College grad underemployment is risky

If a college degree is the key to a well-paying job, then how to explain the results of the latest study by the Federal Reserve Bank of New York?   It found nearly 43 percent of recent graduates are working in positions that do not require a degree (“Settling for subpar job right out of college can hurt your career for years ” Los Angeles Times, Jun. 13).

Making matters worse, the longer grads stay in these jobs, the worse their career prospects become.  Let’s not forget that this situation is exacerbated by heavy student loan debt.  Despite this bleak picture, we persist in the fiction that college is still for everyone.  I’ve not seen a study that compares lifetime incomes of vocationally-educated students with academically-educated students.  By the time student debt is paid off, I wonder if the premium attached to a four-year degree would be nearly so high.

Better yet, how about a study of students who went to community college and earned a certificate in a trade with students who went to a four-year college and received a degree in the humanities.  Instead, we have generalizations about the marketable value of a bachelor’s degree.  I’m not saying that college should be evaluated solely by what graduates earn over a lifetime.  There are clearly other benefits.  But the cost of a four-year degree today is unprecedented.  Try telling graduates who are struggling to pay their bills that they made the right decision.

(To post a comment, click on the title of this blog.)

2 Replies to “College grad underemployment is risky”

  1. Completely agree that society should provide many more vocational training programs and should encourage high school grads to pursue careers via those programs. Currently, society conveys to high school grads the impression that only failures/losers go that route. This is irrational — we have far too many college grads having generally useless BAs or BSs who, as you note, are working in jobs for which those degrees are irrelevant. At the same time, we have far too few competent plumbers, electricians, carpenters, auto repair techs, HVAC techs and computer programmers (as well as far too few competent managers/owners of small businesses providing these services).

    A major obstacle to redirecting high school grads from college to career training programs is the fact that many employers view (and use) the college BA or BS degree as a screening tool when assessing applicants for jobs or promotions. The employers do this notwithstanding that the knowledge acquired in obtaining the degree is completely irrelevant to the job or promotion at issue. Not sure whether this approach is rational or irrational. Certainly, having a BA or BS degree shows the employer that the applicant was able to show up for and pass four years of college courses — providing some evidence re the applicant’s intelligence and diligence.

    A second major obstacle to redirecting high school grads from college to career training programs — particularly for men — is the societal perception that a person with a four-year college degree is a better bet as a potential life partner than a person with only an associate degree or a training program certificate. I think this holds true even for those whose associate degree or training program certificate yields a decent annual income. In choosing life partners, people — particularly women — are preconditioned to view the four-year-college-degree holder as more likely to possess positive non-economic traits and less likely to possess negative non-economic traits.

    No easy answers. At least I have none to offer.

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  2. Labor Lawyer: Only in this country is vocational education viewed as intrinsically inferior to an academic education. Too many students will find out that their bachelor’s degree no longer contains the wage premium of the past. Let’s not forget that student debt cannot be discharged in bankruptcy. When that debt is figured into the so-called wage premium, I question if the degree is nearly as worthwhile as widely believed. Yet we persist in the fiction that college is for everyone.

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