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Sorry, class of 2019: Paychecks for new U.S. college grads are barely rising

New college grad pay barely rising
Paychecks for new college grads are barely rising 01:39
  • Although U.S. unemployment is at its lowest level since 1969, pay for new college graduates isn't exactly jumping.
  • The average annual salary for students graduating this year is $51,347 -- that's just 2 percent more than last year.
  • Between 1989 and 2019, average wages for young college grads grew a total of only 14%.

Tough luck, class of 2019. The U.S. unemployment rate may be the lowest it's been in decades, but that doesn't mean salaries for new college graduates are taking off.

This year's crop of grads can expect an average annual salary of $51,347, according to consulting firm Korn Ferry — that's only 2% more than in 2018, barely outpacing inflation. The firm based its findings on an analysis of 310,000 entry-level positions across nearly 1,000 organizations.

What's going on? One long-term factor is slow U.S. wage growth dating back to the late 1970s. Most of the nation's income since then has gone toward things like corporate profits and investor dividends rather than employee pay. And more recently, the Great Recession walloped worker income as the jobless rate soared.

Between 1989 and 2019, average wages for young college grads grew a total of only 14% — that's an increase of less than half a percent per year, according to the Economic Policy Institute. Nearly 10 years after the downturn ended, pay for recent grads is roughly where it was in 2000, the left-leaning think tank found in a recent study.

While wages for recent grads have remained flat, student loan debt has climbed to a record $1.5 trillion in the U.S. The average household with student debt now owes about $48,000.

Millennials struggling under the burden of student loan debt 04:04

American graduates on average earn more in cities like Boston, New York and San Francisco, where salaries average upwards of $60,000, Korn Ferry found. However, those figures also reflect the higher cost of living in those cities. Salaries in other metros like Atlanta were lower than the national average, though marginally at $50,577.

National and state averages can obscure disparities across cities, occupations, gender and race. For example, a customer service representative and call center specialist earns just $32,700 and $39,000, respectively. A graphic designer can earn $47,964. STEM-related careers pay significantly more the national average, with R&D scientists starting at about $62,000 per year.

Not surprisingly, women and people of color in the class of 2019 face similar wage gaps as can be found across the U.S. labor force. Young male college grads earn an average of about $22 an hour, or about 13 percent more than women in comparable jobs, who earned $19.20, according to EPI. Recent black grads earn about 12 percent less than their white counterparts, averaging $18 per hour. 

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