Earlier this week, a new report sent a chill down the backs of this year's college seniors and their parents: According to an analysis from the Associated Press, the members of the class of 2012 face a 50-50 chance of joblessness or underemployment. Those with bachelor degrees will be lucky to land barista or retail clerk jobs, the article suggests, which will make it virtually impossible for them to pay off their hefty student loans.
There's just one problem with the report. It's not based on the outlook for the class of 2012. It's based on numbers that will be at least a year out of date before this year's grads enter the market, and there's newer data that suggests a more optimistic outlook.
The AP report based its numbers largely on data from the 2011 Current Population Survey--numbers that were collected last year. But much has changed since then, and the economy looks poised to continue its uptick through the coming months, as this year's seniors start their first jobs.
More recent numbers, based on a survey of companies and collected by the National Association of Colleges and Employers, suggest that as compared to last year's grads, this year's entry-level workers can expect more: Companies say they will hire 10.2 percent more grads from this year's class of graduates compared to the previous year, and they'll also pay them more. The median starting salary for 2012 graduates will be $42,569, up 4.5 percent from 2011. Other more general economic data, from jobs reports to GDP growth, show similar signs of economic rebound.
Of course, the news isn't all good for new grads. Their slightly-older peers are still struggling, which can lead to a glut of potential workers and make it harder to land higher-paying jobs. The Pew Research Center reports that employment rates among young people between the ages of 18 and 24 are at an all-time low, at 54 percent, which matches up with the AP data, and those who are employed full-time have experienced a bigger drop in weekly earnings (6 percent) than any other age group.
But there's no reason to think this year's crop of students will suffer as much as those who graduated a few years ahead of them, into the heart of the recession. In fact, research suggests the opposite. Lisa Kahn at the Yale School of Management has found that students who graduate into a recession are likely to continue to face the negative effects from that recession, including higher unemployment rates and lower incomes, in some cases even 15 years after graduation.
"This [suggests] that workers who graduate in bad economies are unable to fully shift into better jobs after the economy picks up," writes Kahn in her paper. That's bad news for people in their twenties who are already in the job market, but good news for those graduating now, post-recession.
The problem with the AP's take on the story is that it suggests that the class of 2012 is in for as dismal as a ride as the classes of 2011, 2010, and 2009. Because the AP supplies articles to newspapers and other outlets throughout the country, dozens of negative headlines hit the presses this week: "1 in 2 new grads jobless or underemployed," proclaimed the Columbus Dispatch, which misleads the reader into thinking that is the expected rate for this year's crop of seniors, when in reality in refers to previous years' grads. Fortunately for this year's cohort, that dismal headline is outdated.
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