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Many new college grads are stuck in low-wage jobs

Recent college grads stuck in low-wage jobs
Recent college grads stuck in low-wage jobs 01:25

Kayrisha Taylor graduated from college three years ago hoping to work at a non-profit or government agency that serves disadvantaged youth. 

Yet while the 25-year-old found a job in her field – working at an emergency shelter for homeless and troubled teens in Columbus, Ohio – she found that the $27,000 annual salary left her unable to make ends meet. With car payments, auto insurance, rent, utilities and students loans to deal with, Taylor said she feels "like I'm going to be in debt for the rest of my life." 

"It's most definitely what I want to do," Taylor said about the job, which she started in 2019. "It's just that the pay isn't meeting my needs. I find myself struggling month to month and paycheck to paycheck." 

Her predicament is common among recent college graduates, according to recent statistics from the Federal Reserve Bank of New York. The data show a growing number of young adults in the U.S. who, despite their degree, are underemployed and stuck in low-wage jobs – defined as those paying $25,000 or less. 

The inflation-adjusted data also show that fewer young people with diplomas have jobs that pay more than $45,000 a year. As of December 2019, only 35% of grads ages 22 to 27 earned that much — that's down from 48% in 1990.

The trend doesn't bode well for former students who already have higher monthly expenses than their parents and grandparents faced. The national average for rent was $1,474 per month in January, according to Yardi Matrix data. The average student debt balance is around $47,600, according to a 2018 NerdWallet study. (All told, Americans owe about $1.5 trillion in student loan debt.)

Taylor, who falls into the Fed's "underemployed" category, said her student loans were placed in forbearance because her full-time job pays too little to make payments.

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Although Kayrisha Taylor, 25, found a job in her field after graduating from college, she said she finds herself "struggling month to month and paycheck to paycheck" because of the low pay. Melita Peeks  

A low-paying job also kept Tatyannah George, 25, from pursuing her goal as a children's psychologist. After graduating from college in 2017, George found a stepping-stone job as a registered behavior technician. The job paid $8 an hour, which she said wasn't enough to fill her gas tank.

"I just didn't have the funds to be able to commute an hour or hour and a half every day," George said.

Needing to earn more money, she soon took a call-center position. The pay was better at $17 an hour, but she didn't like the work environment. "You're taking over 100 calls a day," George said. "You have a 45-minute lunch and you have two 15-minute breaks." 

Newly minted grads often struggle to land better-paying jobs because they'tr not paying enough attention to the job market, said Christine Cruzvergara, vice president of higher education and student success at Handshake, a San Francisco company that helps recent grads find their first or second jobs. 

Job search tips for college graduates 06:26

Because students are often more focused on their academic performance, they graduate with a narrow view of what jobs they're capable of landing, Cruzvergara said. "The majority of them are exposed to what their parents did and what their neighbors did or parents of their friends did, but really, that's a pretty small circle," she said. 

Another hurdle for recent graduates: They haven't had time to build the professional network that might lead to higher-paying jobs, Cruzvergara said. Young people should trying to start developing their contacts while still in college, Cruzvergara said.

"Making a living that's enough so they can support themselves and pay off those loans is a different pressure than a few decades ago when their parents were going to school," she said.  

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