Monday, May 14, 2012

Job Market Improves for the College Class of 2012



"The class of 2012 is leaving college with something that many graduates since the start of the Great Recession have lacked: jobs. To the relief of graduating seniors — and their anxious parents — the outlook is brighter than it has been in four years. Campus job fairs were packed this spring and more companies are hiring. Students aren't just finding good opportunities, some are weighing multiple offers."

2. Job news is good for many 2012 college grads: Campus recruiting is up, and more new college graduates will leave with diploma and job offer in hand.

3. National Association of Colleges and Employers: More Jobs, More Offers for Class of 2012.

4. Job prospects improve for college graduates: More positions posted, hired, say schools' career counselors.

5. Job market offers hope for college graduates.

6. Graduates have reason for hope in job market

7. Job prospects for college grads are improving

MP: Note that the unemployment rate for college graduates fell below 4% in April for the first time since 2008.  At 3.7%, the jobless rate for college grads is at a 40-month low. 

32 Comments:

At 5/14/2012 10:36 AM, Blogger morganovich said...

i'm going to be very interested to see what this does to unemployment rates:

http://thehill.com/blogs/on-the-money/economy/227075-report-says-230000-unemployed-will-lose-benefits-over-weekend

i doubt it is a coincidence that this recessions record levels of long term unemployment coincide with the record availability of long term unemployment payments.

after all, if you subsidize something, you get more of it, right?

the interesting question will be how much long term damage this has done. being out of work for 99 weeks as opposed to, say, 26, puts you much further out of the workforce, behind the curve in terms of market and technical knowledge, and makes you look like damaged goods.

this is going to be a lot to overcome. like many programs intended to "help" this one may have would up doing some real lasting damage.

not sure how to predict it will unwind, but will be watching with great interest.

 
At 5/14/2012 10:48 AM, Blogger Jet Beagle said...

I just skimmed the articles, and I notied that prospects were good for graduates with accounting, engineering, computer science, and health care majors. But I didn't notice anything about increased opportunities for social justice majors. Imagine that?

 
At 5/14/2012 10:51 AM, Blogger morganovich said...

jet-

alas, i fear the opportunities for the social justice crowd are alive and well:

http://www.nbcwashington.com/the-scene/events/DC-Average-Salary.html

these guys thrive in big government like mushrooms thrive in crap.

 
At 5/14/2012 11:33 AM, Blogger AIG said...

But I didn't notice anything about increased opportunities for social justice majors. Imagine that?
Public schools are always hiring.

 
At 5/14/2012 11:50 AM, Blogger Buddy R Pacifico said...

This comment has been removed by the author.

 
At 5/14/2012 1:39 PM, Blogger Jon said...

Mark, the unemployment rate for college grads may be 3.7%, but the rate for young college grads is an astonishing 9.4%.  And the working are often working part time.  The underemployment rate is 19.1%.  Sources here.

 
At 5/14/2012 1:52 PM, Blogger Jon Murphy said...

You make some good points, Jon. However, with the exception of the "underemployed rate", most have made giant strides from where they once were.

On a somewhat related topic, remember our conversation last week on student loans and I had mentioned a forgiveness after 10 years? You asked me for the website, and I had forgot until now. Sorry about that.

Anyway, I was half-right: your loans will be forgiven after 10 years, but only if you work in certain public service roles. Here is the info.

 
At 5/14/2012 2:17 PM, Blogger morganovich said...

jon m-

well, there may be more to come on forgiveness.

obama mooted a plan to cap payments at at 10% of income and 20 years.

thus, if you average $50k, you pay $5k a year for 20 years and hit $100k, less than half the cost of many 4 year educations now.

precisely how they plan to write off such shortfalls was conspicuously absent from the plan.

i fear it also creates a terrible set of incentives in terms of educational pricing and consumption.

suddenly, getting a $250k degree to become a "community organizer" is just fine. roic becomes irrelevant. hell, you don;t care if it costs $2.5 million. you know you are never going to pay it.

seems like a recipe for disaster to me and a big source of future write downs. a 40-50% hit on $1 trillion in student loans is a rough scenario.

 
At 5/14/2012 2:24 PM, Blogger Jon Murphy said...

I agree with you 100%, Morganovich.

As long as this keeps happening, we'll keep seeing the college education bubble get bigger and bigger, we'll be flooded with "do-nothing" degrees, and when this bubble bursts, we'll gave a Great Recession Part II: This Time, It's Educational!

 
At 5/14/2012 2:29 PM, Blogger Jon Murphy said...

By the way, that last little bit was supposed to be a joke. If someone could give me a pity laugh, I'd appreciate it.

 
At 5/14/2012 2:35 PM, Blogger Jet Beagle said...

The very government which now proposes to "help" graduates is exactly the party which put them into the excessive loan situation they now find themselves.

