College Graduates: Are Obama's Policies Helping?
May 30, 2013
The Obama administration has been promising increased economic growth and jobs for college graduates, but is it delivering on that promise? The statistics would say no, says Diana Furchtgott-Roth, a senior fellow with the Manhattan Institute.
In a commencement address at Morehouse College recently, President Obama told graduates, "Your generation is uniquely poised for success." Although President Obama's message is heart-warming, it is the opposite of true.
- Young adults have hardly benefited from declines in the unemployment rate. Between April 2012 and April 2013 the overall unemployment rate has declined from 8.1 percent to 7.5 percent. But over that time period the young adult unemployment rate barely edged down, from 13.2 percent to 13.1 percent.
- The unemployment rate in 2012 for newly graduated men and women with bachelor's degrees was 8 percent, far higher than the 5 percent rate such young adults experienced in 2006.
- Since 2000, the labor force participation rates of workers age 65 and over have been rising steadily, along with rates for those ages 55 and over. In contrast, the labor force participation rates of workers ages 16 to 54 have been declining. The biggest decline in labor force participation rates can be observed for workers ages 16 to 24.
- In 2012, the fraction of young people employed or looking for work was the lowest since 1972. In contrast, Americans age 55 and older had the highest labor force participation rate since 1961.
Young Americans who campaigned for Obama, voted for Obama, and turned out their friends for Obama are graduating from college with substantial debt, few job prospects, and the requirement to buy expensive health insurance. They might be poised for success, but most have not yet seen it.
Exacerbating their employment problems, younger people are graduating with more student loan debt. Student loan debt is the only debt that continued to rise during the recession. At the end of 2012, almost 40 million borrowers owed about $1 trillion, according to the Federal Reserve Bank of New York.
It's a lose-lose situation. Students are told that 21st century jobs require a college education. So if they do not attend college, they will not be employable. To get to college they need loans -- loans that they can only pay off if they have jobs. But the job market continues to be poor, at least for them.
Source: Diana Furchtgott-Roth, "The Real Washington 'Scandal'? The War on Youth," Real Clear Markets, May 22, 2013.
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