Free Markets, Free People


Economic reality welcomes new college grads

And it isn’t what they expected or hoped it would be:

A weak labor market already has left half of young college graduates either jobless or underemployed in positions that don’t fully use their skills and knowledge.

Young adults with bachelor’s degrees are increasingly scraping by in lower-wage jobs — waiter or waitress, bartender, retail clerk or receptionist, for example — and that’s confounding their hopes a degree would pay off despite higher tuition and mounting student loans.

An analysis of government data conducted for The Associated Press lays bare the highly uneven prospects for holders of bachelor’s degrees.

We continue to hear that we’re in a recovery, that we’re seeing better times, that all is now well.

Of course, it’s not.  In fact, as we mentioned in the podcast last night, we’re not seeing anywhere near the growth necessary to shake this recession.  Instead, we’ve found and are bouncing along the bottom (or at least what is the bottom for now – believe it or not, it could again get worse).

Unemployment numbers for the last two months have “unexpectedly” worse.  And while the official rate is 8.2%, most realize the real unemployment rate is much higher and in double digits.

That is the world today’s college grads are facing.  It is a buyers market, for those that are actually hiring college grads and so they are able to select among the best.  Guess what majors are faring best?

While there’s strong demand in science, education and health fields, arts and humanities flounder.

Majors with immediate applicability in still growing fields of course.  Meanwhile, there’s not much demand for the softer and less applicable fields.   And even in the majors where demand is still high, entry level jobs are of a lower type:

Median wages for those with bachelor’s degrees are down from 2000, hit by technological changes that are eliminating midlevel jobs such as bank tellers. Most future job openings are projected to be in lower-skilled positions such as home health aides, who can provide personalized attention as the U.S. population ages.

This is one of those teachable moments.  A sheepskin is no longer a guarantee to a high paying job.  And that’s certainly true of those who indulge themselves in a humanities or art degree, etc. 

College graduates who majored in zoology, anthropology, philosophy, art history and humanities were among the least likely to find jobs appropriate to their education level; those with nursing, teaching, accounting or computer science degrees were among the most likely.

While perhaps the brightest and best in those areas will indeed find good paying jobs coming out of the chute, the vast majority are going to be taking jobs, if they can find them, well outside their major field of study.

By the way, I use the term “indulge” above purposefully.  It would be nice to indulge yourself in something you might enjoy in college and major in it.  But then don’t whine when you find out that all of the companies you feel should have the benefit of your august presence aren’t as excited about your degree in gender studies as you are.

That gets down to the purpose of college to each person.  Is it a means of achieving a job and a life style to which one aspires and a willingness to do what is necessary to accomplish that?  Or is it a place one indulges themselves giving little or no thought to the reality that awaits them at graduation?

What we are seeing is the market for college grads making a very definitive statement.  It is sending signals.  It is telling everyone what type of degrees are being sought and which aren’t.  And because of the tightness of the market, it is making decisions on merit, with the brightest and best capturing jobs and the also ran’s waiting tables.

"I don’t even know what I’m looking for," says Michael Bledsoe, who described months of fruitless job searches as he served customers at a Seattle coffeehouse. The 23-year-old graduated in 2010 with a creative writing degree.

Imagine that … creative writing degree.  Wonderful stuff, but not to the market for those with college degrees.  One would think that a person pursuing that sort of degree would have probably researched that and have a plan which might not include someone else hiring them first (i.e. selling their work on a freelance basis, etc. and knowing how to do that).

Had Mr. Bldsoe had a degree in physics or accounting or engineering, he’d stand a much better chance of being employed in his field of study.  Then he could indulge himself in his creative writing passion.  In fact, it would likely give him the means to do that.

Instead … “you want a tall or a grande?”

I still haven’t yet figured out why supposedly bright people can’t figure that little thing out.  Markets are talking.  Markets are sending signals.  When you choose something as your major that these markets have no interest in, what do you suppose is going to happen unless you have a plan to go out on your own immediately?

They’re not going to hire you just because you feel your major is important.  You’re going to hire someone if they feel the major is important and  you have demonstrated competence in that field at a level they require.

This is the reality that, for the first time, many recent college grads are coming to grips with.

One thing this recession may finally do is drive home the idea that indulging yourself is a useless degree is not very bright or productive.

Want to study creative writing?  Fine.  They have minors as well in colleges.  Make it your minor.  But for heaven sake, take a clue and look at what is being demanded out there before declaring a major.  Certainly it may not be your passion, but then unless you want to spend your days immediately after college waiting tables or hoping for a labor sellers market, where jobs are plentiful, you had better commit to a useful major.

I know, I know, that supply and demand thingy again.  Gender studies majors aren’t into “markets” and “supply and demand” stuff. What’s wrong with me?  They have a college degree, the world should be beating a pathway to their door, no?

No.

