Fortunately I can now sit back, relax, and blog about one of my pet issues, which my team decided to take on as our official problem statement.
Underemployment of Recent College Graduates
That issue happens to be the problem of an increasing number of college graduates failing to find meaningful employment after graduation. We are just starting to dive into this topic but I am quite excited to begin to sift through the causal relationships and find leverage points where we may be able to make an impact on this problem.Here's how I see it:
Traditionally, college graduates could expect to find a well-paying, stable job right out of college and plan to buy a house within only a few years. By 2007, that expectation had already become less tenable as the cost of tuition, housing, food, transportation, and numerous other necessities were rising and taking a larger chunk of graduates' incomes, which were remaining flat. And with the financial collapse of 2008 this dream was dashed for an ever larger number of college students.
Here's a few pieces of data to show just how serious this is:
- According to The Atlantic, a whopping 53% of recent college grads are jobless or unemployed in 2012. Ouch!
- According to the same article, 18.4% of all Americans under 25 were unemployed in 2010.
- According to this CNN article, "Among 18- to 24-year-olds, 53% said they live at home or moved in temporarily, compared with 41% among adults ages 25 to 29, and 17% among those ages 30 to 34."
Causes
Here are just a few ideas to explore as the quarter goes on:- The outsourcing of a wide variety of jobs formerly performed by middle-class college graduates to developing economies in Asia. These fields include information technology, software engineering, human resources, and drafting - that is, somewhat technically-oriented jobs in which face-to-face interaction isn't regularly required.
- Computers. This could be seen as a type of outsourcing, as machines are now easily doing the jobs that humans used to do. Mail carriers, number crunchers, draftsmen, and research assistants have been replaced by email, Excel, AutoCAD, and Google, respectively. Okay, perhaps not completely, but the amount of work that one person can do has grown considerably, meaning less jobs for everyone.
- Concentration of wealth and a focus on ruthless efficiency. Cutting costs so stockholders and executives can rake in the dough has become something of a religion in our Chicago School-dominated economy. And as companies get bigger and bigger, economies of scale require fewer and fewer workers per unit of revenue.
- Lack of investment in infrastructure. America now lags behind much of the developed and developing world in transportation and communications infrastructure. Most European and East Asian countries have high speed rail and a well-maintained regional rail system, while the U.S. still depends on an outdated, crumbling, and congested freeway system designed for much lower population densities and different commuting patterns than now exist. In addition, the US has lagged behind in broadband adoption.
Why does this all matter?
While the answers may seem obvious, I believe it is also important to ask, "why does this all matter?"- College graduates who haven't established a career will be stuck behind their peers for years, and may never recover their economic confidence.
- Related to this is the larger prevalence of psychological issues such as depression, and associated healthcare costs.
- The reputation of our higher education system is at risk.
- It will take much longer for college graduates without a job to begin saving, which will severely affect their retirement comfort.
- Lower income often means delayed family formation and other potential social effects.
- As unemployment rises, crime often grows alongside it since people become desperate to find a way to get ahead.
To finish, I'd like to invite my lovely readers to give me any feedback (critical or creative) that they might have, as the more information and insight I can gather, the more likely it is that we'll be able to start to put a dent in this issue. Thanks for reading!
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ReplyDeleteCameron - Thanks for your thoughtful response. I think you make a very good point here regarding higher education not being set up for .... wait, where'd your comment go?
ReplyDeleteWell I've still got it in my gmail inbox. Your point on our system not being well set up for career counseling is certainly a valid one. I think a lot of students, myself included, came out of college expecting our to be straightforward like they might have been for our parents and were caught off guard by the competitiveness and dynamism of the job market. Nothing seems to stand still for very long.
ReplyDeleteA rather telling example is that of a friend of mine who was laid off - along with a large group of coworkers - after several years with an architectural firm and replaced by a group of recent college graduates who were willing to work for less pay. I suppose this also illustrates that companies are more focused on the bottom line than in building employees into the system. So learning the system and developing a game plan is ever more important for college graduates.
Thanks again!
