The college class of 2019 is graduating into one of the best job markets in decades as a soon-to-be record economic expansion lowers unemployment, boosts wages and keeps employers hiring — if not competing — for workers.

It’s a welcome change for recent graduates, who have spent much of the decade since the last recession struggling to break into a labor market with far more workers than jobs. Even graduates with social sciences or humanities degrees who are typically left behind in the job market have much better odds of getting hired than three or four years ago because the demand for labor is so great right now, said Paul Harrington, a professor who studies labor markets at Drexel University in Philadelphia.

“You have to go back to the 1990s or 2000s to find a labor market as strong for graduates,” Harrington said. “This will be the best year in a long time. There’s a lot of opportunity for every major.”

The U.S. economy has created jobs from 102 consecutive months, including more than 260,000 in April, and unemployment nationally, 3.6 percent, is the lowest in a half-century. The Texas and Houston economies are humming, too, with their jobless rates falling to record lows in April, 3.7 and 3.2 percent respectively.

Among recent graduates, the unemployment rate nationally has slipped to 3.7 percent from 7.1 percent in 2011, according to the Federal Reserve Bank of New York. Graduates with degrees in engineering, specifically mining and chemical, as well as computer science and finance are particularly well-suited to find high paying jobs this year, said Harrington.

“There’s widespread demand,” Harrington said. “I’m very bullish. This is a great year.”

Looking for a job in Houston

In Houston, graduates in recent years also had to contend with a brutal oil bust — the worst in a generation — that threw tens of thousands of energy industry employees out of work and weighed down the region’s economy. With the oil and gas sector recovering and crude prices now just below $60 a barrel, economists say the local economy is poised to enter a period of sustained, yet moderate growth.

John Le, a mechanical engineering graduate from the University of Houston, found the local job market robust. He had received three job offers upon graduation, including two in Houston. He ultimately accepted an offer with Baker Hughes, an oilfield services company.

But still, the oil and gas industry hasn’t made a full recovery, even as jobs in extraction creep back each month. Houston’s economy lost around 75,000 jobs in 2015 and 2016 during the oil bust, and only a third of those jobs have returned, according to analysis by Bill Gilmer, the director of the Institute of Regional Forecasting at the University of Houston’s Bauer College of business.

Le said his friends in petroleum engineering have experienced more difficulty finding jobs in Houston than he did.

The local economy: Houston likely to see moderate growth as economy returns to oil basics

“I have a couple friends who still haven’t been able to find a job,” Le said, “but I do believe there are opportunities out there.”

Paying for it

Le is a first-generation college graduate whose parents emigrated from Vietnam after the Vietnam War. Growing up, he said, it was never a question of whether he would go to college because his parents came to the United States in order for him to do so.

“I’m very proud of it,” said Le, said of his graduation. “One of my biggest accomplishments was graduating without any debt.”

Le, who received enough financial aid and scholarships to cover tuition and other expenses, is an exception. High student debt remains a problem for today’s generation of college graduates, many of whom will have to put off buying homes and having families as they pay loans that can reach into the six-figures.

Student loan debt rose by $79 billion in 2018 to $1.46 trillion in the fourth quarter, according to the Federal Reserve Bank of New York. At the University of Houston, students graduate with an average of $28,070 in debt, according to The Texas Higher Education Coordinating Board.

Students at the University of Texas at Austin and Texas A&M University have even more, on average graduating $38,385 and $32,701 in debt, respectively.

While wage growth picked modestly up over the past several months as the labor market tightened, the median salary for recent graduates with a bachelor’s degree has stayed relatively flat, holding around $44,000, for the last two decades.

“Employers haven’t had to raise wages as much,” said Parker Harvey, an economist for Workforce Solutions, a workforce development organization. “The return on investment for degrees was far more in favor of the student in the past when the debt load was much smaller. Post-recession, that has shifted as tuition kept going up and wages stayed stagnant.”

A degree not what it used to be

Despite the improved conditions, it can still be tough to land a first job, particularly as employers tend to favor candidates with more work experience.

“College students now need to have work experience before they graduate,” said Harrington, the economist. “Employers like to see kids who worked in the past.”

Dorothy Nguyen, a 2019 graduate from the University of Houston, who has a degree in kinesiology, the study of physical activity and its impact on health and society, said she and her friends have struggled to find positions for which they are qualified because many employers are prioritizing experience in the field.

“I feel like the outlook isn’t that great right now, personally,” Nguyen said. “Most of my friends aren’t able to find a job and are still searching. The whole waiting process is nerve-wracking.”

Nguyen said most of the entry-level jobs posted require a few years of experience, which can be frustrating to graduates who need that first job to gain the experience. Still, she’s found a handful of positions to apply to in her field, and said she feels Houston’s economy is strong enough that she won’t have to move.

“Houston is pretty big,” she said. “I would be open to moving to somewhere else, but right now I want to stay here.”

Recent college graduates face a changing labor market. As the power of unions has diminished and the growth of the so-called gig economy has led to more on-demand work without benefits, the share of graduates working part-time, but who want full-time jobs has increased. The share of underemployed recent graduates is about 10 percent in 2019, about a percentage point higher than the prerecession rate, according to a recent study by the Economic Policy Institute, a Washington think tank.

Harvey, the Workforce Solutions economist, said graduates, even those with jobs, should keep the gig economy in the back of their mind and make sure they are prepared with skills to take a freelance or contract positions if they lose their full-time job when the next economic downturn comes along.

“Don’t take (the expansion) for granted,” Harvey said. “This is a strong job market, and things don’t last forever. Plan while the waters are calm in the event that they become a little choppier.”

erin.douglas@chron.com

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