College Graduate Unemployment Rate in 1970: A Generational Perspective

The economic circumstances faced by college graduates have varied significantly across generations. Generational conflict, a recurring theme throughout history, has become increasingly prominent. Concerns among millennials and older members of Generation Z reflect anxieties about a labor market that may not be as robust as it once was. To understand the current landscape, it's vital to examine the experiences of previous generations, including the baby boomers who entered the workforce in the 1970s.

The Economic Landscape of the 1970s

The economy that baby boomers entered in the 1970s was marked by significant challenges. Productivity dropped, and young people confronted high unemployment rates, nearing 10% by 1980, driven in part by high numbers of new entrants to the labor force. Inflation in the 1970s also reached nearly four times that of 2015 (2.7%). The collapse of manufacturing devastated much of the Northeast and particularly the Midwestern industrial heartland. In California, the shrinking of the aerospace industry took away many high-paying jobs.

Unemployment Trends: Then and Now

While current younger generations may face fewer headwinds from unemployment or inflation compared to the 1970s, they still face difficult prospects, particularly in certain regions like California. Even the better educated worry about artificial intelligence that is making the job market tougher for graduates.

Examining unemployment trends for high school and college workers aged 22-27, the unemployment gap between these groups has declined continually since the 2008 financial crisis, recently reaching its lowest level since the late 1970s. The evidence that a college degree significantly improves one’s employment prospects and earnings potential is overwhelming.

Starting Salaries: A Historical Overview

NACE (then the College Placement Council, or CPC) began reporting salary data for new college graduates in 1960 through its Salary Survey report. From 1960 until 1970, when an economic recession occurred, the overall adjusted average salaries rose. Recruiting Year Adjusted Average Salary:

1960 - $47,442
1965 - $52,994
1970 - $58,650
1975 - $51,160
1980 - $51,047
1985 - $52,566
1990 - $48,832
1995 - $45,202
2000 - $54,304
2005 - $50,087
2010 - $52,353
2015 - $50,219

Overall, from 1960 through 2015, the inflation-adjusted average starting salary for a new bachelor’s degree graduate increased by 5.9 percent.

Salaries by Major: Then and Now

Starting salaries for new college graduates have been highly correlated to two main factors-the overall economy, and supply and demand by academic major.

Business Majors

For the most part, starting salaries for the three business majors presented here-accounting, business administration/management, and marketing-followed the trend seen for bachelor’s degree graduates overall. In more recent years, the demand for accounting majors has grown, largely due to the passing of the Sarbanes Oxley Act.The change in adjusted average salaries from 1960 through 2015 also shows that accounting majors have far more earning power today.

Year Accounting Business Admin/Mgmt. Marketing Overall Avg.
2004 $42,763 $41,640 $47,442
2005 $48,459 $46,444 $45,217 $52,994
2006 $59,127 $50,994 $49,650 $58,650
2007 $49,794 $42,789 $40,657 $51,160
2008 $42,691 $40,215 $37,804 $51,047
2009 $44,072 $42,488 $40,202 $52,566
2010 $46,818 $41,741 $41,766 $48,832
2011 $43,118 $39,698 $39,218 $45,202
2012 $50,057 $49,576 $45,507 $54,304
2013 $51,110 $46,991 $43,336 $50,087
2014 $52,451 $47,695 $45,178 $52,353
2015 $51,426 $49,494 $43,678 $50,219

Engineering Majors

Engineering majors have consistently earned above-average starting salaries. Since 1970, however, their growth in terms of real dollars has been relatively slow and steady, unlike what was experienced by the business, humanities, and mathematics disciplines.

Year Chemical Electrical Mechanical Overall Avg.
1960 $45,570 $50,249 $48,846 $47,442
1965 $56,258 $56,171 $55,645 $52,994
1970 $63,795 $61,461 $61,320 $58,650
1975 $60,707 $54,870 $56,951 $51,160
1980 $59,463 $55,799 $56,228 $51,047
1985 $61,524 $59,291 $58,667 $52,566
1990 $62,307 $56,375 $56,882 $48,832
1995 $61,575 $55,660 $55,189 $45,202
2000 $66,666 $66,288 $62,660 $54,304
2005 $63,844 $61,623 $59,721 $50,087
2010 $70,352 $64,522 $63,002 $52,353
2015 $65,782 $67,593 $62,239 $50,219

Humanities Majors

In any given year, students who major in the humanities fields tend to earn average salaries that fall below the overall average. For humanities majors overall, the change in the starting salary adjusted for inflation from 1960 through 2010 is -5.1 percent, as the change in adjusted starting salary for 1960 through 2015 is 31.7 percent.

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Year Humanities English History Overall Avg.
1960 $40,237 $47,442
1965 $44,866 $52,994
1970 $49,509 $58,650
1975 $36,698 $51,160
1980 $35,460 $51,047
1985 $37,943 $52,566
1990 $41,180 $38,258 $40,297 $48,832
1995 $35,220 $34,484 $39,232 $45,202
2000 $45,150 $39,691 $43,088 $54,304
2005 $37,570 $37,435 $37,778 $50,087
2010 $37,927 $38,972 $41,992 $52,353
2015 $52,976 $38,600 $38,936 $50,219

Mathematics Majors

Of all the fields compared thus far, the adjusted average salaries for mathematics majors are closest to the overall adjusted average salaries. In terms of overall salary growth for mathematics majors, the change in the starting salary adjusted for inflation from 1961 through 2015 is 13.7 percent.

Year Mathematics Overall Avg.
1965 $52,227 $52,994
1970 $56,157 $58,650
1975 $46,444 $51,160
1980 $48,700 $51,047
1985 $53,161 $52,566
1990 $47,955 $48,832
1995 $46,739 $45,202
2000 $56,945 $54,304
2005 $51,543 $50,087
2010 $52,582 $52,353
2015 $56,440 $50,219

Factors Influencing Graduate Outcomes

Several factors have contributed to the challenges faced by college graduates, both in the past and present. These include:

Economic Conditions

The overall state of the economy significantly impacts hiring and salaries. A booming economy typically leads to increased hiring and higher salaries across various fields of study. Conversely, during recessions, employers tend to hire fewer graduates and offer lower salaries.

Supply and Demand

The demand for specific academic majors plays a crucial role in determining starting salaries. Fields like STEM (science, technology, engineering, and mathematics) often command higher salaries due to high demand and a relatively limited number of graduates.

Skills Gap

Graduates are not meeting employers needs. Students are also struggling to pay off their student loans. Employers are looking for people who have learned how to work well with others, and have gained substantial communication skills as well as critical thinking abilities.

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Generational Differences

Some employers express concerns about the work ethic of millennials and Generation Z, suggesting they may be more focused on lifestyle and leisure than career advancement.

Global Perspectives on Graduate Unemployment

The challenges of graduate unemployment are not unique to the United States. Several countries, including China, have experienced similar issues.

China's Experience

China's recent upsurge in graduate unemployment relates to several factors, including education policy-making, economic development, and reforms in the economy and higher education. In 2014, roughly 15% of new graduates were unemployed six months after graduation. Measures taken by the Chinese government to address this issue include injecting investments into the economy to create jobs and boosting postgraduate enrollments.

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