Though unemployment in the US has fallen to it’s lowest in 32 years, salaries have not been so quick to change. A Korn Ferry study details how little salaries of recent college graduates have increased, especially if inflation is taken into consideration. The average annual salary for a recent graduate in 2019 is $51,347, a negligible increase of $957 or 2% since 2018’s average. The inflation rate has also increased by around 2% over the past year, meaning that the real growth of this salary average is non-existent.
The Study also acknowledges the few exceptions: salaries in cities such as San Fransico, Boston, and New York have a higher average, above $60,000. However, this could be attributed partially to the higher cost of living in these cities. Also, STEM jobs have the highest average starting salaries, at around $62,000.
Why, however, are the majority of salaries increasing so little? A correlation between the slow U.S wage growth and where national income is going may be to blame. Since the late 1970s, the majority of national income has been dispensed in corporate profits and investor dividends. Also, according to an Economic Policy Institue study, much of the wage growth of recent graduates over the past few decades can be attributed to the bursts of wage growth in the 1990s, and 2000s. Since then, there has been little improvement.
Unfortunately, while the wage for recent grads has remained relatively unchanged, the student loan debt has seen a rapid increase, totaling at an unprecedented high of $1.5 trillion.
