Newly minted graduates are in for a shock.
Although the job market and starting salaries for the Class of 2022 look significantly better than last year, they may fall far short of graduates’ expectations.
Employers plan to hire about 31% more new degree holders from this year’s graduating class than they hired from the Class of 2021, according to a report from the National Association of Colleges and Employers.
The increased demand for workers is also driving starting salaries higher for some majors, NACE found.
The average starting salary for this year’s crop of graduates is projected to be more than $50,000, based on the most recent data.
Yet current college students expect to earn twice that — $103,880 — in their first job, according to a separate survey of college students pursuing a bachelor’s degrees by Real Estate Witch in March.
Undergraduate students across all majors and institutions overestimated their starting salaries by 88%, Real Estate Witch found.
Ten years into their careers, students anticipate making more than $200,000, well over the average mid-career salary of $132,497.
In fact, salary projections for the Class of 2022 vary greatly depending on the area of concentration.
Employers projected starting salaries would increase 5.4% for math and sciences majors and decrease 14.8% for humanities majors, NACE found.
Overall, computer sciences majors are likely to be the highest paid just out of college, earning $75,900, on average, followed by engineering graduates.
“Students really want to understand the hiring demand and starting salaries within their major because they differ,” said Mary Gatta, NACE’s director of research and public policy.
That underscores the importance of career counseling and career services, she added. “It’s also an equity issue,” Gatta said. The idea is that pay transparency will bring about pay equity, which is essentially equal pay for work of equal or comparable value, regardless of worker gender, race or other demographic category.
“Informing students and workers can make a difference when we think about salary negotiations — it’s one way to break down systemic barriers.”
Beyond highlighting the overwhelming burden of student loan debt, the pandemic has also shed light on the financial benefits of earning a degree.
Seven in 10 seniors graduate with debt, owing about $30,000 per borrower.
Yet a majority of graduates with student loans said their college education improved their career opportunities and earning potential.
Studies show that college graduates will earn nearly $1 million more over the course of their careers.