The Age of Grad Gloom
Why Aren’t College Graduates Getting The Jobs They Want?
By nearly all measures, the U.S. economy is booming.
The unemployment rate as of May 2019 was a miniscule 3.6 percent, the economy has continued to grow quarter after quarter, and the stock market is flying into the stratosphere.
But not all Americans are sharing equally in this growth and prosperity. In fact, one segment of the population in particular is lagging behind at a time when indicators suggest they should be racing ahead: recent college grads.
According to the Federal Reserve Bank of New York, the underemployment rate among college graduates aged 22-27 is 41.3 percent. That’s higher than it was in the early 2000s when the overall unemployment rate was a full two points higher than it is today.
So why are the people who seem best equipped to thrive in today’s job market so often left taking jobs that are beneath their education level? Fair spoke to a number of experts and found a number of reasons the job market isn’t providing the professional opportunities many college graduates expected to get out of school.
Here are some of the biggest ones.
There Are A Lot of College Grads
In the 1960s, approximately 8 percent of the US population had a college degree, but that number has steadily grown year by year. By 2018, the percentage of Americans with college degrees was approximately 35 percent.
Having a degree still makes a significant impact on your lifetime earning potential, but more than ever, recent graduates have to find ways to stand out from their peers as the competition grows. And recent graduates aren’t just competing with each other, but also with the millions of Americans holding advanced degrees.
According to the US Census Bureau, the number of Americans with graduate degrees has skyrocketed, with that total nearly doubling in the last 20 years. In the year 2000, 15 million Americans had advanced degrees, but by the year 2018, that number had almost doubled to over 28 million. So as the number of graduates grows, the comparative value of a degree diminishes.
Social Media Offers New Employer Options
Facebook, Twitter and other social media platforms have impacted our lives in countless ways. But one way which has been severely underappreciated is how social media has changed the way companies hire and the criteria they use to search for candidates. Joni Holderman is a professional resume writer and the founder of Thrive! Resumes. She says that the emergence of social media employment sites has upended the traditional hiring process.
“Employers pay thousands of dollars per month for LinkedIn accounts that allow them to contact experienced professionals currently working at any company,” Holderman told Fair. “So, the employer is no longer limited to hiring just recent grads, or just candidates who applied for the job. They can choose from a pool of millions of experienced potential candidates. This means there's huge demand for professionals with 3-10 years of relevant experience, and very little demand for those with less experience.”
Recent college graduates are finding that social media isn't just leading to increased competition for dates and status, but for jobs as well.
In today’s technology-focused economy, not all college degrees are created equal—and employability varies wildly depending on what you major in.
Moe Abbas, CEO of educational marketplace GenM, told Fair how he evaluates college degrees when reviewing a resume.
“I like STEM degrees on a resume. Those are valuable. But if I see a psych degree or a comms degree or a business admin degree, you’re going to get a negative mark from me,” Abbas said. “There’s nothing they’ve learned in those programs, other than some vague soft skills, that are going to be associated with the job that they’re applying for.”
While Abbas offers an admittedly tech-centric assessment, statistics from a Burning Glass Technologies and Strada Institute for the Future of Work report seem to back up his take. Only 15 percent of underemployed workers were STEM majors, and among all majors, engineering and computer science have the lowest rate of underemployment.
However, you shouldn’t hate on those “soft skills,” said Cheryl Costantini, a Vice President at Cengage. She said interpersonal skills can be incredibly valuable as long as they’re effectively represented on an applicant’s resume and are coming through in job interviews. Among the most valuable soft skills Costantini said employers are looking for include listening, attention to detail, effective communication, and critical thinking.
“Recent grads who can effectively relay those skills will stand out,” Costantini said.
Besides, many non-tech degrees are still proving plenty valuable. While liberal arts degrees like English and history might be cultural pincushions among some in the tech world, grads with those degrees fare reasonably well on the job market, with the Burning Glass Technologies report finding less than a third facing underemployment. The report also found that a philosophy degree is actually one of the ten majors least likely to be underemployed.
However, those who majored in general studies, human sciences and law enforcement/homeland security fared the worst in the Burning Glass Technologies survey, with an underemployment rate of almost 50 percent.
The most important takeaway from speaking with our experts was that employers aren’t just looking for degrees; they’re looking for specific and practical skill sets that can immediately be applied to the job they’re hiring to fill.
Despite the cultural advancements of the past decades, there remains a troubling disparity among men and women as it relates to underemployment.
Despite a higher number of women graduating from college than men, women are still more likely to be underemployed than their male counterparts. While almost half of all female graduates are overqualified for the jobs they have, only 37 percent of men experience the same issue.
This pattern is consistent even for recent grads with highly coveted STEM degrees, with 32 percent of women receiving math degrees considered underemployed compared to 25 percent of men. The same holds true of computer science where female degree holders face a 22 percent likelihood of underemployment compared to 20 percent for men.
Consequences of Being Underemployed
Having a job beneath your education may not seem like a huge deal when you’re first out of college, but studies have shown that the consequences of taking a lower-paying job can follow an individual for years.
According to a study conducted by Burning Glass Technologies and the Strada Institute for the Future of Work, underemployed recent grads will earn on average $10,000 less annually than their fully employed counterparts.
The study went on to show that a full two thirds of those underemployed recent grads will remain in jobs beneath their education for the next five years and that three quarters of that group remained underemployed after 10 years, potentially costing them hundreds of thousands of dollars in earnings over the course of their lifetime.
How to Avoid Being Underemployed
The experts Fair spoke with suggested a number of steps you can take to avoid underemployment, but they’re all centered around the idea that you must make yourself as attractive a candidate as possible to your future employers.
While more Americans than ever are earning college degrees, not enough of them are leaving college with the skills that their future employers are looking for.
Before you commit to a degree, take a look at the job market and see which field has the most in-demand skills. Even degrees with low demand can have certain specialties that are coveted by employers.
It’s also important to gain relevant job experience while you’re still in college, whether through internships or part-time jobs. Employers want candidates who will need minimal training and already have the skills and knowledge that they’ll need to succeed.
“If I’m hiring you for a market role and you haven’t done marketing before, you can’t call yourself a marketer,” Abbas said. “You’re not a marketer, so I’m not going to hire you.”