Wednesday, 25 April 2012

Half of US college grads are jobless, underemployed due to weak job market

The Straits Times, 24 Apr 2012

WASHINGTON: The United States college class of 2012 is in for a rude welcome to the world of work.

Half of young college graduates have been left either jobless or underemployed, in positions that do not fully use their skills and knowledge, thanks to a weak labour market.

Now, an analysis of government data conducted for The Associated Press lays bare the highly uneven prospects for holders of bachelor's degrees.

While there is strong demand in the science, education and health fields, the arts and humanities flounder. Median wages for those with bachelor's degrees are down from 2000, hit by technological changes that are eliminating mid-level jobs such as bank tellers.

Increasing numbers of young adults with bachelor's are now scraping by in lower-wage jobs - waiter or waitress, for example - and that is dashing their hopes that a degree would pay off despite higher tuition fees and mounting student loans.

Taking underemployment into consideration, the job prospects for bachelor's degree holders fell last year to the lowest level in more than a decade.

It is a situation Mr Kelman Edwards Jr is familiar with. After earning a biology degree last May, the 24-year-old could find work only as a construction worker.

He did that job for five months before quitting to focus on finding employment in his academic field. He applied for positions in laboratories but was told they were looking for people with specialised certifications.

'I thought having a biology degree was a gold ticket for getting into places, but every other job wants you to have previous history in the field.'

Mr Edwards, who has about US$5,500 (S$6,900) in student debt, recently met a career counsellor who advised him to pursue further education. 'Everyone always tells you, 'Go to college'. But when you graduate, it's kind of an empty cliff.'

His situation highlights a widening but little-discussed problem. Perhaps more than ever, the choices that young adults make earlier in life - level of schooling, academic field and training, where to attend college, how to pay for it - are having a long-lasting financial impact.

'You can make more money on average if you go to college, but it's not true for everybody,' said Harvard economist Richard Freeman, noting the growing risk of a debt bubble with total US student loan debt surpassing US$1 trillion.

By region, the Mountain West was most likely to have young college graduates jobless or underemployed - roughly three in five. On the other end of the scale, the southern US was most likely to have them in higher-skill jobs.

College graduates who majored in zoology, anthropology, philosophy, art history and the 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.

The figures are based on an analysis of the 2011 Current Population Survey data by Northeastern University researchers and supplemented with material from Mr Paul Harrington, an economist at Drexel University, and the Economic Policy Institute, a Washington think-tank.

They rely on Labour Department assessments of the level of education required to do the job in 900-plus US occupations, which were used to calculate the shares of young adults with bachelor's degrees who were 'underemployed'.

About 1.5 million, or 53.6 per cent, of bachelor's degree holders aged under 25 last year were jobless or underemployed, the highest share in at least 11 years.

Broken down by occupation, young college graduates were heavily represented in jobs that require a high school diploma or less. In the last year, they were more likely to be employed as waiters, waitresses, bartenders and food service helpers than as engineers, physicists, chemists and mathematicians combined (100,000 versus 90,000).

Despite the gloom, Mr David Neumark, an economist at the University of California, Irvine, said a bachelor's can have benefits that are not fully reflected in the government's labour data.

He said that even for lower-skilled jobs such as waitress or cashier, employers tend to value bachelor's degree holders more highly than high school graduates, paying them more for the same work and offering promotions.


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