The Economy is "Recovering" By Creating More Low-Wage Jobs... Increasingly Filled By Graduates

Last month, the Department of Labor released new job market numbers, which suggests that the economic recovery is perpetuating the trend of college graduates turning to minimum wage jobs. Though there has been significant employment gains, many recent college graduates have been forced to resort to low-wage, low-skilled jobs. There are now 13.4 million college graduates working for hourly pay, up 19 percent since the start of the recession.


According to the Department of Labor, there are about 284,000 graduates with at least a bachelor’s degree that were working minimum wage jobs in 2012.

In a recent study released by NELP, the National Employment Law Project, the low-wage occupational sector is the fastest growing sector in the economy, even though this sector only lost about one-fifth of its jobs. Meanwhile, the middle-wage job sector—which usually serves as the pathway into the workforce for many recent graduates—was hardest hit, and has been the slowest to recover.

According to the NELP study:

Lower-wage occupations were 21 percent of recession losses, but 58 percent of recovery growth.

Mid-wage occupations were 60 percent of recession losses, but only 22 percent of recovery growth.

The burden of student loan debt could be one of the driving forces behind this trend. College graduates are turning to low-wage jobs more than ever in order to pay of their high amounts of student loan debt. By working these low-wage jobs, it hinders their ability to overcome this financial burden and plan for the future. Young people are postponing home purchasing which overall delays economic recovery. Only 9 percent of 29-34 year-olds got a first-time mortgage, according to a recent Federal Reserve survey.

Since higher education is still the best way to ensure higher wages and job security, it is likely that this trend will persist as the recovery continues, which will then leave little room in the job market for low-skilled workers.

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