Free Markets, Free People


College grads finding job market “humbling”

In line with the recent posts here on the worth of college education (and Bryan’s post on a possible loan bubble) it seems that the job market is also making a statement on college:

Now evidence is emerging that the damage wrought by the sour economy is more widespread than just a few careers led astray or postponed. Even for college graduates — the people who were most protected from the slings and arrows of recession — the outlook is rather bleak.

Employment rates for new college graduates have fallen sharply in the last two years, as have starting salaries for those who can find work. What’s more, only half of the jobs landed by these new graduates even require a college degree, reviving debates about whether higher education is “worth it” after all.

Of course in any economic downturn, especially in one which unemployment is high, this sort of thing is going to happen.  According to the NY Times story, 22.4% of recent graduates are not working.   22% are not working in jobs that require a college degree.  And, of course, of the 55.6% who are working in jobs requiring a degree, many are not working in their degree area.  It also appears that the median salary has dropped significantly during the recession – after all, it’s a buyer’s market:

The median starting salary for students graduating from four-year colleges in 2009 and 2010 was $27,000, down from $30,000 for those who entered the work force in 2006 to 2008, according to a study released on Wednesday by the John J. Heldrich Center for Workforce Development at Rutgers University. That is a decline of 10 percent, even before taking inflation into account.

That’s a significant drop and again, it makes the argument that going to work for 4 years instead of college may have two benefits:  1) no college loan debt and 2) 4 year work history which would most likely see a salary or earnings well above the median starting salary for college students.  And as might be expected, it is those college students who are graduates from liberal arts programs who are suffering most.

The choice of major is quite important. Certain majors had better luck finding a job that required a college degree, according to an analysis by Andrew M. Sum, an economist at Northeastern University, of 2009 Labor Department data for college graduates under 25.

Young graduates who majored in education and teaching or engineering were most likely to find a job requiring a college degree, while area studies majors — those who majored in Latin American studies, for example — and humanities majors were least likely to do so. Among all recent education graduates, 71.1 percent were in jobs that required a college degree; of all area studies majors, the share was 44.7 percent.

So what sort of jobs are those who are degreed but not working in a job requiring a degree holding?

An analysis by The New York Times of Labor Department data about college graduates aged 25 to 34 found that the number of these workers employed in food service, restaurants and bars had risen 17 percent in 2009 from 2008, though the sample size was small. There were similar or bigger employment increases at gas stations and fuel dealers, food and alcohol stores, and taxi and limousine services.

Of course that has a ripple effect in which less-educated workers may be displaced.

“The less schooling you had, the more likely you were to get thrown out of the labor market altogether,” said Mr. Sum, noting that unemployment rates for high school graduates and dropouts are always much higher than those for college graduates. “There is complete displacement all the way down.”

Obviously the lesson here is education is still valuable, the question however is “how valuable”?  Valuable enough to commit to the tremendous debt a college degree can bring?  It is that sort of ROI that young people must begin making – especially those considering liberal arts programs.  Assuming a desire by most who attend college to use their credentials to get a high paying job and secure a better future than foregoing such a program of study has to be under scrutiny by those in such a situation.

Opting to begin work out of high school vs. pursuing a college degree may become a real possibility.  And naturally that will have another ripple effect.  Colleges and universities will see decreased attendance which will in turn mean less revenue and possibly spur competition among them to attract students.

I actually see that as a beneficial effect, especially given the cost of higher education today, that may eventually make the ROI work somewhat better for potential college students.  It is obvious the cost of higher education has risen much higher than any inflation rate.   That’s a bubble that needs to be popped and popped rather quickly.  Dropping enrollment because of a perception of not receiving the value for what is paid may be the motivator for higher education to cut their prices or suffer the consequences.

 

education

 

~McQ

Twitter: @McQandO

  • Facebook
  • Twitter
  • LinkedIn
  • Tumblr
  • Digg
  • Reddit
  • email
  • Print
  • Google Bookmarks

41 Responses to College grads finding job market “humbling”

  • Anecdotal:  My daughter is a mid-level manager for one of the big-box chains.  She recently interviewed and hired a guy with a degree in marketing – as a shopping cart pusher.  The guy got back from an internship in China (he’s fluent now) but couldn’t find a job.  Now his “foot is in the door” and he’s hoping to work his way up to sales clerk.  That’s gotta be one painful eye-opener. 

  • Another anecdote: My “barber” has a B.S. degree in public relations. She is going back to get a nursing degree.

