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The Crisis of Over-education for Under-educated Jobs in the Workplace

How can we improve the Jobs Market for College Grads?

We have a crisis of over-education for under-education jobs. About 14 percent of those who graduated from college between 2006 and 2010 are looking for full-time jobs, either because they are unemployed or have only part-time jobs, according to a survey of 571 recent college graduates released by the Heldrich Center at Rutgers.

And then there is the slice of graduates effectively underemployed, using a college degree for positions that don’t require one or barely scraping by, working in call centers, bars or art-supply stores.

“They are a postponed generation,” said Cliff Zukin, an author of the Heldrich Center study. He noted that recent graduates seemed to be living with parents longer and taking longer to become financially secure. The journey on the life path, for many, is essentially stalled.

The Heldrich survey also found that the portion of graduates who described their first job as a “career” fell from 30 percent, if they graduated before the 2008 economic downturn (in 2006 and 2007), to 22 percent, if they graduated after the downturn (in 2009 and 2010).

Earning a college degree is still the best way to avoid unemployment. But the number of recent college grads who can't find work, or who can find only part-time retail or restaurant jobs that don't require an education, grew by more than 70 percent over the last two years.

That puts stress on the graduates, who often can't keep up with student loan payments when they're making $8 or $10 an hour, and crowds out other young workers with less education.

According to an April 2011 study for the Economic Policy Institute by Heidi Shierholz and Kathryn Anne Edwards:

•The unemployment rate for 16- to 24-year-old workers averaged 18.4%, compared with 9.6% for U.S. workers overall.

•Young high school graduates have been hardest hit: The unemployment rate for high school graduates under age 25 who were not enrolled in school was 22.5%, compared with 9.3% for college graduates of the same age.

•Young high school graduates are not keeping pace with their older peers: Their 22.5% unemployment rate is more than double the 10.3% rate among high school graduates age 25 and older.

•While their degrees afford them more opportunities in the labor market than other young workers, young college graduates still lag far behind older college-educated workers: 9.3% of them are unemployed, more than double the 4.7% unemployment rate for college graduates age 25 and older.

•Since unemployment among young college graduates still shows no improvement, the class of 2011 will likely face the highest unemployment rate for young college graduates since the Great Recession began.

•Young blacks and Hispanics are suffering disproportionately. The unemployment rate for black high school graduates under age 25 and not enrolled in school was 31.8%, compared with 22.8% for Hispanic high school graduates and 20.3% for white high school graduates. The unemployment rate for young black college graduates was 19.0%, compared with 13.8% for young Hispanic graduates and 8.4% for young white graduates.

•Young workers as a group have not been “sheltering in school” during this downturn. School enrollment rates since the start of the Great Recession have not increased by noticeably more than the long-term trend.

These statistics are troubling in that it adds fuel to the notion that we are creating a “lost generation.” Not only may college graduates never get to work in their career of choice but, just as important, in all likelihood they will be the first generation not to be financially better-off than their parents.

The logical solution to our problem is to grow the economy so that new jobs can be created and college graduates can start to fill those positions. The problem is no one seems to have the answer how to do just that. The Republican candidates for President seem to believe the starting point is to appeal regulations such as “Obamacare”, Sarbanes-Oxley, and the Dodd-Frank Financial Reform Act. The only problem with that is the latter two were passed into legislation following massive accounting and financial frauds. Are we now to believe that corporate America has learned its lesson?

President Obama seems to favor more of a government-intervention approach to creating jobs. The problem with that is it may not create the jobs needed by college graduates to recover from the job-limbo they have faced for two or three years since graduation. Some benefit may accrue to society if targeted technical training is underwritten by companies that get tax credits for their efforts.

I believe our crisis of over-education for under-education jobs can be solved only if we bring companies home from overseas. Some would argue a lower corporate tax rate would hasten that day. I’m not so sure. It’s not that easy to move a plant thousands of miles especially after investing so much in corporate infrastructure.

It is indeed unfortunate that so much time is devoted to personal attacks and “gotcha” politics in the current election cycle and not enough on developing workable solutions to our under-employment problem. Rather than spending $300 Billion to colonize the moon as suggested by Newt Gingrich, we had better first take care of our own country or I fear a backlash will occur to the economic policies in the U.S. that mirrors those in European countries.

Blog Posted by Steven Mintz, aka Ethics Sage, on February 3, 2012

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