Absent government guarantees, private lenders would certainly not have showered a young student with a hundred thousand dollars in loans. That is, unless the lender was reasonably certain to get the loans repaid.

Absent government guarantees, a prospective student applying at a bank would have faced the same hurdles as a business applying for credit. The student would be required to show a realistic "business plan" for his or her career. It is unlikely lenders would provide funds for a liberal arts or fine arts degree plan. Prospective students would have received a clear indication of the value of the education they planned to pursue. Those students would not have wasted four or more years of their lives.

Government guarantees are the whole problem. That liberals would now solve that problem by transferring the harm to taxpayers is not surprising.

 
At 5/14/2012 2:39 PM, Blogger AIG said...

By the way, that last little bit was supposed to be a joke. If someone could give me a pity laugh, I'd appreciate it.
Boooo!!

thus, if you average $50k, you pay $5k a year for 20 years and hit $100k, less than half the cost of many 4 year educations now.
Yeah but if you start out at 50k, in 20 years, you'll be making considerably more. You didn't take into account salary growth.

Either way, you're absolutely right on the impacts it will have, because what this is aimed at is not the people making 50k starting salary, but the one's making 15k starting salaries and very little growth potential (which if you graduate with a degree in finger painting, is probably what you're looking at).

Just about the worst kind of incentive, but a clever one aimed at specifically the type of "young people" that would vote for Obama and the Dems.

 
At 5/14/2012 2:41 PM, Blogger morganovich said...

jon m-

recession is always educational. just look at all the useful things homeowners have learned about excessive leverage in the last few years.

that kind of lesson lasts a lifetime.

 
At 5/14/2012 3:03 PM, Blogger Jon said...

JM,

Giant strides? Take a look at Figure 1 at the link I provided. Unemployment has fallen back from a peak of 10% for young college grads to 9.4%. Same story for undermployment.

Consider that this is happening as student loan amounts are at all time highs. These are very grim conditions for recent college grads.

What's interesting is to go through the archives at this blog and look just prior to 2008 as I did here. All of Mark's rosy claims were flowing then just as they are now. Contrast with someone from the (so called) left, like Paul Krugman.

That's a tough set of conditions to meet for the student loan forgiveness. If your loans are large you probably can't get into public service because you can't afford to.

 
At 5/14/2012 3:13 PM, Blogger Jet Beagle said...

jon: "That's a tough set of conditions to meet for the student loan forgiveness. If your loans are large you probably can't get into public service because you can't afford to."

Not tough enough for me.

As I see it, there should be no situations where former college students are "forgiven" their obligations. If they can't meet their debt payments, they should file for bankruptcy. That's what happens to persons who did not waste four years in college.

Why should a former college student be treated any differently than a blue-collar worker who amassed too much credit card debt or mortgage debt?

 
At 5/14/2012 3:16 PM, Blogger AIG said...

If your loans are large you probably can't get into public service because you can't afford to.
Let's be honest here, because there seems to bee too much disinformation from both sides.

Most people don't graduate with $100k in student loans. Most people who get liberal art degrees etc, get them from state schools where they pay, relatively, miniscule amounts of money.

Lots of them do end up working for the government at various levels. I know plenty that go join some program like teach for America or AmeriCorps, if they can't get a full-time government gig. Point is, government usually provides an escape rout for these people.

----------
But most important things to consider here; in 2010 the average debt of graduates was ~$25k, not exactly crushing by anyone's standards. Even if they got a job with a starting salary of $25k (which would be significantly under-performing the average), it only translates to 1 year's worth of wages.

And keep in mind that a good chunk of that debt was accrued not on educational expenses, but on living expenses (since for some strange reason, student loans can be used to live off)

So again I'm going to reiterate my point; education is priced too cheaply. What Obama is doing here, is lowering that cost even more for specifically the type of degrees that should not be lowered, but significantly raised.

 
At 5/14/2012 3:26 PM, Blogger Jon said...

JB, for the most part student loans are not dischargeable even in bankruptcy. These are the stickiest loans that exist. You can't get rid of them except via permanent disability or death generally speaking.

 
At 5/14/2012 3:29 PM, Blogger Jon Murphy said...

But most important things to consider here; in 2010 the average debt of graduates was ~$25k, not exactly crushing by anyone's standards.

Right. I have about $22,000 in loans, which translates into monthly payments of about $350, give or take. Not enough to change my lifestyle, but enough to make me whine.

Interestingly enough, I spend more on food per month then I do on student loans (I have very expensive tastes).

But none of that is relevant.

The point I was going for was this:

AIG, I think you are absolutely spot on when you talking about the majority of loans are from living expenses. Even if you assume you have the perfect student who never throws parties with his loan check, the cost of living on campus is pretty damn high. At my Alma mater, costs for commuter students was about $6-7 grand a year. If you lived on campus, it was about $15k. I lived on campus. If I had opted to commute, I would have no debt (I also would have had to go to a different school as it was 70 miles from home).

