There have been a lot of dreary statistics on evening news shows and the pages of financial journals suggesting another layer of economic strife for young people: better jobs and bigger paychecks might not be guaranteed by a college diploma.
And beyond that, a recent study says while we can debate the numbers of underemployed youth (those with jobs they weren’t trained for), the problem exists and it may affect those trapped in it longer than we thought.
Employment data can seem complicated and confusing, but the basics aren’t – and if you are looking for a career, it’s your responsibility to develop a basic understanding of it.
About eight years ago, U.S. job numbers and other data suggested unemployment was high for young people but so was underemployment. Kids were getting fewer jobs and not in the fields they trained for, and down the road the economy might not need the training for which they were paying thousands to learn on campus.
Well, things have, of course, improved with better unemployment levels, but there’s still a stormy debate about whether we are suffering from a chronic over-education of young people, each side having different views about how the data should be formed.
A lot of the debate is based on Bureau of Labor Statistics data, a report from economists at the Federal Reserve Bank of New York and a study from Richard Vetter at the Center for College Affordability and Productivity that compiled underemployment data:
About half of college grads are in jobs that require a four-year degree and about a third are in jobs that only require a high school diploma, the Fed report said. Five million are in jobs requiring less than a high school education.
In 1970 only 2 percent of fire fighters and 1 percent of taxi drivers had college degrees, according to Vetter. In 2014, about 15 percent of them had bachelor’s degrees.
Vetter also says that “past and projected future growth in college enrollments and the number of graduates exceeds the actual or projected growth in high-skilled jobs, explaining the development of the underemployment problem and its probable worsening in future years.”
The critics of these studies and projections suggest that circumstances have gotten better as the economy has improved and that some assumptions (particularly how it was determined that certain jobs required a college degree) were wrong.
Perhaps the strongest advocate for a rosier picture has been Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce, who says that the “BLS data was not based on data at all”.
He says BLS predicted jobs requiring “postsecondary education” would be 33 percent and would grow to 35 percent by 2022. Carnevale and his supporters suggest that 59 percent of jobs require a college degrees and that 65 percent would by 2020, meaning we’ll need plenty of college grads. Remember, they both define the jobs requiring a college degree differently – so the employment data is similar, but the population being considered is not the same.
Today, some see even more positive indicators, for example jobs reports suggesting that the unemployment rate for college students has dropped below three percent a year ago and is just as good now. Others still debate that conclusion and suggest we need to re-evaluate the blanket recommendation that puts all students on course toward traditional four-year degree.
Beyond that, and regardless of how these data battles play out, it’s certain a sizable chunk of college graduates will be underemployed, and a study at Duke University that tracked thousands of adolescents suggests that problem has a longer term effect than thought.
It reports that about two thirds of those underemployed were still in that position a year later and many still were after 10 years – and it’s a bigger problem for minorities and women. Wages for underemployed were from about 2.5 to 5 percent lower for at least four years. The study also found that after 3 years being overeducated, the probability of not finding a job matching your qualifications drops but remains at 20%.
“Overall, this is a clear indication that over education is a persistent phenomenon,” the study says. “It is found to be very persistent for 30% of the sample.”
The study says it means lower career growth prospects for many college grads beyond the first job at Starbucks – and lower wages over a longer stretch.
Jim Paterson is a writer living in Lewes, DE.