Chris, I too am very interested in this issue of the underemployment of college graduates (and no, its not just because I'm on your team). This is very troubling to me for several reasons. First, a big part of the promise in America is that education is the key to success. Obviously from these statistics, that promise no longer holds true. More interesting to me was that the wages of college grads (that is those with a four year degree and not a graduate degree) have been declining since the year 2000. The cost of tuition for a four year college degree has been increasing quickly since 2000, along with average student debt upon graduation. Also, unemployment and underemployment for four year college graduates is steadily increasing since 2000. So, the only people in America that have seen increasing wages and steady levels of employment, are either those with a graduate degree or higher, or those at the top of large corporations and the financial sector. This is troubling because only 10.6% of the population holds a graduate level degree and those at the top levels of the corporate/financial sector of the economy make up an infinitesimally smaller portion of the population.
ReplyDeleteSo, in the last 10 years, since before the crash even, 90% of the American population has experienced rising debt levels, declining wages, and record un-employment. I think this is a pretty good sign that there is something very wrong with our whole system. You hit it on the head with concentration of wealth and outsourcing as major recent trends effecting the outlook on the American dream for college graduates, let alone the rest of the population.
So, more specifically, my concern here is that we still hold the belief in the mainstream that education is the key to making it financially or otherwise. We still are pushing for as many people to go to college as possible as a way to increase prosperity and quality of life. We still talk about the need to empower people in poverty to help themselves, a large part of which is usually education. But, all of the data above, with the addition of the voluntary quit rate which has also been plummeting since 2000, seems to point to a large shift in our economy. All else equal, a larger number of people voluntarily quitting jobs indicates a labor market in which job opportunities are plentiful and employed workers have the flexibility to look for jobs that pay better and more closely match what they want to do and excel at doing.
I think that all of this is indicative of a system which is most effective at extracting wealth, in all of its forms, from every locality in America and around the globe, and concentrating it in the hands of a very small class of people at the helm. From the system's perspective, what we do with our lives and our quality of life is only incidental to this core function of wealth extraction.
Hi Chris!
ReplyDeleteI really enjoyed reading about your topic. After reading your blog I did a search for articles on the topic and found one that I thought was interesting. It’s called “College Graduates Scramble For Full-Time Jobs” I don’t know if you have already seen this one or not but it brought up some things that I thought you might find interesting. Here is the web address: http://www.huffingtonpost.com/2011/04/15/jobs-graduates-work-full-time_n_849874.html
Anyways the article talks about a recent college graduate who is 23 and is having to work 5 part-time jobs just to make ends meet. It also goes on to say that recent grads are experiencing bad economic timing and that people who start work when times are tough not only get behind, but have trouble catching up. “It can take an average college student graduating into a recession up to 10 years to recover the wages they might have made during more robust economic times -- and possibly longer.” I found that quote to be interesting because it kind of goes along with what you were saying about “College graduates who haven't established a career will be stuck behind their peers for years, and may never recover their economic confidence.”
“The reputation of our higher education system is at risk.” I liked this point that you brought up because in the article it said “of the more than two million college graduates under the age of 25, 700,000 have a job that doesn’t require a degree -- whether working in retail, bartending, or waiting tables.” This can affect the reputation of higher education because people who are considering college may start to think, there’s no point I may not even get a job that requires a degree anyways.
Lastly I found it interesting that the article talked about the age twist effect. “Over the past decade, between 2000 and 2010, they’ve discovered an upside-down effect in the labor market: The younger you are, the more likely you are to get thrown out of it. Historically, and in every decade since the U.S. Bureau of Labor Statistics began compiling such data, it’s been the exact opposite.
Additionally, if the labor market behaved like it did back in 2000, Sum says there’d be an additional 7.5 million young people working today.” That might be something to look into more?
Anyways sounds like you guys have a great start on your project =)
Once again, great stuff, Chris! I'll just add a few points that I expect you and your teammates will get to in your systems analysis. First is the issue of the lack of a match between the jobs that ARE available in this country and the skills/interests of the college graduate workforce. Second is the question of the purpose of a college education: liberal arts perspectives on life (for rich kids?) or vocational training (for the rest of us?) Third, on the consequences side, speaking as a Boomer, if our kids can't find work, they won't pay into Social Security and will instead drain our existing retirement accounts.
ReplyDeleteThe only thing that prevents outright generational warfare is that we're all related to one another!
I look forward to watching your team's progress on this issue. I have four kids (two 22-year-olds and two 16-year-olds) who either are or will be facing this issue soon. Yikes!