College Degrees May Be Spurring an Epidemic of Underemployment

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There is plenty of statistical evidence that a four-year college degree increases one's earning potential over a lifetime, and brightens job prospects by leaps and bounds over those seeking employment armed with only a high school diploma. Translating that information into the workaday world, however, paints a much different picture.

Unfortunately, the unemployment rate for young workers is shockingly high, nearly 13% for those aged 20-24. Worse yet is the rate of underemployment -- such as working in a job that doesn't require a college degree -- estimates for which range from 41%-46% for those with a bachelor's degree.

Underemployment is becoming more widespread
Underemployment among young workers has been around for a while, but it appears to be worsening, even as the general employment climate picks up. In April 2012, Gallup noted that 32% of workers aged 18-29 reported being underemployed, compared to workers aged 30 and older, whose rate of underemployment was 14% or less.

A year later, an Accenture College Graduate Employment Survey showed that 41% of college graduates polled said they were underemployed -- and, of those who were not yet working, 63% thought they would need more training to attain the type of position they wanted.

This past June, the Federal Reserve Bank of New York found that 46%of recent college graduates were underemployed. Though a bank presentation noted that higher rates of underemployment are not uncommon in the first few years of a graduate's working life, it also observed that the problem has been getting notably worse over the past few years.

College doesn't seem to prepare students for real work
Why is underemployment among the young surging? One problem seems to be that college coursework simply isn't adequately preparing students for their chosen careers. Both employers and underemployed workers seem to agree this is an issue.

For example, a survey of more than 1,600 working adults administered last spring for the University of Phoenix reported that nearly two-thirds of working persons with at least a bachelor's degree felt ill-prepared for their present jobs, with only 35% feeling that they were using "all or most" of what they learned in college in their position.

As for employers, a Chegg survey noted that most employers find newly graduated recruits short on many desirable features, with only 39% saying they saw recent applicants "completely or very prepared" for the job. Interestingly, only 50% of college students considered themselves to have attained that level of readiness, as well.

A multifaceted problem
Unless changes are made, the underemployment epidemic will very likely continue to worsen. Reversing the direction of this distressing employment trend will require all involved to make changes.

Employers should acknowledge the need for on-the-job training, something they've been loath to do since the recession. The Accenture study clearly showsthat what college students expect for this type of training and what employers are willing to supply are quite far apart: 77% percent of students expected training, while only 48% actually received any. Without employers training first-time employees, this problem will persist.

College students can help by familiarizing themselves with what employers expect of them. For example, while many students work at jobs unrelated to their major, employers want job applicants with either internships or relevant activities on their resumes that show they have at least some experience. Leadership characteristics are very important, as well -- 93% of hiring managers say so -- and students should use their college years to foster these qualities through involvement in campus activities.

Lastly, colleges need to reflect more of the workaday world and tweak their curricula to help students segue more effectively from college life to working life. This will be a sea change for many institutions, and maybe ranking colleges by the employability of their graduates would help. After all, getting a good job is what attending college is ultimately all about.

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  • Report this Comment On November 24, 2013, at 2:46 PM, KennnyF wrote:

    That's what happens when you decide to major in something useless like women's studies or sociology. You'll end up working behind the counter in a retail store. Employers want graduates who studied business, accounting, computer science, engineering....

  • Report this Comment On November 24, 2013, at 3:17 PM, dbtuner wrote:

    Kenny has it right. Useless degrees beget useless careers. I'll add teaching and nursing to the list of useful degrees.

  • Report this Comment On November 24, 2013, at 3:33 PM, banmate7 wrote:

    My advice is to master core skills in high school. This includes reading, writing, basic math, and, finance. Complement this by knowing how to write spreadsheets, text documents, and graphics. Leverage mobile and social apps here as well.

    This kind of background will allow you to master soft skills on your own time. So why go to college to learn journalism, music, art, or some specific social or political concentration? Leverage college to learn STEM knowledge & skills that will allow you to apprentice and master applied STEM fields.

    Legions of software engineers are fine writers, speakers, and very informed on social and political endeavors. They can actually do what journalists, financial advisers, or HR personnel do...whereas the reverse is mostly not true.

    So yes, count me with those who strongly advocate STEM education. I see no point in college if one's education isn't oriented this way. The only soft majors should be for future PhDs who will be knowledge keepers of art, music, political science, etc.

    Many Americans are missing the big picture here. They forgo vocational careers in carpentry, construction, & manufacturing, pursuing soft degrees that have poor ROI, but yet reject STEM. This obviously doesn't work anymore, as life again puts a premium on what you can do with your hands and, consequently, on distinguishing skills sets.