Welcome to reality … and reality includes the immutable laws of economics whether one likes them or not.  And right now, those with useless degrees find themselves on the wrong side of the demand curve.

Don’t like economics?

Then content yourself with making frappes.

Otherwise, it’s time to wise up, use that superior brain for what it was designed and “indulge” yourself in something the job market finds useful and valuable.  Refusal to do that means a guaranteed rough transition into the real world, especially now.

~McQ

Twitter: @McQandO

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

30 Responses to Economic reality welcomes new college grads

  • “Had Mr. Bldsoe had a degree in physics or accounting or engineering, he’d stand a much better chance of being employed in his field of study.” That is broadly true, but for a degree like physics as opposed to a more ‘vocational’ education like accounting or engineering, there is still for most grads a high chance of not being employed in their “field”. But the key is if you do physics, or similar, you learn a bunch of widely applicable things and often have up-skilled in related areas such as mathematics, programming, maybe a bit of economics etc and can convince an employer to take you on for some job you will like. The key is to be able to convince an employer, which requires a little creativity that is ironically lacking in creative writing students, it seems.

    • @DocD You can teach yourself “creative writing” rather nicely, too. Just on the internet.

      • @Ragspierre Yeah, look at Erb, one of the greatest future fantasy writers of the last year.

  • http://www.pjtv.com/?cmd=mpg&mpid=105&load=6856 Not everyone is capable of actual college work. We still need plumber, sheet-metal mechanics, nurses, etc. If I were a kid, I’d look into learning directional drilling technology.

    • @Ragspierre Is that you, Rick ?

    • my advice to any young person who just wants to work here where I live is go into AC/Heating maintainace. Those guys work solid as many hours they want from about May to November. @Ragspierre

      • @kyle8 Yeah, but they’re effectively being told in their high schools they’re losers and will end up living under railroad bridges. I graduated 3 from high school in the last 7 years, and everyone of them will tell you the emphasis from middle school on (at least here in Texas) is to feed the college puppy mill industry, and the idea you can make a damn good living as anything but a graduate with a degree isn’t encouraged.

      • @kyle8 AC, electrician, plumber, mechanic. The world is changing every day, the IT guys I work with are constantly fighting not to be left behind, But no matter what the tech is, people need electricity, people need running water, and the internal combustion engine isn’t going anywhere for awhile. And best of all? Can’t outsource those jobs,

        • @The Shark Yeah, cost of flights from Mumbai, Krakhov and Manila make bringing the mechanic, electrician and plumber into town more than once a month almost prohibitive. You can still get phone help, if you wait for level three support we’ll hook you up with a red neck plumber from Wichita who’ll talk you through shutting off the water till you can ship the water heater back to China for repair.

  • My daughter’s intern company is trying to get her to start before she graduates as a ChemE.

  • There is absolutely nothing wrong with getting a degree in the arts or humanities if that is your passion and you value the education in and of itself (that pretty much describes me). But DO NOT TAKE OUT A LOAN to do so!!!!

    That is just stupid. Instead young people who want to do that should do as I did, work a little, go to school a little, work some more, get valuable experience. Sure it took me six years to get a degree but I was employable right after college, and I got out during a recession also.

    • @kyle8 If you’re doing something for the love of it and realize the potential costs of doing it, you get my support. The whiners who spent $30,000 a year majoring in Transgender Studies of Theoretical Subtropical Aquatic Marmots and want ME to pony up the cash to pay off their loans, not so much.

    • Amen to this. When I was in college (back, uhm, let’s just go with ‘awhile ago’), I considered getting an English degree with a ‘focus’ on creative writing. But it didn’t take much thinking to figure out that even an English degree wasn’t going to get me anywhere unless I wanted to teach *shudder*. So I dropped out, got a good job, and write in my spare time with a roof over my head and food in the cupboard. The starving-artist-in-a-garret thing is highly overrated. @kyle8

    • @kyle8 The real shame is that there are few benchmarks for high school students to look at. They are pushed to go into fields that they like or are comfortable in. I remember looking to see who got paid big, then determining if I could do (maybe even like) any of those jobs.

    • @kyle8 The other problem that I see is that many of the students starting in college are just too immature. They don’t know the financial ‘facts of life’ like that they will be saddled with a huge debt and that you can’t drink or get high and expect to have the grades to graduate. Many then transfer into degree programs that ultimately don’t pay well (because they’re easy and so many can do them).

    • @kyle8 I remember looking at college as a “right of passage.” I was to work and slave for 4 years so I could have a real career on the other side. Getting drunk and stoned wasn’t going to get me through, so I had none of it. Frankly, I didn’t necessarily get the best grades, but I made sure that I learned everything I could that would help me when I started working. That meant staying away form the “baby” courses that may get you a great grade but impart no real practical knowledge. It meant looking for where the market was going and looking for new special topics courses that got you in a better position for your career.