  • Young graduates who majored in education and teaching or engineering were most likely to find a job requiring a college degree…

    Boy, talk about bracketing…!!!
    From the sublime to the ridiculous, the heights to the dregs!
    There is something PROFOUNDLY wrong with that picture…

    • And as Thomas Sowell pointed out in  one of his books many years ago, those entering teachers schools come overwhelming ly (80%+/-) from the BOTTOM QUARTILE of the undergrad classes. That was in the mid-1980′s.
      One can only imagine what it’s like now.
      Ad those in the bottom of their Business School classes overwhelmingly go into “Marketing”. And they all bitch and moan about those (mostly Orientals) in engineering and hard sciences.
      The problem isn’t the “distribution of income”, it’s the incredible divergence in PRODUCTION/PRODUCTIVITY of those graduates down the road.

  • Hey, they’re the bunch that got TAO elected, as well as the Dems in 2006, so tough s^&t!

  • Change you can believe in
    It’s like barf me out… Gag me with a spoon!

    • Change they can believe in – what they get back from the $10.00′s they handed the nice lady at McDonalds.

      • NO CHANGE: What they get back from the $60 they give the attendant at the gas station.

  • O/T, but Barackah just screwed the pooch with the Jews…I sure hope.

    • Apparently, the Secret Service must have tuned into FoxNews for “better blather”

    • Summary of Cario Speech II …

      … future state to be based on the borders that existed before the 1967 Middle East war …

      This is a non-starter.

    • “screwed the pooch with the Jews”
      If you mean the American Jews?  No, they’ll continue to vote for the the ‘promise’, and pretending it’s not a crap sandwich that keeps getting delivered.

       

  • Mr. Pick was very succinct when he wrote:

    As much as we need greater competition in postsecondary education, and better alternatives for young adults to build and signal their value, no student loan “bubble” will do the job.  It isn’t a bubble if the air has nowhere to escape.


    Because the fact is that some have no other choice.
    Does anyone really believe that those leaving high school will have any chance at all at landing a decent paying job?
    To those choosing not to go to college, I would say to them “good luck, Mr. Barista… Mr. Waiter… Mr. Stock Boy… If you’re lucky enough to find those jobs.”
    “It isn’t a bubble if the air has nowhere to escape.”  Is exactly right.

    And to those with anecdotes about college grads pushing carts and the like, those people do what they must.  However, it is most unlikely that they will be pushing carts forever.  The economy will improve and jobs in their field will open up, and they’ll be older, wiser, and more prepared to pursue their careers.
    Besides, I have anecdotes as well.  Like the one left on Bryan’s thread…
    A friend/ex-employee of mine is going to school to become a paramedic – a two year degree at a community college.  He tells me the place is littered with certified ex-plumbers, ex-welders, ex-electricians, all of whom in limbo after being laid off, or still working for $10/hr as an “apprentice.”  I’d say not to listen to the fool who tells a young person to go to vo-tech school to become a welder – because there are twenty guys, each with twenty years experience, waiting for the same job you hope to have after 8 months of school at City Vo-Tech.
    Cheers.

    • “to those choosing not to go to college, I would say to them “good luck, Mr. Barista… Mr. Waiter… Mr. Stock Boy… If you’re lucky enough to find those jobs.””

      disagree – I have 2 anecdotal sons I can point to with good jobs that are a better than Mr. Barista etc and several anecdotal neighbors kids on the gone to college – not working in their ‘field’ I can point to (meet Mr. Barista, Mr, Stock Boy, Mr. Waiter…)

      Yeah, I guess I might not be ‘average’, but I have to wonder.  What it comes back to Pogue, is these people often spent in excess of $100k to educate their kids (or loans to that effect).   Over the long haul, I see no particular reason to think they’re all going to get employment in their ‘fields’, and also consider that after 5 years of not working in it, they may NOT get hired in it when competing against the next graduating classes in their field.  In the meantime, they’ve incurred a rather hefty investment to become a Barista (and they’re having to pay it back, or somehow getting out from under it).
      How many of these kids, with a $100k loan, could have started a business that might be thriving?  This covers your ‘apprentice’ plumbers and/or laid off whathaveyou’s – how many of those guys could have made it with $100k behind them and wouldn’t be looking for another job?  We’re talking ROI here.

       

      • How many of these kids, with a $100k loan, could have started a business that might be thriving?

