The average class of 2017 starting salary — and what grads should do with their money
The all-nighters and mediocre dining hall food are about to pay off: Salaries for college graduates in 2017 are projected to be the highest in at least 10 years, according to an analysis from recruiting firm Korn Ferry. The firm analyzed pay for 145,000 entry-level positions across the country and found that recent grads can expect to make an average of $49,785.
That's 3% higher than the average for 2016, the firm found — and about 14% more than the people who graduated in 2007, adjusted for inflation.
"With unemployment rates back down to pre-recession levels and jobs requiring more highly specialized skills," Benjamin Frost, a Korn Ferry project manager, said in a press release, companies "need to offer competitive compensation packages if they hope to attract top talent."
Of course, averages can be misleading, particularly if they're being skewed by a small number of very high-paying jobs. And as the left-leaning Economic Policy Institute notes, the Great Recession set a low bar for economic opportunity. In fact, the rate of underemployment — which includes part-timers who would prefer full-time work — is higher than it was a decade ago: currently 11.9%, compared with 9.6% in 2007 and 7.1% in 2000. And the gap between what college and high school graduates make is at all-time highs.
Even among college grads, there are large gaps in salary levels. On the high end, STEM jobs are still fetching top take-home pay. The best salaries in the analysis were for software developers, who will make $65,232 this year, 31% above the national average. You can see the top five highest salaries below.
• Software Developer: $65,232
On the lower-paying end, jobs in customer service, logistics, and call centers paid far less: between 11% and 29% below the national average, including assistant jobs earning less than $36,000.
Across the U.S., salaries went up in major cities, though increases were uneven, per data from last year's Korn Ferry report. Workers in San Francisco, for example, saw pay rise by nearly 5% to $62,829, but workers in Atlanta saw a bump of less than 1% to $49,038. (Still, Atlantans don't have sky-high housing costs to contend with.)
All that said, there's no reason to freak out if you haven't found a job yet. The Wall Street Journal reports that only 15% of 2017 college graduates have received a job offer so far, according to a survey by consulting firm Accenture PLC; it's normal for figuring out a plan to take a couple of months.
Have faith: An analysis of the class of 2015 from the National Association of Colleges and Employers found 82% of grads had a job or were pursuing more education within six months of graduation. Here are some tips on making your resume stand out and getting the perfect job recommendation.
How grads can make the most of their cash
If you are one of the lucky college graduates with a job already lined up, then there are a lot of smart ways to put those new paychecks to work — right away. For one, you should consider getting an early start on your student loan payments, assuming you have any.
The grace period on student loans lasts a full six months, but depending on how many of your loans are unsubsidized they'll be accruing interest that whole time. Ignoring the grace period entirely and starting to make payments out of that first check could end up saving you hundreds or even thousands of dollars depending on the size and term of your loan.
Free of student debt? Line up some good roommates — or consider living at home if it is an option. A survey from 2016 found recent grads in expensive cities spend as much as 80% of their income on a median-rent one-bedroom. Most experts recommend spending no more than a third of your pay on housing, to leave room for all of those other important expenses, like eating.
Finally, assuming your employer offers a 401(k) plan with matching — as about half of those with plans do, with benefits that vary widely — be sure to take them up on it, since this is free money.
Anything left over? Consider putting a few dollars a week into an individual retirement account, traditional or Roth, which offer benefits down the line, from tax advantages to increased flexibility.
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