Further evidence that it’s not just about wage stickiness

Employment rates for new college graduates have fallen sharply in the last two years, as have starting salaries for those who can find work. What’s more, only half of the jobs landed by these new graduates even require a college degree, reviving debates about whether higher education is “worth it” after all.

That is from Catherine Rampell.  As I like to say, wage stickiness is for the workers you’ve already hired, not for the new ones.  And yet employment for the new workers is not running smoothly, so how can it all be about wage stickiness?  That said, this is also circumstantial evidence that low employment rates are in part about wage stickiness.  If wages are falling for new hires, it is probably the case that for many currently employed workers real wages need to fall as well, and that often happens only with some resistance.

What else is driving lower employment for recent college graduates?  Some of them are quite willing to simply not work for a while.  Others fear that low-track jobs will hurt their future careers and so they wait rather than starting as a garbageman.  What else?


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