In late June 2013, the Federal Reserve Bank of New York released cold, hard facts and figures on the level of college graduate underemployment in the United States. Their statistics took into account recent graduates, who were working a job beneath their level of training in 2012. In other words, the report looked at all the college degree holding baristas, taxi drivers, and club hostesses around the country. It said that 44 per cent of college graduates were working in jobs that rendered their degrees completely useless.
Placing College Graduate Underemployment in a Broader Context
Scary as that may sound, several analysts pointed that this news is actually good news. How could that possibly be so, you ask? Because it reframes the way America, both at corporate level and out in the streets, conceives of the job search process. It also launches two important questions on this topic:
- Have college degrees become irrelevant for employment because they lack any real-life value?, and
- Have college graduates lost their rightful place on the job market because of the recession?
The answers are yet to be uncovered, but the more reasonable truth is that the current college degree underemployment statistics need to be placed within a broader context to be fully understood. For one thing, it’s not just college graduates that are suffering at the hands of the economy – everybody is. A closer look at the Federal Reserve Bank of New York’s statistics reveals that college graduate underemployment has been evolving in close step with the overall levels of unemployment at least since 1990. And this affects both recent college graduates, as well as those who graduated a while back. generation Y might feel underprivileged, but the truth is they don’t have it that much tougher than those who came before them.
How the Tech Boom Contributed to Underemployment among College Graduates
In the late ‘80s and early ‘90s getting a college degree was mandatory for those who wanted to jumpstart their career – particularly in the fields of IT and tech. The boom those industries were seeing at the time made it very profitable to go to college, only to end up in a high-paying, challenging position immediately afterward, as well as in an industry that showed a lot of room for growth. And indeed, it did grow. As colleges churned out graduates in those fields with high demand, so the myth was rekindled: if you go to college, you deserve to land a well-paying job stat.
However, as all employment booms in various industries, that one too inevitably waned. In fact, that’s what two Canadian economists tried to explain in a study they released in March 2013. The scientific research conducted by Paul Beaudry and David Green showed that it was high-time for that IT and tech hiring spree to wane off by the mid- to late noughties. Now that it’s rather resolutely over, college graduate underemployment levels have, of course, slouched. However, this situation is not without precedent – it’s actually very similar to what was going on in the 80s.
Some will argue that current levels of college graduate underemployment are also propelled by the fact that many businesses, especially in IT and tech, are outsourcing their work to countries with more affordable talent. Yet this argument, which essentially says “they’re stealing our jobs” seems immaterial from a historic perspective. That very same perspective is the one which says that another industry boom is bound to follow. In all likelihood, it, too, will cause a hiring spree in that field, much like the booms before it did. For current recent graduates, it may be of little comfort – but the truth is they don’t have it as bad as they like to claim they do.