The number of newly graduated college students per year has increased approximately 50% in the last fifteen years. A reduction in average wages would be expected from supply and demand alone.

However, I don't think an "oversupply" is the correct explanation. At least in the technical, engineering, and manufacturing fields that I know, companies are desperate for more good people. And this is even as STEM graduation rates are at an all time high.

Looking at it from the the graduate's side, every single clueful person I know that graduated in the last five years is employed, and quickly so.

How can can average wages be going down, even demand increases?

The key is that we are talking "average wages". College graduates in any field are not a uniform bunch.

The number of new competent individuals graduated seems to be holding steady, while around them grow an increasing sea of people who don't show up for work, or have a clue about getting actual work done in their profession.