A Few Interesting Stats

2012 June 5
by SJ Leeds

I want to share a few interesting stats and ideas that I’ve read recently.

 

College is Expensive.  66% of students who earn a bachelor’s degree have student debt compared to 45% twenty years ago.  (This stat actually understates the change because the 66% does not include students who have family loans, while the 45% number does.)

 

A Lot of People Have College Degrees or Have Attended College.  There are now more unemployed people who have either attended college / received an associates degree / completed college than unemployed people who are classified as not having attended college.

 

Young College Graduates vs. Young High School Graduates.  Young college graduates have an average 8.5% unemployment rate over the past year compared with 21% for young high school graduates.  But, if you add in young college graduates who are either discouraged (and dropped out of the labor force) and those that are working part-time (but want full-time work), the rate has averaged 19.1%.  This is nearly twice the pre-recession level.

 

I Went to College for This?  Even those recent graduates who have a job may be unhappy.  Nearly 40% of recent graduates who have a job are working in jobs that don’t require a degree.  That was approximately 30% in 2007.

 

Ugly Data for Recent Graduates and Their Parents.  Approximately one in five American adults age 25 to 34 now live with their parents—almost double the percentage from 30 years ago.

 

The Participation Rate: Discouraged Worker Effect vs. Additional Worker Effect.  It was strange to see the labor force participation rate increase from 63.6% to 63.8% in the most recent employment report.  Normally, when the job market is weak, people become discouraged and leave the work force.  Some people think that this increase is either statistical noise or the possibility that the job market is stronger.  But, one other theory is “the additional worker effect.”  This is the idea that when a household worker becomes unemployed, other members of the household enter the labor force and look for a job (to supplement the household income).

 

Emerging Market May Be Less Risky Than Developed Market.  The world’s five largest economies (the G-5), have 40% of world GDP and 70% of world sovereign debt. Emerging markets collectively have 40% of world GDP and 10% of world sovereign debt.

 

It’s Not All Facebook.  Globally, money raised from stock market flotations so far this year is down 46 percent from the same period in 2011, according to Thomson Reuters data.

 

Good News for Manufacturing.  GE, Ford and Boeing have recently announced that they’re shifting more manufacturing back to the U.S.  Our manufacturing is becoming more competitive.  This is the result of (1) stagnant wages for a decade; (2) increasing productivity; (3) the decline of the dollar.  The wage of an American manufacturing worker is comparable to where it was in 2000 (in real terms).  Average European manufacturing wages rose 13% (in dollar terms).  In Spain and Italy, they rose 27% and 33% respectively.

 

My Thoughts on the Eurobond (bonds issued and backed by the entire EU).  Imagine you have two roommates.  You are each responsible for paying your third of the rent to the landlord.  It turns out that one of your roommates can no longer afford to pay her third.  Would your reaction be, “I should change the lease so that I’m responsible for her third, even though it’s unlikely that she’ll ever get her finances together?”  If that’s your reaction, you’re probably in favor of Eurobonds (bonds issued and backed by the entire EU).

 

Have a great week.

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