Monday, October 18, 2010

The Underemployed College Graduate

This page has moved to http://centerforcollegeaffordability.org/archives/1761.


By: Christopher Matgouranis

After reluctantly agreeing to help my sister move into her college apartment, I was given the duty of getting the cable set-up. As it was required that I be present while the cable company representative installed the cables, we engaged in some small talk while he worked. It turns out that he attended my university and had actually taken many of the same classes that I have. This individual had graduated with a bachelor’s degree several years prior but was now just setting up cable television for college students. This is just one of the many anecdotes about underemployed college graduates. Do any data exist to suggest that, rather than just an anecdote, such underemployment is a systemic problem?

The Bureau of Labor Statistics keeps a superb data base of educational attainment levels by occupation, publishing detailed attainment data for well over 700 professions. But what does this data show? Overwhelmingly this dataset supports the anecdotal evidence that there are legions of underemployed college graduates. The table below highlights just a few of the examples, showing the percentage of workers in a given profession who possess at least a bachelor's degree.

Profession Proportion with a College Degree
Flight attendants 29.8%
Retail salespersons 24.5%
Customer service representatives 21.6%
Baggage porters and bellhops 17.4%
Secretaries (not legal/medical/executive) 16.6%
Hotel, motel, and resort desk clerks 16.1%
Telemarketers 15.8%
Taxi drivers and chauffeurs 15.2%
Manicurists and pedicurists 11.5%
Shampooers 11.5%
Locksmiths and safe repairers 10.2%
Telecomm. installers & repairers 13.1%


Other examples include the aforementioned mail carriers, of whom 13.9 percent have at least a bachelor’s degree. It is quite unlikely that the sociology or humanities classes these individuals took in college are making them more proficient at delivering the mail. 24.1 percent of all food service managers hold a bachelor’s degree, while an additional 3.1 percent have a master’s degree. Is a college degree requisite for running a restaurant, say McDonald’s or Friday’s? Probably not.

This is basic empirical evidence that we have produced too many college graduates. The promise of a bachelor’s degree falls short when people end up doing things that they could have done without attending college. It is very likely that many college grads did not attend college with the dream of becoming a shampooer. Further evidence against the bachelor’s, the unemployment rate of college graduates, currently at 4.4 percent (higher than the historical average), is not as high as the overall rate, but indicates that the bachelor’s degree is not a guaranteed path to a cushy middle class life-style.

When considering public policy aimed at increasing the percentage of college graduates in the labor force, it must be an imperative to consider what these people will be doing after graduation. Is it socially responsible for us to encourage individuals to enroll in college and accumulate massive debt when the benefits are becoming increasingly uncertain? I think not. An increase in the overall percentage of college graduates will just see that more will end up underemployed (or unemployed altogether).

This increase will also place an upward pressure on credential inflation. Employers currently require college degrees for jobs that really do not warrant one. For example, a quick search of monster.com will show that for many jobs, such as an office clerk or administrative assistant, a college degree is preferred or even required, when the work entails tasks that high school/ vocational grads could easily handle. This problem will only be exacerbated if the norm moves more towards holding a college degree. It may be a laudable goal to increase the amount of college graduates in the work force, but it is truly misguided. Society would be better served if it instead focused its resources towards vocational educations and certifications, a less costly and more effective alternative.

35 comments:

COD said...

Public policy aimed at creating more college graduates isn't really concerned with sustainable jobs for them. The purpose of the policies are to prop up the education bubble and the lending industry that supports it.

Duncan Bayne said...

You're talking about higher education as though the purpose of getting, say, a maths degree is to improve your employability. It's not; higher education is not the same thing as vocational training, it is a form of self-improvement.

Brendan said...

I think this demonstrates that not all college degrees are equal. I doubt that many of these underemployed graduates were biology or electrical engineering majors. We need to encourage more graduates to pursue STEM (science, technology, engineering and math) so that society can receive a better return on its investment and the graduates are better able to repay their debt.

Tim of Angle said...

"Employers currently require college degrees for jobs that really do not warrant one. For example, a quick search of monster.com will show that for many jobs, such as an office clerk or administrative assistant, a college degree is preferred or even required, when the work entails tasks that high school/ vocational grads could easily handle."

