But Americans may experience those consequences very differently depending on factors as simple as the year they got their diploma.
Students who graduate into a recession can end up earning $60,000 to $100,000 less over a lifetime compared to their peers who graduate in better times, according to several studies, and their salaries might not catch up for 10 or 20 years.
In some cases, the Great Recession underscored or compounded already existing problems. Wages have been weak since 1979, except for a period during the late ’90s, according to the Economic Policy Institute. At the turn of the century, wages began stagnating again, and the recession slowed them down even further.
Let’s dive into how the recession led to growing wage inequality, and how we’re faring almost a decade later.
What graduates are making after they leave college
From 2010 to 2015, the average starting salary for college graduates with a bachelor’s degrees leveled off from $52,353 to $50,219, according to the National Association of Colleges and Employers.
While NACE says that average salaries were “slightly affected during the 2008 stock market crash,” there weren’t many opportunities to get a job. Employers reported plans to decrease their number of new college hires by more than 20 percent. The unemployment rate for young college grads (ages 21-24) with bachelor’s degrees surpassed the 9 percent mark in late 2009, and almost reached 10 percent in July 2011, according to the Economic Policy Institute.
The adjusted average hourly wage for young college graduates with bachelor’s degrees, ages 21 to 24, stood at $20.37 this February, the most recent data available from the Economic Policy Institute.
Back in 2007, it was $19.26 — just below the $19.38 rate it was in December 2000. The Great Recession ended up compounding the country’s lackluster wage growth. After it hit, “young college graduates experienced the loss in wages felt throughout the economy,” EPI says.
One study from Goldman Sachs that looked at people who graduated college or began careers around the Great Recession found that their usual weekly earnings declined by 6 percent relative to the population during and after the recession on an age-adjusted basis.
But EPI notes that wages for young college graduates have been growing steadily since 2012, adding that we should expect continued wage growth to make up for the losses young graduates experienced following the recession. Since mid-2017, average hourly wages have started to inch above $20.
The gender pay gap
In early 2017, young male college graduates earned $20.87 compared to $17.88 for young female college graduates — a difference of nearly $3.
EPI said this gap is “particularly striking” because young women have higher rates of bachelor’s degree attainment (20.4 percent) versus young men (14.9 percent).
Some good news: female college graduates are seeing their wages recover for the first time since the recession — that rate is now up 1.8 percent. But they’re still paid 2.2 percent less than they were in 2000. Young male college graduates, on the other hand, are seeing a 5.4 percent increase in pay.
With men’s wages growing faster than women’s, EPI says that the gender wage gap for college graduates has widened since the Great Recession.
The college wage premium
Getting a degree, of course, can generally mean greater job opportunities and higher pay. In 2017, those with a bachelor’s degree earned an average of $32.49 an hour and those with advanced degrees earned an average of $41.36 an hour. Meanwhile, those with high school diplomas made $17.85 an hour.
From 2000 to 2017, the strongest wage growth has occurred for those with college degrees (6.5 percent), advanced degrees (7.1 percent) and those with less than a high school diploma (7 percent). However, from 2016 to 2017, the average wages for those with bachelor’s and advanced degrees did decline.
EPI says gains for those with less than a high school diploma in recent years have been striking — their wages grew the most of any group from 2016 to 2017 at about 2.8 percent. EPI says the increase may be due to state-level increases in the minimum wage. (Minimum wage hikes have gone into effect at the local level, too.)
And those with a high school diploma saw a slight bump from 2016 to 2017. Meanwhile, wages for workers with some college education were lower in 2017 than in 2000.
With research assistance from the APM Research Lab.
This story is part of Divided Decade, a year-long series examining how the financial crisis changed America.