Here’s a spot of good news: Thanks to an improved national economy, high school students graduating this year and directly entering the workforce have brighter job prospects than students who graduated in the years immediately following the Great Recession.
“[L]ow-wage workers in general, of which high school graduates make up a disproportionate share, have been showing larger wage gains over the last five years thanks to an economy approaching full employment as well as a series of state-level minimum wage increases,” according to a study released Thursday by the Economic Policy Institute (EPI), a Washington, D.C.-based think tank.
“In today’s tightening labor market, we should expect to see continued and stronger wage growth, which should help make up for losses experienced by young high school graduates in the aftermath of the Great Recession.”
Members of the class of 2019 still face greater economic hardships than young people who bypassed college for the workplace in 2000, when the pre-recession labor market was humming along at full employment, the EPI said.
“Nearly one in five (19.1%) young high school graduates is underemployed, a slightly smaller share than in 2007 (20.1%) but a larger share in 2000 (16.5%),” the report stated. “This suggests that more young high school graduates are having difficulty finding full-time jobs or have been discouraged from searching, compared with young high school graduates in 2000.”
For black high school students who aren’t college bound, the picture is even more bleak: they face a stubborn wage gap and twice the rate of unemployment experienced by white and Asian American and Pacific Islander high school graduates.
“Young black graduates saw a dip in their unemployment rate, although it is still far higher than the rate for any other group and is about twice as high as the white unemployment rate (15.9% versus 8.2%),” the report stated, adding that white graduates were the only race/ethnicity group with an unemployment rate higher than it was in 2000.
Elise Gould, EPI senior economist and the report’s principle author, said the economic disparities between black and white high graduates is one of the most problematic aspects that she and her colleagues found in the study.
“It’s persistent and it’s getting worse,” Gould said of the racial disparities during an interview with ThinkProgress. “By all metrics, things are much worse for young black graduates [who aren’t going to college] than for young whites, as they are twice as likely to be unemployed, twice as likely to be underemployed.”
She said black young adults also earn less than their classmates. “There’s an 11% penalty in the wage gap between black and white young adults,” she said. “That penalty, which amounts to earning about $1.37 less per hour, is a large figure. They’re just starting out in the labor market and some won’t ever catch up.”
The study, an analysis of data culled from the Current Population Survey (CPS) basic monthly microdata and sample surveys of adults 18 to 21, suggested the racial/ethnic disparity may stem from racial bias or animus, not strictly economic factors.
“One would think there would be little disparity in the unemployment rates of young high school graduates, who have the same basic level of education and are in the same labor market position,” the report states. “This suggests other factors may be at play, such as discrimination or unequal access to informal networks that often lead to job opportunities.”
The EPI report bookends a previously released report by the same authors analyzing job prospects and the economy for young college graduates. In that study, Gould and research assistants Julia Wolfe and Zane Mokhiber found that the Great Recession “did a lot of damage to the employment prospects of young adults just entering the workforce after graduating from high school or college—and that damage persisted well into the recovery.”
Gould said EPI made a special effort to highlight the high school graduate findings because too little attention is given to non-college bound high school graduates, who make up the lion’s share of the nation’s labor force.
Specifically, as the EPI study notes, that while 45.7% of all 18- to 21-year-olds have some college education, nearly two out of three Americans over the age of 21 do not have a four-year college degree. One in five didn’t earn a high school diploma.
As with the college graduates, the EPI researchers noted that this year’s crop of high school graduates will benefit from sustained economic improvement over the past decade.
The report on high school graduates examined the labor market for this year’s graduates by demographic group and found:
- Nearly one in 10 young high school graduates not enrolled in college or other educational institutions after graduation is unemployed, a similar figure to 2000 when the economy was at full employment in 2000. Young black high school graduates are roughly twice as likely to be unemployed as their white and Asian American and Pacific Islander peers, just as it was in 2000.
- Between 1989 and 2019, average wages for non-college bound graduates grew only 11.2 percent in total. Young Hispanic high school graduates saw faster wage growth than their white, black, and AAPI peers between 2000 and 2019.
- The gender wage gap for young high school graduates narrowed slightly over the past 19 years due to a slight increase in women’s wages and a decline in men’s wages. The current gap is $1.29 an hour, or $2,680 per year for a full-time worker.
- Between 2000 and 2019, white high school graduates’ wages grew by less than a percent, while black graduates experienced a drop in pay of 2.7 percent, increasing the black-white pay gap to 11.1 percent. Black graduates have the lowest hourly pay at $10.92 per hour.
- Students at for-profit colleges generally take on more debt than those enrolled at nonprofit private and public schools, but they are less likely to finish their degrees. Black students take on a disproportionate amount of debt, in part because their families generally accumulate less wealth than white families.