Unfortunately, that's not the case. Our schools are so crappy these days that employers are forced to require a college degree in order to get the minimal skills that were imparted by high schools in our parents' or grandparents' generations. Just look at some of the high school and even 8th-grade exams from fifty or a hundred years ago; most high school graduates these days would be totally lost attempting them.

Oren said...

I agree with your points, but think you may be giving too little credit to other purposes of higher education beyond occupational qualification.

I would argue that for most college attenders, the initial impetus (and continuing rationale) for choosing such a path relates to the social, political and cultural implications of the experience of college, and not the physical and quantifiable degree which they may never even use to achieve specialized and exclusive employment.

On the other hand, for developing countries, increasing domestic human resource capacity and economic efficiency are surely guiding policy goals for education.

Glen S. McGhee said...

"This is basic empirical evidence that we have produced too many college graduates. ... When considering public policy aimed at increasing the percentage of college graduates in the labor force, it must be an imperative to consider what these people will be doing after graduation. Is it socially responsible for us to encourage individuals to enroll in college and accumulate massive debt when the benefits are becoming increasingly uncertain? I think not. ....This increase will also place an upward pressure on credential inflation."

Exactly right. All this is on target, and should open the debate on what we will be replacing our "contest mobility" (more like a lottery every day) system of higher ed with. But given our current state of tunnel vision, we are heading off a cliff.

In what amounts to an exercise in upside-down logic, policy wonks see the steady rise of entry-level credentials as justifying BAs-for-all, instead of its result.

I even agree with this comment: "Public policy aimed at creating more college graduates isn't really concerned with sustainable jobs for them. The purpose of the policies are to prop up the education bubble and the lending industry that supports it."

When I processed student loans earlier this year, I was sicked by the avalanche of Hispanics signing up with online schools for dead-end programs. Now Obama wants to improve retention and graduation rates for Hispanics -- oblivious to the fact that rising credential inflation eats away at the incentives for a degree, day by day.

Duncan is right, but not in the way he thinks: "the purpose of getting, say, a maths degree is to improve your employability. It's not." This is true -- I have a math degree, and even some math graduate work, but it is useless to me now.

"[H]igher education is not the same thing as vocational training, it is a form of self-improvement." It may not be the same thing, but "self-improvement" is a common good (a luxury, really) that taxpayers and future generations can ill afford. (And remember this: the current HE spending trends are unsustainable). And when you end up with a degree and jobless, crushed by stifling student debt, you will realize that "self-improvement" is only a substitute for actual involvement in the world, and is the only option for those in what Ivar Berg calls "aging vats". If there were enough jobs to go around, such idealism would quickly vanish.

There are enough underemployed engineers and scientists to argue against Brendan. Corporate America is very happy with the flood of graduates -- they can skim the cream of the crop. So, yes, Brendan is right too: all college degrees are not equal, and a lot depends on where you are going. But even the Ivy league is no longer a guarantee -- well, maybe a guarantee of student debt, that's all. And especially in regard to advanced degrees in the sciences, credential inflation rules. Adding to the number of graduates (without jobs for them) only undercuts the value of their degrees. And you may have noticed something important: it doesn't just take a BS in chemical engineering to cut it anymore; now you have to have an MBA on top of that! STEM grads are stuck with PLUS loans, just like everybody else.

And this last comment: for those of you that don't see what all the fuss is about, you are about to receive an education. A real education.

waffen said...

This article seems like a transparent attempt to make yourself feel better about not finishing college. Trust me, those of us with college degrees are glad we have them.

Glen S. McGhee said...

Waffen obviously doesn't know about Thiel's $100K bonus for those that drop out.

http://www.good.is/post/entrepreneur-offers-grants-for-kids-who-stop-out-of-school/

Martin said...

You are on target, but miss one point---people have foregone years of earnings and taken on large debts in order to become overqualified for their occupation. A 4-year degree can easily cost $200K in foregone earnings, and school expenses, even at an in-state public institution, and $100K more at a private school.

Those commenters who talk about the other benefits of education are for the most part blowing it out their hindquarters. There are plenty of ways to pursue such benefits without that huge financial cost, and it's highly arguable whether 4-6 years exposure to what passes for humanities or liberal arts these days is of any benefit.

The game is to keep the money flowing to the schools so they can continue to pay ridiculous salaries to administrators and tenured faculty. Any benefit to the students is incidental. Previously, one could have argued that the banks making student loans and Sallie Mae were also beneficiaries, but the health care bill pretty much knocked the banks out of the business.

turtle said...