        According to most, 50% after five years.
        And how many kids that earn a college degree still bus tables after five years?  Honestly, I don’t have the stats on that, but I’m willing to bet the farm that it is far less than 50%.

        And btw, how the hell do you start up a small business with only $100k???  Most likely, your first six months will eat up $100k.
        It’s not as easy as it sounds.  It’s one thing to take over the family business, but quite another to start a new venture.  Just sayin’.

        Cheers.

        • Poque, what in the world are you blathering about???
          I’ve started businesses with very close to NOTHING.  One does not need “restaurant-opening money” to start a business.

          • I’ve started businesses with very close to NOTHING.

            Oh, please explain.  You’ve wrote before that you are an attorney with modest means.  So what happened to these small businesses that you’ve started with “close to nothing”?
            Are you King Midas with the golden touch?  Do these businesses that you’ve started still exist?  Did you sell them?  Do you still run them?

            Please share with us the secret to starting a successful business with “close to nothing.”
            Wait a minute?  Are that crazy guy with the weird suit on those late night infomercials claiming to have the secret to small business success???
            I would totally believe that.

          • A contractor needs close to nothing to get going, stupid.
            Beyond that, phuc you.

          • A plumber – $100k?  Schooling, a truck, tools, license, a phone, and advertising?
            HVAC?  Same?
            Fence company?  Landscaper?
            Hell, these are ALL jobs held down by some of our local ‘undocumented’ workers, not exactly guys with a lot of financial backing.  Any job where you don’t HAVE to have real estate under your butt to do your work.

            It’s theory to me Pogue, it’s left overs from a college degree heavily tilted towards business management.  I don’t know myself, I can only surmise not having done any professional plumbing, carpentry, etc (plenty of that, but unpaid :D ).   I guarantee there are costs I’m not accounting for in there, but $100k is a lot of cash.

            But I see a lot of people with only a truck and trailer and tools to their name bouncing around mowing lawns, or doing service type labors that appear to be into it for less than $100k.   The fact that we live in a right to work state also changes that equation considerably I’m sure.
            Now, will any of them ever make $300k a year?  heh, how many college graduates ever make $300k a year?

            Now, a full service couple of bays garage, a restaurant, etc, yeah, I can see where $100k will and more will be needed to get a start on.

             

          • Beyond that, phuc you.

            That’s about what I expected from Ragspierre, Esquire  Someone who has over and over and over again told us that he is one with a law degree.  And we’re just now learning that he is also a small business genius who has started many businesses with next to nothing.  And what are these small businesses?  “Phuc you!”  Sorry, nevermind.
            I would love to read some of your briefs.  I imagine them to be something like, “you’re stupid.  And phuc you!!”

          • You guys speak Vietnamese?  Amazing.

          • Looker, I see your point.
            As I myself started with merely a few thousand dollars.  But I quickly learned that in order to succeed, you must expand exponentially.  And that quickly results in tens of thousands of dollars of debt.  And at an interest rate far higher than student loans.  And to that, unlike student loans, the creditors could give a rats ass if you had a bad month – they expect to be paid.

            You can’t seriously ask countless high school grads to expect to start a landscaping businesses, or plumbing, or anything of the like.  First of all, they NO IDEA how to do it.  It takes years of experience just to learn the trade, then you need the know-with-all to handle the business end of it.

            “I want to be a tradesman.  Give me money to start my own business.”  Sorry laddie, it doesn’t work that way.

          • I understand–
            1. logical progression, and
            2. economy
            Hence, Poque, I can both see where our interrogatory is headed AND that answering all your BULLSHIT would be a waste of my time AND an exposition of my personal business…hence….
            PHUC you.
            See?

          • “You can’t seriously ask countless high school grads to expect to start a landscaping businesses, or plumbing, or anything of the like.  First of all, they NO IDEA how to do it.  It takes years of experience just to learn the trade, then you need the know-with-all to handle the business end of it.

            “I want to be a tradesman.  Give me money to start my own business.”  Sorry laddie, it doesn’t work that way.”

            No no, I understand that – In my mind right now,  I’m sitting across the desk from the 18 year old who wants to start a landscaping business and has come into my office for a…pick a number….$70K loan – he better be able to say “can I dad?  Huh? huh?” or I’m going to be thinking at him in Vietnamese, even if I don’t say it out loud.

