Fresh College Graduates Unemployment Rate And Its Effect On The Economy

Fresh College Graduates Unemployment Rate And Its Effect On The Economy

With larger economic problems plaguing both the United States and Europe, a growing problem that has gone unnoticed is the difficulties that college graduates are having finding jobs. Many different factors are contributing to their difficulty such as baby boomers not being able to retire, the automation of entry level job task, and just a sluggish economy in general. The youth unemployment rate now sits at 18.1 percent and the future economic outlook doesn’t look very good at all. If this trend continues it could have a serious negative consequence on the economy.

The Long Term Consequences Of A High Youth Unemployment Rate

At first glance this issue looks small compared to all the other economic problems that the economy is trying to fix, but it is a problem that will need to be resolved sooner then later. Many new college graduates are becoming frustrated with the lack of employment opportunities and are foregoing the job hunt to settle in low skill and low wage jobs. This is a problem as most of them have thousands of dollars of student loans that need to be paid back. Having low paying jobs will not allow them to pay them back and will put the students in financial difficulty. Many students that cannot find a job look to continuing education as a way to defer that problem.  Many are spending money on tests like the Charted Market Technician and CFA, then later dropping out of the course. They will take out even more student loans in hopes that getting a law degree or business degree will raise their probability of obtaining a job.

The Effect On The Economy and The Equities Market

As baby boomers begin to retire the effects will begin to be felt throughout the economy. New hires will not be skilled enough or prepared enough to handle the tasks that are thrown at them. Jobs that require college graduates having 5-10 years of experience will now be filled by college graduates who are fresh out of college. While previous generation of college graduates are still working low wage jobs the consumer spending will decrease and it will create a downward pressure on the economy. The investment and equities markets will then take a hit as baby boomers liquidate their positions but due to the low income of the past generation of college grads they will not be able to replenish at the levels that are needed.

Ways To Fix The Youth Unemployment Rate

While there are many short term fixes this problem, such as stimulus packages and incentives for new companies to  higher younger workers.  This doesn’t really fix the long term problem of decreasing the unemployment rate.  Once the economy begins to start moving again look for more companies to once again start higher youth workers.  There have been many different pieces of legislation that will reward companies to hire in the United States and stay away from outsourcing.  This should allow for more the younger generation to begin working in the corporate world even if the salary is less then  they hoped.