  • Report this Comment On November 24, 2013, at 3:55 PM, philthymcnasty wrote:

    "a survey of more than 1,600 working adults administered last spring for the University of Phoenix reported that nearly two-thirds of working persons with at least a bachelor's degree felt ill-prepared for their present jobs, with only 35% feeling that they were using "all or most" of what they learned in college in their position."

    Is the "university of phoenix" anything other then a diploma mill? Their name comes up a lot next to "scam" when you do a search on them.

    Maybe the reason why people are unprepared for work, is because their degree is not worth the paper it was printed on, and that the schools spent too much money on football and not enough on education.

  • Report this Comment On November 24, 2013, at 4:57 PM, jcmoore2012 wrote:

    the problem is the fact that the proliferation of online universities and open access to education has caused a cheapening of the degree as a milestone in a person's life. With everyone attending school, it has less value then it used to...this is a systemic problem in society. obama's pledge that education is the way forward is not true...for example, russia is the most educated country in the world and a person with a degree is making $400 dollars per month...with 75% of income going towards housing costs...this is ridiculous, if we want 1950-1960 again with people earning 200-220 per month...that would be the way to go...

  • Report this Comment On November 24, 2013, at 5:10 PM, hamiltonpauline1 wrote:

    I was wondering do you need any type of degree to become a medical billing and coding specialist, and what can I do to gain experience, can someone please explain, sorry this is not a comment, can someone please answer this for me Thanks Pauline

  • Report this Comment On November 24, 2013, at 6:22 PM, thumber wrote:

    In some respects the underpayment is also happening because of all the job losses which have taken place during the recession period. Many companies are not hiring seasoned professionals due to their salary requirements. They will hire fresh graduates for a lot less pay.

  • Report this Comment On November 24, 2013, at 7:17 PM, kenz wrote:

    "After all, getting a good job is what attending college is ultimately all about." There is no necessary relationship between college completion (education) and employment readiness (training). The latter is the responsibility of employers. Some majors are more useful to employers than others, but that should be coincidence rather than design. Certification programs sponsored by professional associations(IEEE et al) or suppliers (Cisco et al) are general training, but even they should not be expected to fully prepare a potential new hire for a specific position unless the employer defines that congruence.

  • Report this Comment On November 24, 2013, at 7:29 PM, Fizics wrote:

    Boomers aren't leaving their jobs, Generation X can't move and NO ONE wants to quit their job because it's so hard to get another one and employers want slaves, basically. We are going to have a Japanese "Lost Generation".

  • Report this Comment On November 24, 2013, at 7:39 PM, syzygysyzygy wrote:

    I dont know what % of college degrees are awarded fr basket weaving in this dumbed down american educational system but I bet its more than 50%

    so obviously they not prepared fr wrk especially since for decades engineers have been lied to about this fictional "shortage" of engineers and so cant get decent jobs ---- and engineers are anything but basket weavers in college!!!!

    fact is most high school louts should be out digging ditches and most college students dont belong in college either

  • Report this Comment On November 24, 2013, at 11:06 PM, icecream92 wrote:

    An in-demand major, a top ranked program and good grades will get you a good job. My son's a sophomore mechanical engineering major at Penn State main campus with a 3.5 GPA and he's been offered 3 internships this summer. He's accepted one with John Deere in their power train division and will be paid $21.50/hr. Not bad for a 19 year old. The price he's paying is no partying and carrying 18 credits a semester with classes like Calc 3, thermodynamics and quantum physics. Hard work equals great rewards.

  • Report this Comment On November 24, 2013, at 11:07 PM, Barmil wrote:

    What you have is a business world that refuses to spend money on talent that they can build on ,they want a college degree because that is what they found works for the basics that use to be taught in high schools, also it is the ridiculous low pay they give in return in order to keep their profits up for the share holders. As for the tail end of the baby boom we're are poison to the business world by our coming retirement they don't wan to responsible for that either for the same reason.

    So we have a country frozen with little growth and a lot of debt.

  • Report this Comment On November 24, 2013, at 11:09 PM, bugmenot wrote:

    The Chicago Tribune reported that most teaching students in Illinois fail the teacher's exam! The US has dropped from first to way down the ladder of education accomplishments. Our kids are getting dumber because they are taught by dumber teachers. The Professional Educator tag in the US is basically synonymous with incompetent moron.

