Recent College Graduates' Pay Down in 2011

As part of the research for the 2010-2011 PayScale College Salary Report, we looked at the pay trends of recent college graduates and found startling results.

With the unemployment rate for college graduates at 4.3% in August, less than half the national average, you would think the strong demand would translate into higher wages.

While the graduates of some schools continue to bring in the big bucks, and overall earnings of bachelor's graduates are substantially higher than high school grads, the data show that all is not well in the market of recent college graduates.

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Are Recent College Graduates Earning More This Year?

For background on the PayScale College Salary Report, see our methodology description and earlier posts. For this post, the key features are that we look at the median total cash compensation for recent bachelor's graduates (average age 25 with about 2 years of career experience) of over 1000 US institutions.

The downward effect on this starting pay of the jobless recovery is clear in the data. Looking across all 1004 schools surveyed in both 2010 and 2011, the average early career pay is $41,600, a respectable sum. 

The shocker is that the average pay of recent graduates is down 0.8% from 2010, which was itself down from the 2009.

This defies market forces logic. Unemployment is nearing historical "full-employment" levels for bachelor's grads as a whole. In the 12 months since July 2010 inflation (as measured by the consumer price index) is up 3.6%.

Together these mean that,  this year's typical recent grad is earning 4.4% fewer real dollars than last year's typical recent graduate, even though unemployment is low. That is one hefty pay cut!

What is going on? The most obvious answer is that this year's recent grads are finding jobs, but they are not the same high paying jobs found by previous year's of graduates. Since we look at graduates over the last 5 years, this year's report is made up mostly of graduates of 2006 through 2011, which has 2 classes who got jobs before the collapse at the end of  2008. Since last year's report covered 2005 through 2010, there were 3 classes from better times.

More recent graduates are simply taking lower level jobs or accepting lower levels of pay than earlier years' grads. The new grads are not unemployed, but they are working, for example, at Safeway as a cashier, rather than at Bank of America as a financial analyst.

The most worrisome part is that the PayScale College Salary Report is about the typical pay of graduates who have full time jobs – this does not consider graduates who are unemployed or working part-time Note: the unemployment stats also doesn't distinguish part-time employment from full.

2011 Pay at Top Schools: Heading Up?

When looking at the full list of 1004 schools, we are considering a broad swath of higher education. Perhaps the story for pay is better for the "elite" schools at the top of our starting pay list?

It turns out this is not a case of "the rich get richer": the pay of graduates from the top schools for early career pay are also down, and more sharply than for all graduates:

  • The average starting pay of the top 10 schools is $63,900, good pay, but down 1.5% from 2010
  • The average starting pay of the top 20 schools is $61,300, down 0.8% from 2010
  • In 2008, before the financial collapse, 4 schools had median starting pay above $70,000/year: Cal Tech, MIT, Harvey Mudd and Stanford; in the 2011 list, no school does
  • The average starting pay of the top 10 in 2008 was $67,000, nearly 5% higher than this year's top 10
  • Similarly, the top 20 are down 3.5% from 2008

Being paid $63,900 a couple years out of undergraduate is clearly doing well, but the recession has clearly hit the pay of the graduates of top schools in "in-demand" fields, as well as the average college graduate.

The Top 20 Schools For Starting Bachelor's Grad Pay

Below is the 2011 list of the top 20 schools for starting bachelor's degree graduates' salaries. There are a few obvious facts that jump out about the list:

  • High pay is about the major first, reputation second, and region of the country third
  • Heath care schools are 4 of the top 20: Loma Linda (3), Molloy (5), Thomas Jefferson (11), Felician (14)
  • Of the rest of the top 20, 14 have a strong engineering and science focus
  • The only two general universities with typical graduate early career pay in the top 20 are Stanford (16) and University of Pennsylvania (20)
  • Stanford has strong engineering and U of Penn strong business undergrad programs, which certainly help their graduates' typical starting pay
  • California and the Northeast schools dominate the top 20: only Colorado School of Mines (6), Rose-Hulman Institute of Technology (9), Missouri University of Science and Technology (15) and Georgia Institute of Technology (18) are outside Cal and the NE
  • Best ranked state university for starting pay is the Colorado School of Mines (6), which graduates petroleum engineers (highest paid major) among other well paid engineering majors

Rank 

School Name 

Starting Median Salary

1 

Massachusetts Institute of Technology (MIT) 

$69,700 

2T 

California Institute of Technology (Caltech) 

$69,600 

2T 

Loma Linda University 

$64,600 

4 

Harvey Mudd College 

$64,400 

5 

Molloy College 

$64,000 

6 

Colorado School of Mines 

$63,400 

7 

Worcester Polytechnic Institute (WPI)

$61,200 

8 

Polytechnic Institute of New York University (NYU-Poly) 

$61,000 

9 

Rose-Hulman Institute of Technology (RHIT) 

$60,700 

10 

Carnegie Mellon University (CMU) 

$60,000 

11 

Thomas Jefferson University 

$59,800 

12 

Rensselaer Polytechnic Institute (RPI)

$59,500 

13 

Stevens Institute of Technology 

$59,400 

14 

Felician College 

$58,700 

15 

Missouri University of Science and Technology (MST) 

$58,600 

16 

Stanford University 

$58,200 

17 

Clarkson University 

$57,900 

18 

Georgia Institute of Technology

$57,500 

19T 

State University of New York (SUNY) Maritime College 

$57,300 

19T 

University of Pennsylvania 

$57,300 

Whether you are in the Northeast or Southwest, are you earning what you should for everything you know and do? For powerful salary data and comparisons customized for your exact position and qualifications, build a complete profile with PayScale's Salary Survey.

Cheers,

Al Lee
Director of Quantitative Analysis, PayScale, Inc.

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