It sure would be interesting to know which degrees were the least "employable".

My top two guesses are:

Art History
Fine Art

My (unemployed) wife's choices.

Karl Keller said...

Two things. First, is underemployment a fixed and immutable state for these kids? For example, will the cable installer do that for his whole life? Or will he move into a supervisory position later and perhaps advance in the company or move to another company in a more advance position? Or will he start his own business setting up home theaters? Remember employment is -- or should be -- dynamic. We have an economy now here there is a lack of employment dynamism.

Second, for the past 25 years, it's been PRESUMPTUOUS to assume that the college grad will move into the world a grey flannel suits and executive management. If people assume that, they are dreaming.

ken in sc said...

When I lived in South Korea, it was quite common to meet a taxi driver or store clerk with a college degree—some even had M.D.s or were engineers. These people could have had much better prospects if they could have left Korea. However, the Korean government made it very difficult for college graduates to leave the country; to go Australia or the US for example. They had to pay back the cost of their education before they could leave. My impression of U.S. College graduates doing low skilled jobs is that they have worthless degrees. Anythings that ends in 'studies' for example.

David said...

One point when comparing unemployment rates of those with college vs. high school as their highest education: it's a very apples-to-oranges comparison.

First of all, youth is a huge predictor of employment, so it really should be employment at age >21 that gets compared. Also, there is a big selection bias, with those with higher grades disproportionaltely choosing college. I suspect that the employment rate for 22 year-olds with good grades from high school is probably not much different from that of new college grads. Also, since they may have 4 years of earnings as a head start compared to 4 years of debt, they could easily come out ahead in terms of prosperity over a lifetime.

Of course, increased earning potential is only one reason to go to college. I think discussions like this are important in giving high school grads a realistic look at what college does and does not add to their future.

RightWingNutter said...

Turtle:

I would add any degree that ends with the word "Studies"

orthodoc said...

"...higher education is not the same thing as vocational training, it is a form of self-improvement."

You could accomplish the same degree of self-improvement by buying and reading a series of great books, or going to the local public library, or going on-line for courses, all of which would cost a fraction of a university education.

Those of us in universities should be very clear with prospective students about what their futures hold, rather than encouraging some nebulous and probably fictitious entry into a state of enlightenment.

As for encouraging science and technology students, the biggest encouragement we could provide would be to demonstrate that a real position exists at the end of training, rather than a seemingly endless series of one-year post-doc positions with minimal security or benefits.

J said...

"It is quite unlikely that the sociology or humanities classes these individuals took in college are making them more proficient at delivering the mail"

True, but that's because those classes don't impart any useful knowledge. A mailman with a sociology degree is not underemployed.

"This is basic empirical evidence that we have produced too many college graduates"

Or it could be that universities get the same price for a humanities degree taught by PhDs who'd otherwise be working at McDonalds and whose salary demands reflect that reality that they get for an engineering or finance degree. Like any orgnaization, they chase profit. We aren't producing too many college grads; we're producing too many grads with useless degrees. I'm not saying humanities departments should be shut down, but a university should not charge as much for a women's studies degree as they charge for an electrical engineering degree.

John Murdoch said...

I don't think this shows that we're producing too many college graduates. I think it more likely shows that you don't understand how the Bureau of Labor Statistics classifies people in job classifications.

Example: Daughter #2 graduated in June with a Bachelor of Fine Arts degree in Acting from the University of Connecticut. She was hired in June for a summer stock production that ran through early August. She's presently working a "day job" at a retail clothing store--while she auditions, develops a video project she's working on (and the Bank of Mom and Dad is underwriting), and plans to move to New York City in February.

To Daughter #2, her friends, and her parents, she's an actress. She's working in retail as a day job--it's not her career. But the Bureau of Labor Statistics regards her as a retail clerk with a fine arts degree.

Similarly, An ex-boyfriend of Daughter #1 (I have many daughters) has a day job at U.P.S.--but his career (and his soul) lies in coaching lacrosse. It's just that today he's getting paid graduate assistant bucks by a Division 3 college--his job at U.P.S. pays the bills.

The numbers that you list may well indicate that there's a healthy number of slackers and degenerates working in low-brow job categories--but I suggest that it also masks a larger number of working-to-catch-a-break musicians, actors, filmmakers, sculptors, writers, coaches, athletes, and entrepreneurs.