            Ah, but see, dad and mom ARE willing to go into debt for $100k, these kids aren’t going directly to the bank for that money, they’re going to mom and dad (this I know from personal experience).  Let’s face it, in most cases the bank is betting on mom and dad, not Jr.   Sure, the kid appears to be on the hook, but we know who’s really backing that loan, and who knows what they’re using to do it?  $100k is a lot to pay to get your kid out of the house only to have him show up again after 4 years.

            Succeed, ah, a tricky word – you can clear your living expenses in a year, and consider yourself successful, or you can ‘want it all’ and have to clear a $100k because, “hey, I got plans”.  A societal thing I guess, that we must always be on a rising line income wise – unrealistic, and totally unlikely, but there it is.  I belittle neither approach, as long as the person taking it doesn’t bitch about taking it.

            Asking countless high school grads – shoot Pogue, at 54 I still don’t know what I want to do when I grow up.  More kids than not go off to that $100k education with less direction than that and a vague notion that ‘college’ will mean a secure job and living for the rest of their lives.  Again, as I mentioned below, thinking they’ve been guaranteed success and told that to do otherwise will doom them to a life of quiet desperation.  That isn’t right, on several levels.

          • Ah, and if I don’t get back to it – Slainte – have one of them fruity beers, we’ll drive Bruce crazy.

          • Hence, Poque, I can both see where our interrogatory is headed AND that answering all your BULLSHIT would be a waste of my time AND an exposition of my personal business…hence….
            PHUC you.


            Shorter Ragspierre:
            Starting a business with next to nothing is easy.  Just follow my secret recipe that will, for fear of making a fool out of myself, remain secret.

            See?

            Very clearly.

          • ‘K, asphole, just to screw you to the wall (I LOVE it when you punch the Tar Baby!!!)…
            Following the Oil BUST, I was left without my oil field trucking company (drilling rig moving), so….
            WITH FLUCKING NOTHING, except the 2/3 advance from my customer…
            I started a roofing company.  I bought a ladder, a hatchet, and the materials.
            I printed out door-hangers, and walked the neighborhoodssssssss.
            See?  You stupid, lying phuc.

        • Hello,
          I’ve started a photography business with only a few K $ but a caveat – I am still working at night until the photography is generating more income. It’s rough but it’s what I want to do so I can be my own boss.

          I’m with you, though, on how many jobs are ready for the kids right out of HS that, as you noted below, pay a decent wage. The jobs are simply not there.

    • Silly, Poque.  Oil field hands make pretty good money.  The Wal-Mart fleet drivers make about $60k/year.
      LOTS of people without a degree do very well…better than some lawyers I know.  I have a hair-dresser daughter that makes about the same as her high-paid nurse sister.  Better than another daughter with a Masters in counseling.

      • Silly, Poque.  Oil field hands make pretty good money.  The Wal-Mart fleet drivers make about $60k/year.

        Yeah, they’re just handing those jobs out to high school grads on graduation day, right?  And there isn’t a queue of 20 or more people with far more experience waiting for those jobs to open up ahead of these 18yr old go-getters, right?
        After all, what industrial employer would want a 40yr old hand with 20+yrs experience with responsibilities begging for long-term work over an 18yr old kid with no experience who could piss off at any time???

        Rags?  Do you even know what it is like working on a rig?  And if so, did you ever meet an 18yr old kid that didn’t have a relative that got them the job?
        You simply just don’t know what you’re talking about.

        • And you are an idiot, Poque.
          I’ve done about everything in the oil field you can do, outside of the more technical jobs like being a mud-logger.
          I’ve known guys who broke out in the oil field in their mid-teens.
          I also know guys who went to work in a refinery out of high-school, and made fine money all their lives.
          My optician was telling me that she regretted not going into beautician school like her cousin did.  They make about the same money, and becoming an optician is a VERY rigorous…and EXPENSIVE…course of study

          • “outside of the more technical jobs like being a mud-logger.”

            If my wife’s family can do it, it ain’t that technical and doesn’t require much experience or capital.   

        • “And there isn’t a queue of 20 or more people with far more experience waiting for those jobs to open up ahead of these 18yr old go-getters, right?”

          That can’t be the basis of the decision – there may be jobs going empty in Lubbock, that could be filled by your queue of 20 guys in Houston….if only they were in Lubbock.  So the kid who’s dad knows the guy who’s looking for a welder in Lubbock gets to work, and the 20 guys in Houston with the 20 years experience go and do something else.  Point is, if the kid in Lubbock can make a decent living off welding, should he screw welding and go to college for $100k to become a marketing analyst?

