Settling in: Recent college graduates overqualified, underemployed
Recent college graduates might fear that they are not qualified for the jobs they want, forcing them to compete with mid-level professionals who, in these challenging economic times, will also accept lower-level positions. But college students and recent graduates shouldn't fear. Research and recent surveys show that they might actually be overqualified for these jobs. Unfortunately, that's not necessarily a good thing either.
The value of college, and the problem of supply and demand
Venerable consulting firm McKinsey recently published an insightful report on recent college graduates. According to the report, which surveyed almost 5,000 graduates, one-third of respondents stated that college "did not prepare them well for employment." The report's somewhat sobering findings include the fact that four to five times more graduates are working in sectors such as restaurants or retail than would prefer to. While working at a restaurant throughout college is an attractive proposition for many young people, making this line of work a full-time career was certainly not the goal.
The elephant in the room is as follows: Is a college degree worth it? It depends on who you ask. However, according to data from the Bureau of Labor Statistics, college graduates earn more over their lifetime than non-college graduates. In addition, there's an inverse relationship between educational achievement and unemployment. However, according to the McKinsey report, about half the graduates said that they work in a job for which their specific degree is not a requirement.
In another study, the non-profit Center for College Affordability and Productivity found that nearly half of working Americans who hold at least an undergraduate college degree are overqualified for their jobs. The somewhat disconcerting statistics show that 15 percent of taxi drivers currently hold a college degree, as opposed to 1 percent in 1970. According to economist Robert Vedder of Ohio State University, the essential problem is the fact that the BLS reports there are simply fewer jobs available that require college degrees (28.6 million) than the number of college graduates who want these jobs (41.7 million). It's a problem of supply and demand with immediate consequences for job seekers.
All these challenges for students might be somewhat alleviated if politicians have anything to say about it. In a rare bipartisan move, both Democrats and Republicans have agreed on sponsoring a bill called Student Right Before You Act, which would force universities to disclose detailed graduation rates to prospective students. While this would be valuable information, the act doesn't address the real problem, which boils down to creating more jobs that do require a college degree.
Graduates want jobs, but not these jobs
Even though most of us have, at one point or another, taken a position that we didn't really want, it is concerning that recent data shows that a 2012 college graduate takes a job he or she does not want every five minutes. This previously mentioned study, conducted by McKinsey, determined that roughly 120,000 professionals took jobs in sectors outside their field of study.
While it might not be surprising to hear that jobs for newly minted anthropologists, comparative literature majors, and philosophy graduates don't necessarily abound, this trend cuts across most majors and fields of study. That's right, mom might have been wrong. In the new economy, even business majors are not landing jobs in their fields at the rate that they would like to -- and their degrees might not even be required. However, according to data from the Labor Department, college graduates still have a better shot at finding a job than their counterparts who only hold a high school diploma. The jobless rate for college graduates older than 25 in May was 3.8 percent, while the rate for high school graduates was 11.1 percent.
Where have the jobs gone?
Years ago, a college degree was a relatively safe investment, as it was a rite of passage of sorts into a middle-class job. That might not be the case today. According to analysis by the Associated Press, only half of the jobs that disappeared during the recent recession have come back. So what happened to the other 50 percent? This disappearing act is the result of one of the greatest blessings (and perhaps biggest curses) of our generation: technology. According to the AP, these positions will not be coming back, eliminating a good basis of jobs in mid-range industries. Research firm Moody's Analytics reports that only 2 percent of the roughly 3.5 million jobs that have been created in recent years fall into that comfortable mid-range earnings category. So what's a recent college graduate to do?
Many of these graduates have no choice but to find work outside their field, which usually pays less than they were expecting to earn after attending college for four years. According to the Center for College Affordability and Productivity study, the fact that graduates are overqualified for their positions -- think retail -- is likely to continue as the current state of affairs becomes the "new normal."
Bureau of Labor Statistics, Employment Projections: http://www.bls.gov/emp/ep_chart_001.htm
Center for Economic and Policy Research, Young College Graduates: Overqualified http://www.cepr.net/index.php/blogs/cepr-blog/young-college-graduates-overqualified
CNBC.com, Overqualified Yet Underprepared, Graduates Face 'Unique Paradox': Study: http://www.cnbc.com/id/100727466
Huffington Post, New College Grad Takes Job They Don't Want Every 5 Minutes: Study: http://www.huffingtonpost.com/2013/06/24/college-graduates-jobs-overqualified_n_3491246.html
USA Today, Study: Nearly half are overqualified for their jobs, http://www.usatoday.com/story/news/nation/2013/01/27/study-nearly-half-are-overqualified-for-jobs/1868817/