Despite labor shortage, NC college graduates face employment headwinds
The North Carolina Department of Commerce released a report this month on the labor market challenges faced by recent college graduates, suggesting, despite a widespread labor shortage, many young workers are having trouble finding appropriate work.
“While college remains a worthwhile investment for most students, recent college graduates are confronting a more difficult labor market than in previous years as they navigate technological change and the ups-and-downs of the post-COVID economy,” the reports said.
Although both North Carolina’s and the nation’s unemployment rates have been below 5% for the past three years (generally meaning full employment), and the Federal Reserve has identified present labor market conditions as “solid,” recent college graduates are faced with more difficult labor market conditions than in years past.
The department’s economists have found that companies are just as reluctant to let go of their current employees as they are to take on new workers. Hiring rates in North Carolina have reached their lowest levels in 10 years as a result.
Data collected from NC TOWER (North Carolina’s Tool for Online Workforce and Education Reporting) indicate that the weakening labor market has been especially unfavorable to recent bachelor’s degree recipients from the University of North Carolina System. Graduates across majors as diverse as business, engineering, and the social sciences have seen wage cuts. Post-graduation earnings for computer and information science majors dipped the most, by 22%, while the average decrease among all subject areas was 4%. Conversely, earnings for health-related majors increased by 2%, which the department attributes to the growing demand for health care due to the aging population.
While the NC Department of Commerce has emphasized that the data does not refute the value of college as an investment for most students, it has expressed worry that such labor market challenges might be “permanent in nature,” as the college wage premium has continued to level off.
The department’s economists admit the source of these labor demand and wage declines is debated and may be attributed to one or a combination of the following factors:
- Periodic downturns that are part of the economy’s cycle of expansion and recession
- AI and other labor-saving technologies reducing the amount of labor needed for business operations
- Changes in employer perception of a college degree’s value
Economists are also unsure whether these changes represent a temporary setback or a permanent feature of an evolved job market.
“Despite labor shortage, NC college graduates face employment headwinds” was originally published on www.carolinajournal.com.