          We look at it with statistics from a state wide or nation wide level, but each decision about what to do and how to invest capital (the $100k) is made at an individual local level.  State wide, we might feel okay about telling the average kid, in random town Texas, NOT to go into welding because we KNOW, based on stats from Houston and Dallas that there’s always a queue of 20 guys in THOSE cities waiting for the work.  But where THAT kid is, there may be work.  Yeah, and your connections in life help, which works exactly the same for the kid who welds, as the kid who graduates from Columbia.

          Shoot man, if I KNEW the answers, I’d be selling the information, not theorizing on the internet, but it shouldn’t be that hard to see that a $100k education these days is not a guarantee, and never has been, but these kids and their parents, have been sold that it is.  More to the point, they’ve been sold that they will be hopeless Barista, Waiter, Stock Clerk FAILURES if they DON’T GO TO COLLEGE, and that, is just patently false.
           

  • Young graduates who majored in education and teaching or engineering were most likely to find a job requiring a college degree, while area studies majors — those who majored in Latin American studies, for example — and humanities majors were least likely to do so.

    So… people who didn’t learn to really do anything in college have trouble finding work???  Knock me over with a feather!

    / sarc

    This leads to the issue of “working in your field”.  For some graduates, it’s obvious where they will look for a job: chemists look in the chemical or pharmaceutical industries, engineers look in manufacturing or construction, education majors look in the school systems, etc.  But what about people who majored in “history of consciousness” or “18th Century Nepalese Literature”?

    I am reminded of a chat I had years ago with one of my chemistry professors.  I complained that my university was not really preparing me for a career; too much theory and not enough practical training.  He replied (rather tartly) that “college is not a trade school.”

    Perhaps that was so decades ago, when a college education was less specialized but more rigorous and only the best and brightest tended to get one, but in our times, it damned well IS a “trade school”; the person who goes to college without majoring in a field that will pay his bills when he graduates is a fool who deserves to be waiting tables for the rest of his life.

  • In an era when the population is getting older, there in still massive hiring for “credentialed” teachers.
    I don’t have exact numbers, but the high school I graduated from in 1971 had a student body of 1045 and 81 teachers and administrators (according to my HS Year Book).
    My daughter’s HS had 1220 students and 231 teachers, administrators, counselors, etc. in 2004.
    That also explains where so much of the Stimulus Money© went to.

    • Yes, but our children are sooooo much better educated and adjusted and wise thanks to more teachers, counselors, and administrators!

      / sarc

  • I might add that, for example, my Math teacher (Mr. Albert Humke) taught five classes a day, Algebra 1, Algebra 2, Calculus 1 & 2, and Trig.
    How many teachers now teach two and how many teach three? Few! Very few!

  • Guys – for those stating ‘how many kids out of high school can find jobs…etc’

    So, am I to understand the working alternative is to invest $100k in them and ship them off to college on exactly the same bet as them getting out of high school and finding an alternative to college?
    If ‘the jobs aren’t there’ for them to pursue as an alternative to college what makes sending them off to college any more a certainty that the jobs WILL be there?

    Given that my (pulled out of my netherregions) investment amount was $100k for their college education – are we seriously arguing that with something approaching that amount as an investment they just can’t do something else besides go to college?  Seriously?

    That’s the whole point here, there are no guarantees.  If you’re arguing that ONLY college is the answer then I submit we end up in the situation the post is referring too.  How is that sentiment any different than telling them if they don’t go to college they’ll be losers for the rest of their lives?   You all know, that’s just patently not the truth.
    In fact, a kid who goes into plumbing, or HVAC or even landscaping is a hell of a lot more likely to find gainful employment and make something of himself than a guy who went to college for 6 years, spent over $100k and walked out with his “History of Consciousness” Masters in hand.

    Show of hands – how many of you have hired plumbers, mechanics, HVAC guys, landscapers, roofers, carpenters, welders to do work for you on a personal level, not as part of your business.  Now, how many have felt a need, while looking at your house to hire “history of consciousness’ grads?  When your car stopped behaving, did you consider going to see a   Liberal arts majors?  Renaissance Lit majors?
    When was the last time you sent your car to Mumbai for repair?  Your AC unit?  Your sink or toilet?

    Sure it’s not easy work, it won’t necessarily make you a $million, but you can make a living, and isn’t THAT what we’re talking about?
     

  • Mike Rowe of “Dirty Jobs” talks about what holds civilization together.