May is graduation month for most colleges, and for all you successful scholars and your happy parents, congratulations.
But trouble lies ahead. The Economic Policy Institute has released a report that details the exceptionally difficult time graduates face in the weak American job market.
According to the study, “young college graduates face an unemployment rate of 8.5%, compared with 5.5% in 2007, and an underemployment rate of 16.8%, compared with 9.6% in 2007.” As bad as those statistics are, the actual situation is far worse. They don’t include a shocking number of our youth who are “missing” from the job market altogether, young people who have simply given up looking for work. If these folks were included, the unemployment rate of would-be workers under 25 would reveal the devastating rate of 18.1%.
Many of those grads who are working are in positions that don’t require the expensive degrees they attained, and may not pay anywhere near enough to repay educational loans. The study notes that “The cost of higher education has grown far more rapidly than median family income, leaving students with little choice but to take out loans which, upon graduating into a labor market with limited job opportunities, they may not find the funds to repay.”
The figures in this report and others like it are symptomatic of a significant wrong turn in the American economy and the focus of the federal government. Particularly over the past five years, tax dollars have been used to increase programs such as food stamps, instead of creating conditions for business expansion and job growth. Key federal endeavors that could have created employment opportunities for both private sector jobs and government employment as well have been passed over in favor of spending on pure entitlement programs.
There are other factors at play in the rampant unemployment of our graduates, as well. Universities were designed to be centers for the exploration of knowledge and the preparation for a gainful career. Far too many, however, have concentrated on being political indoctrination centers rather than institutions designed to prepare youth for independent thinking and useful employment.
Another key factor has been the shift of resources from the private sector to the federal government.
According to a study by the Brookings Institute, the number of new business enterprises getting started has declined, and the number of businesses going out of existence has risen.
According to the vital but worrisome study, “declines in business dynamism in the U.S. overall are a pervasive force throughout the country geographically…” The Brookings study notes that this decline is seen “in all fifty states and in all but a handful of the more than three hundred and sixty U.S. metropolitan areas during the last three decades.
The Brookings study does not provide a specific reason for this unwanted trend, but the New York Analysis of Policy & Government believes that the growth of government has clearly absorbed funds and energy away from the private sector.
According to a study by usagovpending.com, “Government spending at the start of the 20th century was less than 7 percent of GDP… The 1950s began a steady spending increase to about 36 percent of GDP by 1982. In the 1990s and 2000s government spending stayed about constant at 33-35 percent of GDP, but in the aftermath of the Crash of 2008 spending has jogged up to 40 percent of GDP.”
Employment, and especially opportunities for the young, cannot exist without a vibrant economy. The combination of anti-capitalist ideology indoctrinated into our youth, and the diversion of resources from the private sector to Washington have produced a difficult hurdle for college graduates.
About the Author: Frank V. Vernuccio, Jr., J.D. is the editor-in-chief of the New York Analysis of Policy & Government and the co-host of the popular WVOX weekly radio show, “The Vernuccio/Allison Report.” He is a regular columnist and contributor for a number of newspapers and other news outlets, and previously was an editor of legislative affairs for a major publishing company. Before moving to writing and broadcasting full time, he served in both Democrat and Republican administrations within New York State.