Think Tanks: College graduates struggle in current economy

Diana Carew
October 6, 2014
The Washington Examiner

Diana Carew for the Progressive Policy Institute: Despite falling unemployment and a recovering labor market, young college graduates continue to struggle in today’s economy.

Analysis of new data reveals the real wages of young college graduates surprisingly fell in 2013, by 1.3 percent. The decline reverses a slight uptick in 2012, and continues along a 10-year trend in which real average earnings for young college graduates have fallen by a sizeable 12 percent since 2003.

This troubling trend presents significant political and economic challenges that policymakers can no longer afford to ignore. As consumers and taxpayers in their prime earning years, young college graduates represent one of the most important segments of the working population.

Economically, falling real wages for young college graduates is resulting from what I call the Great Squeeze. That is, more young college graduates are finding themselves underemployed – taking lower-skill jobs for less pay at the expense of their less educated peers. The continuation of this trend, five years after the Great Recession, suggests this problem is more than just temporary.

The Great Squeeze is rooted in demand-side and supply-side factors. On the demand side, the high underemployment plaguing young college graduates is connected back to the slow-growth economy. Our education, tax and regulatory policies have failed to adapt to the realities of a data-driven world, keeping investment and high-wage job creation on the sidelines. Here simply having a college degree is not enough to guarantee success. In fact, a recent study from the Federal Reserve found that one-quarter of college graduates earned the same amount as those with a high school diploma or GED.

And on the supply side, colleges are failing to adequately prepare college graduates for the high-skill, high-wage jobs that are being created in fields like data analytics and tech.

NYC REGS DRIVE B&BS UNDERGROUND

Matthew Feeney for Cato at Liberty: The campaign against Airbnb in New York City has claimed some surprising collateral damage – actual B&Bs. According to Mary White of BnB Finder, half of all the B&Bs in the city have closed down since legislation in 2011 aimed at limiting Airbnb abuses came into effect. The statewide law prohibits building owners from renting rooms in residential buildings and apartments for less than 30 days.

The law may have been aimed at preventing apartment buildings from being turned into illegal hotels, but it has resulted in fines being issued to B&B owners. The owner of one of New York City’s B&Bs launched an advocacy group in 2011 that lobbies for changes in legislation but does not list its members. Given the legislation affecting B&Bs it is understandable that B&B owners would be hesitant to increase their exposure. A Crain’s New York Business article on the decline of B&Bs in New York City quotes the owner of a Brooklyn inn, who limits the amount of attention her business receives online in order to avoid city investigators:

“Most people don’t even know B&Bs exist in the city. Now many innkeepers are keeping a lower profile, hoping not to attract the city’s attention.”

The owner of a European-style inn in Brooklyn, who did not want to be identified, said she limits her online exposure by not listing her property with travel sites like Expedia. The reason is twofold: She wants to speak personally with her guests before they arrive to ensure “that the people who stay with us won’t steal anything from us” and to keep out of the cross hairs of city investigators.

THE CAR STAYS IN THE GARAGE

Adie Tomer and Joseph Kane for the Brookings Institution: Driving to work has been a staple in the American commute for decades, but it appears the country’s love affair with cars is stalling in many places. After years of sustained growth, driving levels are flat-lining, while more young people are opting for alternative transportation modes.

Newly released Census data from the 2013 American Community Survey offers additional insight into the shifting nature of our daily commutes.

To be sure, the car is still king for the United States as a whole. Based on the new Census estimates, over 85 percent of all workers still get to their jobs by private automobile. That amounts to over 122 million commuters, the vast majority of whom travel alone rather than in a carpool. It’s also relatively consistent with our commuting patterns from 1980, when nearly the same percentage of workers commuted by car.

But those long-term trends mask real changes over the past few years. The share of national commuters traveling by private vehicle is edging down for the first time in decades — from 86.5 percent in 2007 to 85.8 percent in 2013. Meanwhile, other transportation modes have grown in relative importance. Public transportation, which just recorded the most passenger trips since 1956, saw its share jump to over 5 percent, reaching levels not seen since 1990. The share of those bicycling and walking to work also continued to rise, now representing nearly 4 percent of all commuters. The biggest gain, however, came from those workers who didn’t technically commute at all. With the help of burgeoning broadband coverage, nearly as many people now work from home as ride public transportation to their jobs.

Compiled by Joseph Lawler.