Remember that Kurt Warner was stocking shelves at a grocery store while he was playing in the Arena Football League, hoping to get a call from the NFL.

I work for a man who took a job as an electronics tech to pay the bills, while he tinkered with electronics in the spare bedroom of his apartment. Today we have 1800 employees around the world, and the results of his tinkering are on display in the Smithsonian. When he was inventing the electronic dimmer, the Bureau of Labor Statistics had him classified as "skilled labor"--among the low-brow job categories you dismiss.

Xiaoding said...

Well, good luck getting people to quit the college thing. There's a lot of social pressure involved. For one thing, if you don't go to college, people will think your retarded. That's not good.

Perhaps, the answer is, to require good grades, and some kind of test, just to get into a college. But that won't work either.

We need to separate, the notion of going to college, from employment. perhaps, make it illegal, to require credentials for employment, except for technical jobs.

Ultimately, this whole process, is being driven by the elephant in the room: machines are making the labor of humans obsolete. Those graduates are not underemployed at all, it's just society in denial.

The Musket said...

The purpose of a college degree isn't to obtain skills that translate into a job -- although that's what I think it should be. The purpose of a college degree isn't even to 'better' ourselves -- although at least that can be a worthy goal. Propping up the colleges and professors as well as the student load financial sector are mere contributing factors. (You can see this trend trickling down to the k-12 level, too). A significant portion is society's bragging ability "I (or my child) have a degree in ...)" when it should be "I have skills that ..." However, even that pales in comparison to what's really going on in most universities -- indoctrination. Although I knew what to expect, I was shocked when my daughter went off to college this year (heading toward pharmacy). Math and science are fine, but English is another matter altogether.

Glen S. McGhee said...

Just when you think it couldn't get worse, comes this statistic:

"Among 2009 U.S. college graduates, 80 percent moved back home with their parents after graduation, up from 77 percent in 2008, 73 percent in 2007, and 67 percent in 2006."


http://www.collegegrad.com/press/2009_college_graduates_moving_back_home_in_larger_numbers.shtml

Nathan said...

By and large, I think that Democrats favor universal university attendance because so many universities have become glorified political indoctrination camps of the left. Non-technical majors spend most of their time exploring their feelings about politics, gender and society, under the tutelage of unaccountable, agenda-driven academics. Now, engineering and science majors--majors where you have to think critically and learn useful information--are a different story altogether. But increasing enrollment for its own sake is more likely to give the world more social "science" degrees than it is to give us more engineers.

Glen S. McGhee said...

I was stunned by the lucidity of y Xiaoding 's comments about unemployed college youth:

"Ultimately, this whole process, is being driven by the elephant in the room: machines are making the labor of humans obsolete. Those graduates are not underemployed at all, it's just society in denial."

If you follow the Industrial Revolution, and now overseas outsourcing, this guy is right. And the denial is more than just cognitive, it is genetic.

By the time the BLS statistics can do justice to actual degree-occupational pathways, the higher ed sector will have lost its legitimacy. And this wouldn't be the first time: look at what just happened to the financial sector.

doppelganglander said...

Xiaoding said, "For one thing, if you don't go to college, people will think your retarded. That's not good."

Now, even the retarded (sorry, developmentally disabled) can go to college: http://www.wbaltv.com/r/25414212/detail.html

What a colossal waste of resources. Millions of dollars a year in support staff just so mentally disabled young adults can have "new friends, the chance to try out for a school play, brush up on ...computer skills and even take a bowling class with non-disabled students looking to earn a physical education credit." Parents of disabled young adults can't form their own bowling league? Insane.

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john said...

Since the statistics relates to an unknown frame, and is not based on analysis of data of an at least 10 years' span, its conclusions are skewed only to prove the author's point.

There is no doubt in my mind that higher education helps both individual and society in every which way.

Freak times when it has not served its purpose do not prove anything.

Matt Holbert said...

Many good points here. I would agree that most do not attend college in order to get a liberal arts degree. Indeed, that sort of education went away in the 1800's as specialists were needed in order to grow the industrial complex. From a macro perspective, we have to adjust to the fact that due to physical realities, we will not have an expanding economy. It will be contracting. We can either contract ethically and gracefully or go the ugly route.

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Marcia said...

I have two master's degrees but am working at a job that took six months at a community to complete (had to do something to get a job).

