Unemployment drops to historic low as students get ready for graduation
With spring term half-way over, many University of Oregon seniors will soon be transitioning out of college life and into the workforce, and lucky for them, the job market is welcoming them with low levels of unemployment nationwide.
On May 4, the Bureau of Labor Statistics released its April hiring and unemployment report, providing a glimpse into the latest economic trends in the United States. The report states that the unemployment rate has officially dropped below four percent for the first time since 2000.
Mark Thoma, economics professor at UO for over 30 years, as well as an analyst for the business division of CBS News, says that while the economy is certainly in better shape than it was a decade ago, the unemployment rate alone isn’t able to paint the full picture.
“Although the unemployment rate looks historically low, and that we’re close to reaching full employment, there’s a lot of other signals saying that maybe we’re not there yet,” Thoma said. “We’re not seeing inflation. We’re not seeing wages going up.”
According to Thoma, in order to get a more complete image of economic trends, it’s important to look at a variety of sources, including employment to population and labor force participation rates. To be a part of the labor force, you either have to be employed or actively looking to be employed. If the participation rate doesn’t match up with the lowering unemployment rate, it can be a sign that people stopped looking for work altogether. Students who aren’t employed are not considered part of the labor force.
“What can happen is that a lot of people get discouraged and leave the labor force,” Thoma said. “And another factor to consider is the aging population. As the baby-boomers retire, the labor force gets smaller.”
As of April 2018, Oregon’s unemployment rate sits slightly above the national average at 4.1 percent. Lane County, which encompasses both Eugene and Springfield, is at 4.6 percent.
UO senior Katie Robison is graduating with an Environmental Studies degree this year and remains worried that she won’t find a job that aligns with her studies.
“I’m nervous to enter the workforce after graduation. I know so many people who have ended up with jobs that have nothing to do with their degree because it’s the only thing they could find,” Robison said.
Her fear of under-utilizing her degree has been echoed nationwide. As of March 2018, according to a dataset from the New York Federal Reserve, 42.5 percent of recent graduates are working in jobs that don’t necessarily require a college degree.
Regardless, according to UO economics professor Timothy Duy, having a college degree will help set graduates apart from competing applicants.
“If you come out of college in a strong job market, you will do a lot better,” Duy said. “Students looking for summer jobs are probably going to find themselves with more options than they’ve had in recent years. The job market is sharply better than it was five years ago.”
Duy predicts that sustaining a lower rate of unemployment should mean a pretty big increase in wages, as employers compete over a smaller number of candidates. This is typical when unemployment drops, and the job market becomes more competitive.
“Firms won’t be able to select only the very best and perfect applicants. They’ll be faced with the prospect of having to pay higher wages to retain employees,” Duy said.
Unlike her peer, Robinson, UO student Jordan Kihn-Stang is surprised by the number of people she knows who found work in their respective fields immediately after graduation.
“I have a lot of friends who recently graduated with Geology and Earth Science degrees that have found jobs directly related to their major within a few months,” Kihn-Stang said. “From oil jobs in Utah, to forest service jobs in California. It makes me feel way less-anxious about graduating after this term.
Both Robison and Kihn-Stang are looking to relocate after graduation, citing increased opportunities for work in larger cities. Duy agrees that most graduates tend to leave Eugene after finishing school.
“I think that most of our students tend to migrate away. This tends to be a place where people come for college before going back to your hometown or a bigger city, where there’s more job opportunities.”
Duy is confident that the job market for students is better than it’s been in years, and only getting better.
“It’s most likely, for the next year, going to continue getting better. I don’t foresee any dramatic shifts in the economy, so I would expect it to improve going forward,” Duy said. “It certainly won’t be any worse.”
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