Here's the brutal truth for the college class of 2024: There are not enough college-level jobs for all of you. Some people may get caught up in it. Some people may have to settle for jobs that don't require a college education. And history shows that many people who get jobs that don't require a college education are still struggling in those types of jobs 10 years later.
One mystery is why the lifetime earnings of college graduates are so much higher than those with less than a high school diploma, even though so many college graduates do not actually hold college-level jobs. We'll talk about that in a moment. Lastly, I would like to express some hope.
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A February report from the Burning Glass Institute and Strada, which analyzes the job market, found that 52% of college graduates are underemployed in the first year after graduation, and that's because they are in jobs that don't require a degree. It means being employed in Institute of Future Work.
The report found that approximately 88% of underemployed people are “severely” underemployed five years after leaving school. The top five jobs they hold are information and records clerks, sales supervisors, retail sales representatives, service sales representatives, secretaries and administrative assistants.
“Ten years after graduation, 45% of graduates remain underemployed,” the report states.
Burning Glass has found that the best way to avoid underemployment is to choose a major that employers want and complete an internship. If you don't do these things and you still don't have a job after a few weeks on the job, it's probably not a good idea.
I dug a little deeper into this rather depressing report by interviewing Matt Siegelman, director of the Burning Glass Institute, and other labor market experts.
The first question I asked Siegelman was whether the U.S. was producing too many college graduates, oversupplying the market and leaving too many graduates disappointed.
“For the time being, it is difficult to conclude otherwise,” he said. He added that the imbalance between supply and demand has worsened over the past four years, as the fastest growing jobs have been in low-educated occupations.
Siegelman said that in the long run, “I believe the United States will benefit from having a highly educated workforce.” He added: “The demand for talent is not constant. The center of gravity of our economy is increasingly in the knowledge economy. Jobs follow talent.”
That makes sense. Over time, employers should seize the opportunity to reap benefits by reconfiguring work to make the most of currently underutilized talent. They have been searching for ways to use their minds since the beginning of the industrial revolution. Back then, even graduating from high school was rare and special.
According to the Burning Glass study, people who studied computer science, engineering, mathematics, or math-heavy business fields such as finance and accounting are currently in much better shape. Students majoring in education and health are also popular.
Less in demand: graduates in public safety and security, recreation and wellness studies, and general business fields such as marketing.
Employers are eager to hire accounting majors, said Michael Steinitz, senior executive director of professional talent solutions at human resources consulting firm Robert Half International.
Steinitz said new graduates are generally attractive to employers because they tend to be tech-savvy, cost less, and can be trained to fit the employer's needs.
Underemployment of college graduates is not a new problem. In fact, the outlook for graduates is better than in previous years, as the overall unemployment rate is low (3.8% in March). An informal survey by the American Association of University Administrators found that 83% of employers expect graduate hiring rates to increase or remain the same this spring, about the same as last year, but with employers actively recruiting. It is expected that this will be lower than in 2022, which was the previous year. of the pandemic.
I would like to return to the paradox of relatively high salaries for college graduates, even though they appear to be in the black. I think the biggest reason is that the average number of college graduates is greatly increased by those who become big names.
There are also blue-collar jobs, such as truck driving and plumbers, that pay well but have flat lifetime earnings. In other words, a 55-year-old truck driver doesn't earn much more than a 25-year-old driver. An old thing. In contrast, white-collar jobs that require a university degree tend to have greater growth potential in terms of know-how and therefore greater income.
“College serves as a gateway to the profession, increasing opportunities for wage advancement through on-the-job learning,” Harvard Kennedy School economist David Deming writes in a summary of a new study.
The situation could be even tougher for the 2025, 2026 and post-2020 ranks, as artificial intelligence could take on some of the entry-level roles and knock out the bottom rung of the career ladder.
A (partial) solution is to develop a combination of skills that are difficult for AI to replicate. The most successful graduates combine technical skills with what are broadly referred to as interpersonal skills, including the ability to communicate in print and in person, motivate, and work in teams. Sigelman's example: A data scientist who is good at writing and a marketing humanities major who learns structured query languages.
Deming said that “if we were to design a university from the ground up” with the needs of employers in mind, there would be more emphasis on teaching teamwork and a wide range of skills needed in the workplace.
Of course, such thinking is of little use to today's unemployed elderly people. That said, there are plenty of opportunities to overcome a poor start. Despite Burning Glass' warnings, Deming remains cautiously optimistic. Life is long. He gave me some quick calculations, based on the National Youth Longitudinal Survey, that about 60 percent of college graduates who take jobs outside of the college level end up in managerial or professional positions.
“It's always better to get a good first job than not get a good first job,” Deming says. However, “the jury disagreed with the idea that if you don't get a good job straight out of college, everything will be ruined.”
Outlook: Consumers are hurting
“Savings rates are falling and interest payments on mounting debt are soaring, suggesting consumers may be nearing a breaking point,” said the chief economist at the Conference Board, a business-backed research group. , Dana Peterson said Friday. “Our call for slower real GDP growth in the second and third quarters remains reasonable,” he added. Peterson said higher-than-expected inflation makes it less likely that the Federal Reserve will cut interest rates in an effort to lift the economy.
quote of the day
“Complex adaptive systems require only the advancement of a mathematical variable called “time,'' and as the system runs, it moves from a chaotic, disordered, undifferentiated, and independent state to an organized, highly differentiated state. It is characterized by a natural progression towards a state of high interdependence. ”
— J. Doyne Farmer, The Third Culture: Beyond the Scientific Revolution, edited by John Brockman (1995)
