Released: August 30, 2006

Incomes decline for young college grads

Source: By Michael Mandel, BusinessWeek

Details buried deep in Census Bureau data show a sustained drop in earnings for 25- to 34-year-old grads, to their lowest level since 1997. Young college grads are taking it on the chin. That’s what the new data from the government show—and it’s not a pretty sight.

On Tuesday, Aug. 29, the statisticians at the Census Bureau released the latest numbers on income and poverty, for 2005. There were plenty of meaty figures, both good and bad, to chew on. On the good news side, median household income rose by 1.1%, adjusted for inflation, the first such gain since 1999. The poverty rate dipped a bit, from 12.7% to 12.6%.

On the bad news side, real median earnings of full-time workers declined, with the earnings of men dropping to the lowest level since 1997. And income inequality widened a bit, with the top 20% of households getting more than 50% of all the income.

TOUGH SQUEEZE.  Perhaps the most distressing figure was one buried deep inside the detailed tables. It turns out that the median earnings of young college grads, adjusted for inflation, fell by an astonishing 3.3% in 2005. That’s on top of similar declines in 2004 and 2003. All told, the earnings of young college grads are down by almost 8% since 2002.

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