We have made "get an education" a mantra to solve job-related problems, and most people believe in it. However, the job market has changed so much with outsourcing and making many jobs obsolete through technology, etc., that degrees are no guarantee.

Getting a technical education is not the complete answer either. If everyone headed to college wanted to go into engineering or nursing or genetics, the programs could not handle the influx. Besides, who is to say that the innovations created in the United States will produce jobs here and not in other countries.

For those who say getting an education is important for its own sake, I don't disagree. It is just that if you have to work two low-paying jobs to survive, you won't have the time to read books or keep up with major you took because you loved it.

rick said...

I had a business degree was running restaurants when the last one closed, so I went back to school and got an engineering degree. Currently fully employed using what I learned.

Each department in the College of Engineering I attended had low-level classes that were called 'weed-out' classes. They were purposely very difficult, designed primarily to get rid of people who weren't serious or were unprepared.

The first semester of these classes was usually in a large lecture hall, the second not so much... They were very effective.

Do liberal arts programs have these?

Dan said...

I'm a doctoral student who teaches sociology at a university. I tell my students that if they're considering majoring in it or anything like it, they should plan on getting at least a Master's, and that they should do internships and all that other stuff. Now, social science is a good and necessary thing to have in a society. I strongly believe that what we study is entirely worth studying. When a tyrannical dictatorship ascends to power, social science is one of the very first things to be suppressed or co-opted. Unfortunately, there's only so many slots to go around. I would actually prefer that only a focused few would deign to pursue a social science degree.

Yero said...

You said "The Bureau of Labor Statistics keeps a superb data base of educational attainment levels by occupation, publishing detailed attainment data for well over 700 professions."

Can I get a link, please?

Xiaoding said...

Perhaps a few rules would make a dent in the problem.

How about, requiring all college students to take calculus 1? Basic terminology in biology, physics, electronics, chemistry? Demonstrate the ability to write a computer program? Deomstate the ability to measure voltage in a circuit?

These would be required for all degrees, no more sociology junk degrees.

Ground ALL degrees in reality, that would make it much harder for "everybody" to get a degree. Oh yes, this would apply to arts degrees as well! Perhaps, an exception for painting...finger painting.

DentonRealEstate.com said...

Xiaoding said... "For one thing, if you don't go to college, people will think your retarded."

Am I the only one who found that humorous? Since he has a non-English name I'm happy to cut him some slack. :-P

Points are well taken though. I think people really need to differentiate between education for self improvement and education for employability. I wouldn't pay squat for the former since most of that is obtainable for free in books and such. For the latter, you need to make sure that employment/income sought has a favorable ratio with the time/money spent to get it.

The bottom line is this: if you want people to give you money because of what you know, you need to have knowledge and skills worth paying for. The fact that you have a piece of paper from some school is of little value to an employer.

Tantor said...

Machines are not replacing humans but rather providing more jobs for humans to do. The Industrial Revolution, which is propelled by machine labor, has produced billions of jobs which have resulted in the biggest population boom in human history. When a successful machine is invented, like the power loom, jobs blossom using it because it's cheaper than manual labor to produce things. It also spawns all manner of derivative industries.

Steve White said...

Duncan Bayne: ... education is not the same thing as vocational training, it is a form of self-improvement.

It certainly is, and that is one of the larger problems of our current educational system: it conflates the two. We have taken to require a college degree to qualify for work that does not require a college degree. There are plenty of reasons for that, but we could remember that vocational training and education are different.

However (the infamous 'however'!), when a young person goes to college in order to improve her/himself for future employment, said young person wants what is mostly vocational training. We hope to get some education into her/him, but in the end, if the young person is unemployed and unemployable, we haven't done her/him any favors.

This bad result is magnified if that young person has borrowed 50, 100, or 200 thousand dollars to finance that 'education'.

Therefore, we need to clarify the mission of colleges: that means ensuring that students see what parts of a college education are vocational and what parts are self-improvement. The for-profits such as Phoenix and DeVry understand this very well; they've stripped off almost all of the latter in favor of the former. The local junior colleges also understand.

A young person who wants to study fine art, gender studies, or philosophy for the sake of self-improvement and knowledge should do so. That young person should be told, explicitly, that he/she will need to pay the rent (and the educational loans) someday, and that their college degree in the afore-mentioned subjects won't get it done.