Today’s college graduates expect to receive a starting salary at their first job that’s nearly double the actual average entry-level salary — and these unrealistic expectations extend to everything from their mid-career prospects to the financial value of their degree.
Those are some of the takeaways from a recent survey
conducted by Real Estate Witch, which gathered responses from 1,000 undergraduates pursuing a bachelor’s degree. Notably, the survey found that nearly half of respondents believe college isn’t worth the cost. And if given a chance for a do-over, 40% of them would make different choices
about what or where they studied.
A Strong Job Market May Skew Expectations
Wages, too, are rapidly increasing. Labor statistics show wages have shot up by 4.5% since December 2020, the largest spike in 40 years. Starting salaries have grown a healthy 8% over the past five years, outpacing increases in college costs. Average starting salaries are likely to increase further as employers with a multitude of job openings compete for a limited number of candidates.
Graduates know the job market is hot, but they overestimate how hot it is. According to a report by education analysts at ThinkImpact
, the average salary for a college graduate today is $55,260. Meanwhile, undergraduates now expect to earn $103,880 in their first job after college.
Those unrealistic expectations extend to mid-career earnings, too. Students today think they’ll be making just over $200,000 10 years after graduating — though the average mid-career salary is $132,497, according to Glassdoor. Even taking above-average inflation into account, students today are overshooting the mark.
This is largely a recent phenomenon. Real Estate Witch notes that in 2019, college graduates were expecting to make around $58,000 in their first job — a figure close to the actual average entry-level salary. Yet, three years later, the expected salary has mushroomed by $46,000. It’s clear something has caused college students’ expectations for their first salaries to grow uncontrollably — but what?
A Hot Job Market Has Overheated Expectations
Part of the explanation could be the ease with which many college graduates are getting jobs. As they enter a job market with many openings, recruiters have been forced to compete for candidates, often sweetening offers with enhanced benefits or salary bumps.
It’s probably not surprising that 44% of graduating students surveyed report their job search
has been much easier than expected. In fact, 15% of 2022 graduates have already accepted a job offer, and the rest expect to find a job in their field within three months of graduating.
The problem is that optimism doesn’t quite match reality, leading undergraduates to expect entry-level salaries that simply aren’t there. Although many will adjust their expectations, some won’t. The study found that one in eight students said they wouldn’t compromise their salary expectations for any reason.
Unrealistic Expectations Varied Wildly By Major, Not By Gender
Students in specific fields are much more prone to overestimating their future salaries. Journalism majors appear the most misguided — the $107,040 salary they expect to make right out of college is 139% more than a journalist’s median starting salary.
On the other end of the spectrum, computer science majors
are the most realistic. Although they still overestimate their future earning potential, their expected starting salary is only 27% higher than the actual average starting salary in the field ($95,690 vs. $75,100).
Additionally, most students believe gender affects an employee’s starting salary, with only 24% saying it doesn’t. Men are 14% more likely to think gender has no impact on starting salary, while women are 4% more likely to say it does – and think it's a serious problem.
Interestingly, although most students believe there is a gender-based disparity in salaries, both men and women have similar salary expectations. Women in the survey expected to earn $103,550 in their first job, only 0.5% less than what men expected.
College graduate salary expectations aren’t matching national averages, but that doesn’t mean they’re not making waves in the job market. If companies want to compete for early talent, they may need to offer higher starting salaries — but at what cost?
How did your starting salary expectations compare to reality? Share your answer in the comments to help other Fairygodboss members!