Best job mar­ket in decades wel­comes new grad­u­ates

But chal­lenges — debt, em­ploy­ers look­ing for ex­pe­ri­ence — re­main

Houston Chronicle - - FRONT PAGE - By Erin Dou­glas STAFF WRITER

The col­lege class of 2019 is grad­u­at­ing into one of the best job mar­kets in decades as a soon-to-be record eco­nomic expansion low­ers un­em­ploy­ment, boosts wages and keeps em­ploy­ers hir­ing — if not com­pet­ing — for work­ers.

It’s a wel­come change for re­cent grad­u­ates, who have spent much of the decade since the last re­ces­sion strug­gling to break into a la­bor mar­ket with far more work­ers than jobs. Even grad­u­ates with so­cial sci­ences or hu­man­i­ties de­grees who are typ­i­cally left be­hind in the job mar­ket have much bet­ter odds of get­ting hired than three or four years ago be­cause the de­mand for la­bor is so great right now, said Paul Har­ring­ton, a pro­fes­sor who stud­ies la­bor mar­kets at Drexel Univer­sity in Philadel­phia.

“You have to go back to the 1990s or 2000s to find a la­bor mar­ket as strong for grad­u­ates,” Har­ring­ton said. “This will be the best year in a long time. There’s a lot of op­por­tu­nity for every ma­jor.”

The U.S. econ­omy has cre­ated jobs from 102 con­sec­u­tive months, in­clud­ing more than 260,000 in April, and un­em­ploy­ment na­tion­ally, 3.6 per­cent, is the low­est in a

half-cen­tury. The Texas and Houston economies are hum­ming, too, with their job­less rates fall­ing to record lows in April, 3.7 and 3.2 per­cent re­spec­tively.

Among re­cent grad­u­ates, the un­em­ploy­ment rate na­tion­ally has slipped to 3.7 per­cent from 7.1 per­cent in 2011, ac­cord­ing to the Fed­eral Re­serve Bank of New York. Grad­u­ates with de­grees in en­gi­neer­ing, specif­i­cally min­ing and chem­i­cal, as well as com­puter sci­ence and fi­nance are par­tic­u­larly well-suited to find high pay­ing jobs this year, said Har­ring­ton.

“There’s wide­spread de­mand,” Har­ring­ton said. “I’m very bullish. This is a great year.”

Oil and gas re­cov­ery

In Houston, grad­u­ates in re­cent years also had to con­tend with a bru­tal oil bust — the worst in a gen­er­a­tion — that threw tens of thou­sands of en­ergy in­dus­try em­ploy­ees out of work and weighed down the re­gion’s econ­omy. With the oil and gas sec­tor re­cov­er­ing and crude prices now just be­low $60 a bar­rel, economists say the lo­cal econ­omy is poised to en­ter a pe­riod of sus­tained, yet mod­er­ate growth.

John Le, a me­chan­i­cal en­gi­neer­ing grad­u­ate from the Univer­sity of Houston, found the lo­cal job mar­ket ro­bust. He had re­ceived three job of­fers upon grad­u­a­tion, in­clud­ing two in Houston. He ul­ti­mately ac­cepted an of­fer with Baker Hughes, an oil­field ser­vices com­pany.

But still, the oil and gas in­dus­try hasn’t made a full re­cov­ery, even as jobs in ex­trac­tion creep back each month. Houston’s econ­omy lost around 75,000 jobs in 2015 and 2016 dur­ing the oil bust, and only a third of those jobs have re­turned, ac­cord­ing to anal­y­sis by Bill Gilmer, the di­rec­tor of the In­sti­tute of Re­gional Fore­cast­ing at the Univer­sity of Houston’s Bauer Col­lege of busi­ness.

Le said his friends in pe­tro­leum en­gi­neer­ing have ex­pe­ri­enced more dif­fi­culty find­ing jobs in Houston than he did.

“I have a cou­ple friends who still haven’t been able to find a job,” Le said, “but I do be­lieve there are op­por­tu­ni­ties out there.”

Le is a first-gen­er­a­tion col­lege grad­u­ate whose par­ents em­i­grated from Viet­nam after the Viet­nam War. Grow­ing up, he said, it was never a ques­tion of whether he would go to col­lege be­cause his par­ents came to the United States in or­der for him to do so.

“I’m very proud of it,” said Le, said of his grad­u­a­tion. “One of my big­gest ac­com­plish­ments was grad­u­at­ing without any debt.”

Le, who re­ceived enough fi­nan­cial aid and schol­ar­ships to cover tu­ition and other ex­penses, is an ex­cep­tion. High stu­dent debt re­mains a prob­lem for to­day’s gen­er­a­tion of col­lege grad­u­ates, many of whom will have to put off buy­ing homes and hav­ing fam­i­lies as they pay loans that can reach into the six-fig­ures.