 
At 5/14/2012 3:30 PM, Blogger Jon Murphy said...

JB, for the most part student loans are not dischargeable even in bankruptcy. These are the stickiest loans that exist. You can't get rid of them except via permanent disability or death generally speaking.

That's correct. They are extremely hard to get rid of.

You could always do what my older brother did: move to Korea and let the loans default.

 
At 5/14/2012 3:58 PM, Blogger AIG said...

AIG, I think you are absolutely spot on when you talking about the majority of loans are from living expenses.

Right. I have a proposition; how about we say that student loans are to be used only on paying for classes, and cannot be used for any other expense. That would force a good chunk of kids who go to college as a means of just partying for 4 more years, to be priced out, or at the very least bear the cost themselves.

When you hear how people use their student loans, it makes the hair on your head stand up.

 
At 5/14/2012 3:59 PM, Blogger AIG said...

...although, with $3,000 per month costs for birth control, who can blame them!

 
At 5/14/2012 4:17 PM, Blogger Jon Murphy said...

I have a proposition; how about we say that student loans are to be used only on paying for classes, and cannot be used for any other expense.

I'm all for that.

I must admit, I may have misused my student loans/grants for things that were not entirely academic in nature. And I am paying for it now.

 
At 5/14/2012 5:04 PM, Blogger Jet Beagle said...

AIG: " I have a proposition; how about we say that student loans are to be used only on paying for classes, and cannot be used for any other expense."

That sounds beter than what we have now. But the real solution to any student loan "problem" is to take the government out of it.

In a free market, lenders would be free to decide what purpose the loans can be used for, how such use would be monitored, what the penalties for misuse would be, etc. And those lenders would set the interest rates high enough to cover defaults.

 
At 5/14/2012 5:15 PM, Blogger Jet Beagle said...

Jon: "JB, for the most part student loans are not dischargeable even in bankruptcy."

That's due to their special nature: they're guaranteed by the government. Which is exactly what I'm proposing we end.

If the government (the taxpayers) were not the guarantor, I'm pretty sure that any loans for education would be subject to the same bankruptcy laws as any other personal loans.

It is amendments to the Higher Education Act of 1965 which made the special nature education loans non-dischargeable by bankruptcy.

 
At 5/14/2012 5:37 PM, Blogger AIG said...

But the real solution to any student loan "problem" is to take the government out of it.
Sure, but that's not going to happen in the near future.

 
At 5/14/2012 6:24 PM, Blogger Jet Beagle said...

AIG: "Sure, but that's not going to happen in the near future."

I'm sure some people argued that about the Civil Aeronautics Board in the early 1970s.

What needs to happen is for this discussion to take place. Potential students and their parents and taxpayers need to understand what is really going on. They need to realize that government interference is why young people are saddled with these huge loans yet have no marketable skills.

Loan forgiveness - bailouts by taxpayers - will just kick the problem down the road and solve nothing.

 
At 5/14/2012 8:05 PM, Blogger juandos said...

"You didn't take into account salary growth"...

Hmmm, aig why would you automatically assume salary growth?

 
At 5/14/2012 8:09 PM, Blogger juandos said...

"As I see it, there should be no situations where former college students are "forgiven" their obligations. If they can't meet their debt payments, they should file for bankruptcy"...

Well you know jet b now this could be the time to consider a free and open market in 'human organ sales'...:-)

 
At 5/14/2012 8:26 PM, Blogger Henry H said...

Mark, the unemployment rate for college grads may be 3.7%, but the rate for young college grads is an astonishing 9.4%. And the working are often working part time. The underemployment rate is 19.1%. Sources here.

The data set for last year's class and previous graduates. It has no data on the 2012 class.

 
At 5/14/2012 8:32 PM, Blogger Henry H said...

Morganovich, the 230k losing benefits may not be a big motivator for the 99ers. I came across.

I came across this great story on Bloomberg. It seems to indicate a huge rise in disability rolls that correlates very well with the expiration of unemployment benefits of the 99ers.

There may be a decrease in the unemployment rate. However, it's not related to workers settling for any job. The unemployment rate drop would be related to a smaller population of people that want a job.

http://www.bloomberg.com/news/2012-05-03/disabled-americans-shrink-size-of-u-s-labor-force.html

 
At 5/15/2012 11:08 PM, Blogger VangelV said...

MP: Note that the unemployment rate for college graduates fell below 4% in April for the first time since 2008. At 3.7%, the jobless rate for college grads is at a 40-month low.

Where would we be without Starbucks to offer jobs to graduates?

 
At 5/15/2012 11:09 PM, Blogger VangelV said...

i'm going to be very interested to see what this does to unemployment rates:

http://thehill.com/blogs/on-the-money/economy/227075-report-says-230000-unemployed-will-lose-benefits-over-weekend


Under normal conditions those people will 'settle' for jobs that they would not otherwise take. But we are not operating under normal conditions.

 

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