      • @Neo_ We knew the joke courses we could take if we’d swamped ourselves with hard ones, there was always one (actually, “Speech” was one, and oddly enough turned out to be far more useful than we ever imagined..smart ass kids) to fill out your block. You know, Tuesday/Thursday at 9:00 so you could be out by 12:00 and have the afternoon off!

  • That’s because so many of them have been indulged for their entire lives. I wanted to be a history major….I majored in comp sci/business. I WANTED to write game programs, I ended up writing business applications for wire funds, telephone billing and handlers for ATM/POS machines. Mainly because I knew there was more market for things I could do, than things I WANTED to do. I don’t have much mercy on people who indulge themselves and think the rest of us must indulge them too.

  • One of the missing ingredients I see in this discussion is the need for people general and flexible enough to adapt to wave after wave of change in the economy.==========================================
    In college, I made a decision to be a generalist, and it has served me reasonably well. Most of the jobs I’ve held didn’t exist when I was in college. I’ve changed directions more times that I can keep count – another major one just four years ago, in fact. But demand for my services has stayed high. ========================================
    I majored in math, and took physics, chemistry, and biology. The biology has been very useful – lots of things are explained by evolutionary biology, even concepts in economics and business. I took psychology (mostly BS), political science (all BS), and economics (some BS, but a lot of good stuff too). Looking at all of them convinced me that psychology, sociology, economics, and political science are all just slight variations on the same subject: human behavior. Looking at just one of these, and trying to cast the world in that mold, is narrow, and usually descends to the level of button sorting at best. Those subjects just are not very useful unless they are embedded in a broader, richer matrix. ==============================================
    My problem with majoring in transgender heuristic cultural normative studies is that, despite the attempt to make it sound broad, it’s actually very, very narrow. There’s no science in those stupid “studies” majors, just opinion and indoctrination. There are no testable theories.=============================================
    What those kids are all learning isn’t really the subject named in their major. They’re studying leftist post-modernism, and mostly doing it in a cocoon that seals out any broad perspective on the world or any connection to reality beyond the college campus. They come out of college less useful to society than when they went in, because of their extreme “it ain’t what you don’t know, it’s what you know that ain’t so” problem, and their pampered, entitlement mindset.===================================================================
    This won’t go on, because it will inevitably put a drain on society that’s unsustainable, and nonsensical garbage with no bearing on reality will be high on the list to jettison when times get really tough. (They’re not that tough now, by the way, not by historical measures. I’m talking times when middle class people worry at times where their next meal is coming from, and poor people worry about that all the time.)

    • @Billy Hollis Billy, I totally agree. There’s nothing wrong with being a generalist, and basically if you get a smart kid out of college who can think, analyze, and communicate well, I think at least in consulting there’s a good home for that kid. Even your gender studies majors can be marketable if they know how to do those 3 things, and most importantly, CONVEY the applicability of their skills to the job at hand. When I was interviewing, I used organizing the third day of sorority rush to show I had leadership and communication and organizational skills (seriously, *you* get 45 20 year old women to agree on cocktail napkin colors!). One can even have one of these “softer” majors and still get a job – so long as they’re flexible.

  • Not to go off on a rant here but a degree in /creative writing/?! Seriously?! This is not something like nuclear physics or brain surgery or even archaeology that you need a lot of knowledge and training to do. Competent spelling, punctuation, and grammar, plus maybe a couple of courses in narrative structure and device, and there you are. Does Rowling have a ‘creative writing’ degree? King? Grisham? Clancy? Ye freaking gods kids are stupid these days.

  • The real unemployment rate is up around 14.5% which is double what the Fed govt is reporting. But you all knew that. And it’s going to get worse when this new batch of college grads hit the street this summer. http://www.foxbusiness.com/economy/2012/04/06/time-to-focus-on-real-unemployment-rate/

    • @Johnny Jones And THAT’S why we have the important USAID program teaching people in the Philippines to man call centers with US tax dollars, because those unemployed students will need help figuring out how to put off paying their loans.

  • Five (yes, 5) years ago my SIL finished hisstint as a Combat Engineer in Iraq and his bachelors degree in higly regarded Civil Engineering. Now when he goes to apply for jobs it’s all Hispanics who barely speak English.

    • @Sharpshooter Que?

      What’s “all Hispanics who barely speak English”? The people applying? The people hiring?

      (You’re 83% more likely to make an error in spelling or grammar, or to accidentally omit a crucial phrase, when discussing the language skills of others. From the files of statistics I made up.)

  • From further on in the linked article: “Bledsoe, currently making just above minimum wage, says he got financial help from his parents to help pay off student loans. He is now mulling whether to go to graduate school, seeing few other options to advance his career.

    Translation: He’s not just stuck on stupid, he’s thinking about doubling down on it.

    • @Achillea That’s a “wants free ride to continue” sign if I ever saw one. If he has anything on the ball the place where he’s working ought to be seeing potential in him, assuming there’s any to see.