  • Report this Comment On November 24, 2013, at 11:32 PM, hotdaddy13 wrote:

    Having been employed in one university or another as tenured faculty, I can assure everyone from brutal experience that they are eaten up with left-wing PCism where people who have degrees in Women's Studies, Eastern Religions, Comparative Political Systems, Special Education, and Communications quickly rise into positions of responsibility and authority. Special Education profs and their close cousins, professors or Early Childhood Education (glorified babysitting for the children of welfare mothers so they can procreate freely for next year's additional public child assistance raise) are particularly odious since they have absolutely no scientific or subject-matter basis from modern science. The name of the game is to get government grants rather than teaching anybody anything of practical use in the "real" world.

  • Report this Comment On November 25, 2013, at 12:04 AM, OomYaaqub wrote:

    Why can't we just admit the most obvious fact of all, which is that there simply aren't enough professional level jobs for everyone who wants one? And there never will be.

  • Report this Comment On November 25, 2013, at 1:15 AM, craighundelt wrote:

    This dismal economic reality is a gift wrapped present from Obama and his gang that engineered this pathetic recovery. Widespread corruption and government waste, crony capitalism, radical social change, out of control government debt make for anemic and pathetic economy.

  • Report this Comment On November 25, 2013, at 1:17 AM, craighundelt wrote:

    It is a graduation gift from Obama.

  • Report this Comment On November 25, 2013, at 1:28 AM, Guest1256 wrote:

    I taught a writing course at a large research university and was surprised at how many students arrived thinking the course would be pointless and stupid and that they already knew how to write well (very few of them did). I have seen students ask professors to move exams to accommodate weekend football games, and fail to attend courses that are costing them thousands to take. I think a lot of kids at that age simply do not know how to get the most out of their education, and as a result do not allocate their time or attention the right way in what are truly critical years. Given how much education costs, they really ought to get better guidance about what they are paying for and how to get the most out of it.

  • Report this Comment On November 25, 2013, at 1:57 AM, hotdaddy13 wrote:

    I agree totally with your statements, Guest 1256. Many students just want to put off growing up for at least 4 years. "Basket weaving" majors always were able to party for their college years and then find a position that led to other positions etc. The utilitarian college degree was only a minority of degree programs as long as dad and mom would pay for it. Now the private schools are the only ones left who have viable departments teaching the more "esoteric" majors

    Each generation has a cross to bear, I suggest. My college generation of the mid 60's had jobs available at the end as long as you made acceptable progress toward your degree. But if you failed to make a 2.0 or higher every semester, for males, you were reclassified from 2-S to 1-A and were usually drafted into potential Vietnam service. And as soon as you were finished with your degree, many were drafted anyway. This resulted in a situation where there were too many jobs available! Wonder how many of today's college males would trade liability for the draft into a rice paddy in Vietnam in exchange for a healthier job market?

  • Report this Comment On November 25, 2013, at 9:35 AM, istele wrote:

    Universities today are worrying in how students is writing a stupid APA paper. most professor lowering the gpa to students just because students made mistakes in their essays.

    does essays is going to give experience in the outside world? no at all students need help in get experience in their subject .

    the problem is those essays of 5 and 6 page those paper are no helping to any students to get a job

  • Report this Comment On November 25, 2013, at 10:07 AM, basserino wrote:

    Enough to go around. 1. To be sure, students idealistically believe they will find a job in their major within 10 miles of their parent;s house. 2. many in liberal arts fail to realize that they will go to work in a business organization, yet have never bothered to learn what business does. And, 3. even the business majors think they will walk out of school and directly into a managers job!

    As for employers, many do not really know what they are looking for and hire resumes rather people thereby eliminating qualified people because they have little experience. Quite frankly, all those employers who constantly complain about the poor skills of today's graduates are themselves woefully lacking. Once they realize that colleges are education centers and not job training centers, they will step up and provide the training required and stop whining.

  • Report this Comment On November 25, 2013, at 11:35 AM, cityperson wrote:

    A college degree may be creating underemployment of people that were told they wold be a manager and have and office. To there suprise there are not many mangers and just people needed setting in offices wiuth a college degree people. They find out in time they have to actually work and maybe go back to a junior college or skill school to obtain a real skill in order to work. I know many young people that had to obtain additional traing and learing to function in the real work force.

  • Report this Comment On November 25, 2013, at 11:54 AM, banmate7 wrote:

    It all comes down to personal culture. Good families value education. Children of such families learn, one way or the other, especially coming out of high school.

    As others have noted here, significant numbers of Americans don't have a solid personal culture here. It's all too easy to come out high school ill prepared & then borrow lots of money on college programs that in reality are diploma mills & a right of passage. Worst of all, and I'll say it again & again: most of these kids never learn personal finance.

    I'm convinced that learning the value of money would compel superior choices in education & career. If for nothing else, net savings & investment would facilitate career flexibility. Money in the bank affords geographic & temporal nimbleness.

