Amid the COVID-19 pandemic and the lockdown-induced recession, roughly 50% of college students who earned their degrees in 2020 failed to find a job within six months of graduation.
An analysis from the National Association of Colleges and Employers found that 2020 graduates had significantly lower job market success than their peers who matriculated in 2019.
CNBC summarized:
The National Association of Colleges and Employers (NACE) recently analyzed the outcomes for 563,000 bachelor’s graduates across 337 colleges and universities and found that only 50.2% of the class of 2020 had full-time jobs with a traditional employer (meaning they are not working as a freelancer or entrepreneur) within six months of graduation. In comparison, 55.3% of the class of 2019 graduates were employed within the same time frame.
Students who attended colleges with fewer than 2,000 students tended to do better after graduation. Closer to 62% of these students had full-time positions after six months.
As CNBC also noted, Bureau of Labor Statistics data from January 2020 to October 2020 reveal that graduates entering the job market during last year’s recession saw a bigger decline in labor force participation than those who graduated during the financial crisis.
The disappointing job market results occurred as college enrollment rates began to drop precipitously. According to the National Student Clearinghouse Research Center, 7.8% fewer students are now participating in undergraduate programs:
Roughly two months into the second fall semester of the pandemic, postsecondary enrollment is now running 2.6 percent below last year’s level, for a total 5.8 percent drop since 2019. Undergraduate enrollment declined 3.5 percent from last fall or 7.8 percent from fall 2019. Graduate enrollment grew 2.1 percent, maintaining the upward trend from last fall (+2.7%), for a total 4.9 percent growth since 2019.
Undergraduate enrollment continued to trend downward across all sectors, with the steepest drops in the private for-profit four-year and public two-year institutions. Undergraduate female students declined slightly more than males (-4.1% and -3.4%, respectively). Continued enrollment losses among traditional college-age students (18-24) remain concerning (-2.6% for 18-20 and -3.3% for 21-24).
Though labor market prospects for American workers have since improved, American employers are still struggling to fill positions. The Department of Labor’s most recent Job Openings and Labor Turnover Survey (JOLTS) shows that there are over 11 million job openings in the United States, a figure exceeding the number of people actively searching for work by 3.6 million.
As the American labor market continues to tighten, major restaurant chains now identify staffing challenges as a primary threat to their businesses. CNBC reported:
Restaurant executives have painted a bleak picture of staffing challenges to investors on their earnings calls in the last two weeks. CEOs like Domino’s Pizza’s Ritch Allison, Chipotle Mexican Grill’s Brian Niccol and McDonald’s Chris Kempczinski shared details on how eateries have shortened hours, restricted ordering methods and lost out on sales because they can’t find enough workers. Some chains have been hit harder by the labor crunch, like Restaurant Brands International’s Popeyes, which saw about 40% of its dining rooms closed due to understaffing…
Raising wages is one popular approach to staffing problems, although it isn’t a perfect solution. McDonald’s wages at its franchised restaurants have risen roughly 10% so far this year as part of an effort to attract workers. Higher labor costs have led to increased menu prices, which are up about 6% from a year ago, according to McDonald’s executives.
Roughly 39% of respondents in a recent Conference Board report affirmed that rising price levels are a motivating factor for their wage hikes. However, higher nominal pay does not necessarily correspond to higher living standards; since President Joe Biden took office, Americans’ inflation-adjusted wages have been on the decline.