New college graduates’ salaries are barely increasing, study shows

By CareerFOXBusiness

Require a financial literacy class in order to graduate high school?

State Sen. Luke Rankin, (R-S.C.), on a new bill he introduced in South Carolina that would require high school students in the state to take a course in personal finance in order to graduate.

New college graduates hoping to earn more in their first job out of school than previous grads may be sorely disappointed when they get their first paycheck.

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Salaries for the graduating class of 2019 barely increased from 2018 despite the unemployment rate at a 32-year low, a study by Korn Ferry claimed. Researchers found new graduates with an undergrad degree will earn an average annual salary of $51,347 — less than a 2 percent rise from 2018’s average of $50,390.

The growth is nearly nonexistent when inflation is taken into consideration.

“With the U.S. inflation rate for the last 12 months hovering at about 2 percent, real wages for this year’s grads are virtually the same as last year,” Tom McMullen, senior client partner at Korn Ferry said.

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The study found that jobs in San Francisco had one of the highest starting salaries for new grads at an average of $65,621, compared to $63,995 in 2018. Boston and New York also showed starting salaries hovering around $61,000.

“Of course the cost of living in some cities, like San Francisco and New York, is much higher than other parts of the nation, so it stands to reason that salaries would also be higher,” McMullen said. “But regardless of location, it’s imperative to continually assess compensation to stay competitive.”

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Paychecks in Dallas and Houston, Tex., were on the lower end with an average of $51,000 to $52,000 annually for new graduates.

The U.S. unemployment rate is currently at 3.5 percent, a 50-year low, and a recent study showed tech and consulting firms offer the most entry-level jobs for new graduates. Those looking for a job with a high starting salary should seek out tech positions, according to Glassdoor.

A data scientist had the highest starting salary, with an average of $95,000, while software engineers began with a median base salary of $90,000, Glassdoor reported.