College students graduating this spring are entering a job market that, by some measures, is still very strong. U.S. employers continue to add jobs and the unemployment rate is still near a decade-low. However, cracks have started to emerge as companies pull back on hiring and growth plans amid an uncertain economic outlook. 

In this report, we examined the outlook for new graduates in 2024 using real-time data from the over 300,000 small and midsize businesses on the Gusto platform. We rank the cities where new grads are most likely to find work opportunities, where they can expect to earn the highest salaries, and where these young professionals can expect their paychecks to go the farthest. For the purposes of this report, we define a “new grad” as a full-time salaried employee between the ages of 20-24 years old. 

Key Findings

• This year’s new grads are starting their careers working in person. New grads are 27% less likely to work fully remotely than comparable workers in their 30s. 

• New grad hiring expected to stabilize this year: Nationwide, Gusto data forecasts the hiring rate among new grads to peak at 6% this summer, nearly the same level it did last year. While this is still well below the peaks of 2021 and 2022, it is an encouraging signal to see that hiring rates for new grads have started to level off and are no longer in decline.

• New York City has the highest share of new grad hiring, accounting for nearly 10% of all new grad hiring over the past year.

• Austin is where new grads can expect their salaries to go the farthest. Due to the relatively low cost of living compared to other popular cities for new grads and the high earning potential, Austin is where new grad paychecks stretch the furthest. After taking the cost of living into account, new graduates in Austin make an average of $58,000 per year, compared to just over $28,000 in New York City.

New grads are coming into the office 

Since 2020, there has been widespread adoption of remote work, especially in the professional roles that many new grads often get hired into. However, full-time workers between the ages of 20 and 24 have a significantly lower share of fully remote work compared to other age groups. In fact, just 21% of new grad workers were identified as fully remote. This is 27% less than the average for full-time workers in their 30s, who are the most likely to be working in remote or hybrid arrangements. 

Some differences in the remote work share between age groups can likely be attributed to differences in seniority level. In general, senior or tenured workers may get more remote work opportunities. However, the magnitude of the difference suggests many college grads are choosing to start their careers in person. Many of these younger workers are likely looking for opportunities that are hard to replicate online, such as face-to-face time with bosses, networking, mentorship, and in-person collaboration.

New grad hiring expected to remain stable this year relative to last year

This year, we are seeing the new grad hiring rate begin to stabilize after falling sharply last year. Much of the decline last year can be attributed to an overall slowdown in the job market. During times of slower growth, companies are typically less willing to take risks on unknown quantities, such as new grads who often have little or no work experience. Compared to the frantic hiring of 2021 and 2022, continued economic uncertainty, along with rising costs, has made businesses more hesitant to expand and hire new workers in general. This dynamic could leave fewer opportunities for the class of 2024 than previous year’s graduates.  

That said, while the rate of new grad hiring is still depressed compared to the post-pandemic hiring boom, it is encouraging to see that companies are not necessarily pulling back on hiring new grads this year compared to last year. 

New York City is the most popular city for new grads. But Austin is where new grad salaries go the farthest. 

If a new grad is considering moving to a new city in search of a higher salary, they must also consider the cost of living in that city. Therefore, we adjusted salaries for the cost of living in each city to show where a new grad can get the most bang for their buck. The list below shows the cities with the highest share of new grad hiring, as well as the salary a new grad can expect to earn in each city. 

Overall, New York City accounted for the highest share of new grad hiring over the last year; nearly 10% of all new grad hires were in New York City. However, New York is also the least affordable city for new grads on our list. With the cost of living in New York 126% higher than the national average, the average new grad's starting salary of $64,134 will feel like just $28,479 when compared to many other cities. 

For new grads looking to stretch their salaries the farthest, Austin came out on top. In Austin, the cost of living is 1% lower than the national average, and with a relatively high average starting salary of $57,418, this will feel like $58,055 compared to other cities. 

Methodology

The insights in this report are derived using Gusto’s real-time payroll data from over 300,000 small and medium-sized businesses across the country. 

The hiring rate is the ratio of full-time exempt 20-24 year olds hired in a given month over the total number of full-time exempt workers aged 20-24 employed by companies on the platform in that same month. Additionally, the hiring rates for future months are predicted using time series forecasting methods based on the hiring rates of the prior two months and monthly seasonal patterns. The forecasts for 2024 are based on monthly data from January 2019 to March 2023. 

The average starting salary is calculated using the average annual salary for full-time workers between 20 and 24 hired in the past four months. Cost of living adjustments are created using C2ER’s 2023 Annual Average cost of living data.