, which is forcing wages down significantly.
This year's college graduates will be entering the most competitive job market in a generation, which is forcing wages down significantly.   (AP Photo/Kiichiro Sato)
Economists say that the total hit on wages from graduating in a recession can total $100,000.
Economists say that the total hit on wages from graduating in a recession can total $100,000.   (Shutter Stock)
Economic research shows that the negative effects of graduation during a recession can last for many years.
Economic research shows that the negative effects of graduation during a recession can last for many years.   (AP Photo/Elise Amendola)
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