Just as thousands of college graduates are walking across the stage to receive their diplomas, the U.S. Department of Labor announced frail May jobs figures.
Unemployment ratcheted up a notch to 9.1 percent and the U.S. economy added just 54,000 jobs last month — barely one-third of the 150,000 needed each month to return our nation to prosperity.
Even more troubling, economists think the true national unemployment numbers may be much higher. That’s because the government doesn’t count the people who have given up searching for a job, those who are underemployed — working any job just to get a paycheck — or those who are retiring, returning to school or getting by on a disability check.
In fact, according to an Associated Press poll of 42 economists, more than half a million people have given up looking for work since November, and the scary fact is there may not be jobs for them in the near future.
What is most upsetting is that America’s unemployment growth may not be cyclical, and because of the mismatch between the skills of the unemployed workers and the skills needed for the available jobs, our “structural joblessness” is rising as well. In other words, the number of people unemployed indefinitely is up irrespective of economic times unless they are retrained or receive additional targeted education.
The job outlook is even grimmer for college graduates.
The recession has obliterated job prospects as our country has fallen further and further behind when it comes to creating new jobs. While employment opportunities are improving, they are not improving fast enough.
The New York Times reports that just over 55 percent of the 2009 graduates younger than 25 are working in a field requiring a college degree while nearly a quarter of them are not working at all. Those with degrees in computer science and math fared a little better, with seven in 10 working in their fields, while more than half of the humanities majors are either unemployed or toil in a job where a college degree is not required.
Student debt soars
Not only are this spring’s college graduates confronting an anemic job market, their indebtedness continues to grow as well. Mark Kantrowitz of the National Center for Education Statistics reports that the debt for 2011 graduates averages $22,900.
According to The Wall Street Journal, the growth in student debt marks a shift toward a form of obligation that can be a lot more onerous than credit cards or home loans. Student debt can carry interest rates as high as those on subprime mortgages, and it’s much harder to shed in the event of trouble. There’s no house to give back to the bank, and even bankruptcy rarely offers relief.
As of December 2010, total student debt outstanding stood at $530 billion in the U.S., up 29 percent from December 2007, according to the Federal Reserve Bank of New York, while other types of household debt shrank 8 percent over the same period.
So what’s the answer? U.S. Chamber of Commerce’s chief economist Martin Regalia believes that government — at all levels — needs to unshackle the private sector by simply allowing entrepreneurs the ability to compete, create jobs, make new products and pay taxes.
“Here’s the problem,” says Regalia. “By failing to alleviate the uncertainty businesses are feeling, Washington continues to stifle hiring. It’s time to address the mountain of new regulations and mandates coming from this town and act on the pending trade agreements so we can turn this economic recovery into a jobs recovery.”
Regalia is correct. Unless America empowers the private sector to invest and create new products and jobs, our nation will continue to deal with an anemic job market. That’s not good for our college grads or anyone else in our nation.
Don Brunell is president of the Association of Washington Business, Washington state’s Chamber of Commerce. Visit http://www.awb.org.