Class of Underemployed: Nearly 50 percent of recent college graduates are working in jobs where no college degree is required.

We don’t send our young into the wilderness for a vision quest as a rite of passage.  There are few things in modern society that signify a transition into adulthood.  Going to college is one of them.  And in debt addicted America, it is no surprise that for many, college debt is the first debt they will take on.  Getting a college education is supposed to give someone a well rounded view of the world and a potential skill set.  Some argue that college is not about vocational training.  That to some degree is true but when students are going into $50,000 or $100,000 of student debt, then what is this modern day life quest really teaching and why is the price tag so incredibly high?  As college graduation season comes into full bloom, many are left with the prospect of having no job lined up.  It is also startling to see how many recent college graduates are working in jobs that really don’t require a college degree (so clearly the vocational piece doesn’t matter here).

The chronically underemployed college graduate

There are over 5,300 colleges and universities across this country from Harvard to beauty schools.  The market is enormous and students now carry $1.3 trillion in debt, the biggest debt sector only behind mortgage debt.

Many recent college graduates are severely underemployed and this is for the lucky group that actually finds work:

underemployed college graduates

“(NY Fed) The underemployment rate is defined as the share of graduates working in jobs that typically do not require a college degree. A job is classified as a college job if 50 percent or more of the people working in that job indicate that at least a bachelor’s degree is necessary; otherwise, the job is classified as a non-college job. Rates are calculated as a twelve-month moving average. College graduates are those aged 22 to 65 with a bachelor’s degree or higher; recent college graduates are those aged 22 to 27 with a bachelor’s degree or higher. All figures exclude those currently enrolled in school. Shaded areas indicate periods designated recessions by the National Bureau of Economic Research.”

Nearly 50 percent of recent college graduates are working in jobs where a college education isn’t typically required.  So that life quest was indeed an expensive one, more so than taking drugs and roaming around in the forest.  And the bills are coming due since student loans normally start being sent to graduates six months after graduation.

In Michigan a strip club has angered residents by posting this:

now hiring

When strip clubs realize that college degrees are ubiquitous and many will struggle to find jobs, we really have to question the price structure of college.  And I would argue that there needs to be some vocational aspect of a college education when students are paying so much to attend. This ties into many larger issues like many younger Americans being unable to afford home purchases because they carry on so much college debt.  86% of Millennials through a Housing Pulse survey said that too much debt was an obstacle to owning a home.  It is also the case that Millennials that did buy in many cases had help from family.

The underemployment rate is troubling because as the cost of a college education soars beyond the typical inflation rate, the yield in the marketplace isn’t very observable.  College tuition is up 145% since 2000:

inflation-since-2000

It should be obvious to anyone that this structure will not last.

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5 Comments on this post

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  1. Diane D said:

    Going to college signifies a transition into adulthood? That is laughable. Even most of today’s college graduates are FAR from adulthood.

    May 29th, 2016 at 7:53 am
  2. Harrold Waggoner said:

    I agree with Diane (above). Before i started my bachelor’s degree in engineering (ages ago), i interviewed 5 real elec engineers. I asked: How much do you make, where do you see yourself in 5 yrs, 10 years, what would you do differently – if you had your education to do over? I did this for several potential career choices. Now, i’m nearly retired, and i think i made the right choice. Through my entire education [including a masters degree in EE], i have never met a fellow student who did anything similar. WHAT can ppl be thinking to embark on 5 or 6 yrs of work – with substantial cost, both in tuition and lost wages, as well as years out of your life, without doing some research as to what are they getting into?? I fail to understand this at all. Cheers.

    May 30th, 2016 at 11:48 am
  3. Bill Fee said:

    Gold is for kings
    Silver is for gentlemen
    Labor for the Poor
    Debt is for the slaves !!!!

    Stupid is for Americans looking for a check for not working for it !

    Go be a dum ass buy an import !

    June 5th, 2016 at 3:43 pm
  4. surfaddict said:

    I’m pretty-sure the strip club is referring to class of 2016 highschool graduates. They like em fresh and legal (18yr olds)

    June 7th, 2016 at 7:56 am
  5. Bilge Pump McCoy said:

    It’s no wonder so many millennials want a “free” college education as well as “free” birth control, “free” medical care, and other “free” shit. They make so many bad choices that “free” stuff really equates to giving them a get out of jail free card for their bad choices. It’s my opinion that making people pay dearly for their bad choices helps them make better choices in the future. And does anyone really think they are concerned about the “public good” when they demand free stuff? No. They are really only concerned with their own personal benefit. The argument that these things are for the public good is merely camouflage for the the fact they could care less about anyone other than themselves. I would give them NOTHING. Hey millennials – get a job, work for what you buy, and respect the fact that others have their own bills to pay. Confiscating their money for the “public good” doesn’t make you kind and thoughtful. It makes you a greedy little hypocrite that is only one step removed from a thief.

    November 30th, 2016 at 6:15 am

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