Crush­ing stu­dent debt

Stu­dent loan debt rose by $79 bil­lion in 2018 to $1.46 tril­lion in the fourth quar­ter, ac­cord­ing to the Fed­eral Re­serve Bank of New York. At the Univer­sity of Houston, stu­dents grad­u­ate with an av­er­age of $28,070 in debt, ac­cord­ing to The Texas Higher Ed­u­ca­tion Co­or­di­nat­ing Board.

Stu­dents at the Univer­sity of Texas at Austin and Texas A&M Univer­sity have even more, on av­er­age grad­u­at­ing $38,385 and $32,701 in debt, re­spec­tively.

While wage growth picked modestly up over the past sev­eral months as the la­bor mar­ket tight­ened, the me­dian salary for re­cent grad­u­ates with a bach­e­lor’s de­gree has stayed rel­a­tively flat, hold­ing around $44,000, for the last two decades.

“Em­ploy­ers haven’t had to raise wages as much,” said Parker Har­vey, an econ­o­mist for Work­force So­lu­tions, a work­force devel­op­ment or­ga­ni­za­tion. “The re­turn on in­vest­ment for de­grees was far more in fa­vor of the stu­dent in the past when the debt load was much smaller. Post-re­ces­sion, that has shifted as tu­ition kept go­ing up and wages stayed stag­nant.”

De­spite the im­proved con­di­tions, it can still be tough to land a first job, par­tic­u­larly as em­ploy­ers tend to fa­vor can­di­dates with more work ex­pe­ri­ence.

“Col­lege stu­dents now need to have work ex­pe­ri­ence be­fore they grad­u­ate,” said Har­ring­ton, the econ­o­mist. “Em­ploy­ers like to see kids who worked in the past.”

Dorothy Nguyen, a 2019 grad­u­ate from the Univer­sity of Houston, who has a de­gree in ki­ne­si­ol­ogy, the study of phys­i­cal ac­tiv­ity and its im­pact on health and so­ci­ety, said she and her friends have strug­gled to find po­si­tions for which they are qual­i­fied be­cause many em­ploy­ers are pri­or­i­tiz­ing ex­pe­ri­ence in the field.

“I feel like the out­look isn’t that great right now, per­son­ally,” Nguyen said. “Most of my friends aren’t able to find a job and are still search­ing. The whole wait­ing process is nervewrack­ing.”

Nguyen said most of the en­try-level jobs posted re­quire a few years of ex­pe­ri­ence, which can be frus­trat­ing to grad­u­ates who need that first job to gain the ex­pe­ri­ence. Still, she’s found a hand­ful of po­si­tions to ap­ply to in her field, and said she feels Houston’s econ­omy is strong enough that she won’t have to move.

“Houston is pretty big,” she said. “I would be open to mov­ing to some­where else, but right now I want to stay here.”

The gig econ­omy

Re­cent col­lege grad­u­ates face a chang­ing la­bor mar­ket. As the power of unions has di­min­ished and the growth of the so-called gig econ­omy has led to more on-de­mand work without ben­e­fits, the share of grad­u­ates work­ing part-time, but who want full-time jobs has in­creased. The share of un­der­em­ployed re­cent grad­u­ates is about 10 per­cent in 2019, about a per­cent­age point higher than the pre­re­ces­sion rate, ac­cord­ing to a re­cent study by the Eco­nomic Pol­icy In­sti­tute, a Washington think tank.

Har­vey, the Work­force So­lu­tions econ­o­mist, said grad­u­ates, even those with jobs, should keep the gig econ­omy in the back of their mind and make sure they are pre­pared with skills to take a free­lance or con­tract po­si­tions if they lose their full-time job when the next eco­nomic down­turn comes along.

“Don’t take (the expansion) for granted,” Har­vey said. “This is a strong job mar­ket, and things don’t last for­ever. Plan while the wa­ters are calm in the event that they be­come a lit­tle chop­pier.”

“This is a strong job mar­ket, and things don’t last for­ever. Plan while the wa­ters are calm in the event that they be­come a lit­tle chop­pier.”

Parker Har­vey, Work­force So­lu­tions econ­o­mist

Michael Wyke / Con­trib­u­tor

Al­most 2,000 stu­dents grad­u­ated from Rice Univer­sity on May 11. With de­mand high, they have a good chance of land­ing jobs.

Karen War­ren / Staff pho­tog­ra­pher

John Le, a re­cent Univer­sity of Houston grad­u­ate in me­chan­i­cal en­gi­neer­ing, ac­cepted a job from Baker Hughes over two other of­fers.

Michael Wyke / Con­trib­u­tor

Grad­u­ates wait for com­mence­ment cer­e­monies to be­gin May 11 at Rice Univer­sity. While new grad­u­ates are en­ter­ing the best job mar­ket in decades, en­try-level wages haven’t grown much but loan debt has bal­looned.

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