More college grads are getting better jobs

Employers are recruiting freshly minted college graduates more intensively this spring and not just to be food servers, cashiers and call center representatives.

Melissa Remmey, 22, who graduated from Wake Forest University in North Carolina last week with a political science degree, recently weighed four job offers, including positions as a business liaison, an analyst and a sales and marketing associate.

"I was surprised at the number I got," she says. "I heard a lot of 'no's' from companies" last fall. The Doylestown, Pa., resident accepted a Boston-based job from Oracle in sales and business development.

Even when U.S. unemployment hit 10% in 2009, the jobless rate for college graduates was about half the size. Many, though, were overqualified for their positions.

Since last summer, the share of working recent college grads in jobs that don't require at least a bachelor's degree has fallen to 44.6% from 46% and online postings for workers with degrees have increased, according to a report this month from the Federal Reserve Bank of New York.

That means that six years after the Great Recession ended, the share of recent graduates who are underemployed is still elevated compared with the pre-recession average of about 41%. The study defines recent grads as those who earned their degrees within the past five years.

Yet the drop in their underemployment rate is the first since the measure began rising in 2011, according to New York Fed economists and study authors Jaison Abel and Richard Deitz. The economists say higher-skill jobs are finally increasing more rapidly after lower-skill positions in sectors like restaurants and retail dominated payroll growth early in the recovery.

Since last year, the Labor Department has reported healthy gains in occupations such as computer professionals, engineers, accountants and architects

"What surprised us is the softness in demand for college graduates" until recently, Abel said in an interview.

One reason for the lag is that many employers slashed low-paying jobs aggressively in the recession and reinstated them quickly as the recovery began, says Mark Zandi, chief economist of Moody's Analytics. By contrast, they were slower to lay off more skilled workers, and needed to see a sharper economic upswing before adding to their ranks, he says.

Another factor is that after the recession many companies struggling with lower revenue cut their training budgets and sought to hire from a large pool of unemployed but experienced workers. With job growth accelerating last year and the unemployment rate at a near-normal 5.4%, employers are more willing to hire college grads and train them, says Amy Glaser, senior vice president of Adecco Staffing. "They're having to get creative," she says.

Although Remmey has never worked in sales, she says Oracle valued the skills she honed at Wake Forest, including research, writing, analysis and giving presentations.

Consulting giant Deloitte this year boosted its hiring of college grads for federal government consulting jobs by the most since the recession, in part because the pickup in the economy is spilling into the public sector, says Jim Hagy, who oversees that recruiting for Deloitte.

At Wake Forest, 144 employers attended career fairs on campus this year, up from 122 in 2014, says Mercy Eyadiel, who heads employer relations for the school. Many students, she says, are receiving multiple job offers.

Despite the upturn, many recent college grads are still struggling. When she graduated from Manhattan College in 2012 with a degree in English and religion, Lindsey Farmer hoped to land a job as an administrative assistant and rise through the managerial ranks. But she repeatedly lost out to workers with experience in the field.

So she took a $10-an-hour job as a ticket seller at a dine-in movie theater near her hometown of Issaquah, Wash., eventually rising to assistant manager.

"Once you graduate with a bachelor's, you think you'll be at the top of the earnings pool," she says. "But then you realize it's not like in the movies."

Recently, Farmer landed a job as a guest services manager at a Washington resort, a gig she hopes will be a springboard to owning a hotel. But even that position, she says, didn't require a college degree and her employer placed more value on her experiences abroad.

"I definitely feel like I lost time," says Farmer, who earns $13.50 an hour and finally has health and 401(k) benefits. "I thought I'd have a house by now and would be taking amazing vacations."

A 2012 study in the American Economic Journal found that college students who graduate in a weak labor market initially lose 9% of their annual earnings on average, but erase those losses in 10 years.

"They do catch up," says study co-author and UCLA economics professor Till Von Wachter.