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College degree isn't paying off in the job market

Students at the University of Birmingham take part in their degree congregations as they graduate on July 14, 2011 in Birmingham, England.

Steve Chiotakis: Later this week, President Obama will give a major speech to Congress on his plans to kick-start employment. Just about everybody who's
fortunate enough to have a job has been losing ground on wages lately. And it turns out, new college grads are no exception.

Marketplace's Bob Moon reports higher education isn't paying dividends as big as it used to.

Bob Moon: Lately, the procession of college graduates has had to join the parade of unemployed already looking for work. And according to research by the Economic Policy Institute, that means all their hard studying isn't paying off as much.

Heidi Shierholz: Employers know that they don't have to pay big wage and benefit packages when there's a queue of desperate new entrants to the labor market around the block.

Economist Heidi Shierholz says even as college costs have soared, the average starting wage for graduates dropped by roughly $1-an-hour over the past decade, to around $21.75 for men and $18.50 for women. There's still a wage premium for those who get their degree, but she says it's no longer growing.

Shierholz: College educated workers do, indeed, make a lot more money, both to start out with and over their lifetimes, but the payoff is stagnating.

She says there isn't much hope that'll change -- not with the jobless rate expected to stay above 8 percent well into 2014.

Shierholz: With unemployment that high for that long, there's just going to be nothing that's going to lift these wages up anytime soon.

If it's any consolation, Shierholz says that degree is still likely to improve your chance of at least finding a job.

I'm Bob Moon for Marketplace.

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