This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
4/06/2007
Grad Salary
I read an interesting article found here. It talked of the rise of offers for certain graduates. This is of particular interest as I am about to graduate college and one wonders what all that time and energy spent on school work was for. Some of the biggest increases were in Marketing and Engineering. I think this is due in turn to the low unemployment rate that the nation is experiencing. With more and more employers looking for workers, it naturally causes the price paid for the workers to go up. An easy adjustment to the supply and demand curve. The low unemployment is also apparent in that more and more employers are looking at colleges for employees. With such a low unemployment, companies know that they are not going to be able to hire an already experienced employee, and thus turn to these graduates for employees. I am glad for the low unemployment and the benefits that it offers.
Subscribe to:
Post Comments (Atom)
4 comments:
I am interested in this topic as well. One part of this issue that I find very interesting is that even though starting salaries are rising because of the low unemployment rate, once that employment rate increases again, all those people who found employment at higher wages will still have that higher wage. This is very beneficial to the worker and detrimental to the company. It means that companies are going to have to plan for higher salary expenses in the future. For me as a graduate that will be great, but for the employers it could be terrible.
I would guess that most soon to be graduates are interested in this information, but I wonder why some disciplines like Accounting are seeing a decrease in increasing compensation, while others like Marketing are seeing an increase in compensation. Maybe major companies are looking to grow employees within the company that can help them differentiate their product through marketing efforts, instead of focusing on cost cutting measures? I don't know for sure, but possibly this may be a trend for the future of business.
Statistics show there are close to 80 million baby boomers getting ready to retire and only half that amount in the next generation (the Xers) to replace them. However, the Echo boom has close to 70 million soon to be employees. So unemployment rates are low now, but what happens to the unemployment rate when those 70 million graduate and start looking for jobs and will be willing to start at a lower rate than I am currently making (I am in the X generation)?
The other thing that affects the starting salary is the amount of people qualified for a job in that industry, not just the number of people looking for jobs. 10 years ago, computer programmers were starting at a lot higher salaries than $50,000 a year. Now, there are tons of computer programmers and the pay is not that high. The trend in which industries are paying the most often changes because people see the need and the benefits of the higher salary. But when the supply of labor in that industry grows, the salary falls back to equilibrium. I think the best thing that we as graduates can do is to set ourselves apart from the other employees with excellent work and work ethics.
Post a Comment