    You can move to where the jobs are. You can get the skills and education on demand, figuring out ROI. You have a larger range of salary meeting your needs. It all happens when you have money, which is a product of a good culture of savings & investment.

    The fact that my family & I had money has given me the ultimate career & education flexibility. Don't get me wrong, as I'm no silver spoon. We earned our way into prosperity. The point is that this now gives us considerable leverage and flexibility in adapting to changes in the economy.

    In my opinion, personal culture is where education has failed most egregiously. We would all be better served if people understood cash flow, balance sheets, interest, amortization, debt, ROI, and even value investing...right out of high school.

    The rest is noise.

  • Report this Comment On November 25, 2013, at 1:57 PM, jacynte wrote:

    exactly banmate7. , lovely mouth ,and analogy . people want easy jobs like pressing buttons eat canned food and get fat . online learning is the worst will prevent human contact and interpersonal relations and plus the internet paves the way to those who are no original , who go online copy shuffle words around and paste them,it . the teachers are dumb don';t catch them . people don;'t know how to write a correct sentence that makes sense in teh right contex and they are native speakers . colleges have so many useless courses and subjects that are not compataible with the job market, weak and no constructive in any shape or form-- and epsecially now we live in a technological age -- every major or course should have and should require you to take a computer class and a microsoft words or excel to have some types of skills-- instead of majoring in theater, psychology, anthropology , polititcal science or art and alike . these are for teh most part useless, by itself ,majors unless you know someone and unfortunately these days , more, is who you know and not what you know. also students should not be allowed to write an essay at home and present it . that is boloney . i see them all teh time going on line copying paragraphs-- changing some words-- and presenting it to the teachers. on the ohter side , im completely against the idea of picking a major to reap profits , i f hate corporations and banks and teh person who become a machine with no heart and no soul . and if you think of it our biggest problem is unbridled capitalism, outsourcing and the lure of success is delusional and deceitful. i rather do what i love than being hostage to greed and others' expectations and gain f that. what im talking about is to be brimmed with words of wisdom as means for a just cause, widen your horizone with the education that is going to make a difference in the life of many ,, and not pursuing a career to favor Gmo and F around with what is natural and replace the makers' gifts by stupid science.. technology only good if we use it to help others, to provide for the present generation while preserving the one to come, and not to be selfish to buy big things that we don't f need. people aroudn the world are starving to death, have no food no medical care no clothes, while others are spending millions on their accessories, dogs, devices and games and what not they are as useless as the one in prisons and worst . everything you do that does not benefit others is inherently destructive . the greatest thing of them all is to think of every otherness like you do to yourself, and only if you love yourself. no im not a religious person as a matter of fact hate religion - without going into details or digress ...

  • Report this Comment On November 25, 2013, at 2:08 PM, banmate7 wrote:

    jacynte, I get the gist of your passionate paragraph.


    Kidding aside, you win hearts and minds in high school. Spirituality? Finance? Work ethic? Core knowledge?

    Young folks should have cutting edge exposure and mastery of these things right out of high school. If they don't, well, lots of competitive kids all over the world do. Let's not forget that so do many hard working, smart, and competitive Americans.

    Again, if there is 1 thing I would teach, it is finance.

  • Report this Comment On November 25, 2013, at 5:17 PM, kungfu wrote:

    Two thoughts; first, the condition of being under-employed is subjective. It is self reported. The fact that you have a college degree and you have a job that doesn't meet your expectations does not mean that you are under-employed. College is not the measure of ability, never has been. It is, however, a yardstick to measure potential. Having a BS or an MBA does not make one qualified to be an executive, a manager, or an officer in a business. It might show potential for such positions if your newly acquired knowledge base is develop sufficiently by experience, but it does not mean you are qualified upon graduation.

    And second a college degree, with the exception of a few specific degrees, is not about training you for a job. It is more about learning to think and to reason. College education is not there to train you on the nuts and bolts of how a particular job or career functions, its main purpose is to develop skills and teach discipline in thinking so that you are more prepared to handle new and or unusual circumstances that will come at you as you gain knowledge of your career through experience. Remember it takes about ten years of experience before one gains expertise in almost any endeavor - 4 to 5 years of college study will never do that.

  • Report this Comment On November 26, 2013, at 10:34 AM, sabebrush6 wrote:

    Too many small business men/women try to use the college degree as a basis for hiring for anything. You sure don't need a BS degree for hanging garage doors. You don't need a BS degree for working at Jan's bakery.

    But the problem is, everyone (especially teachers) keep pushing everyone in their classes that they can't get through life without a college degree. That, my friend is total BS. There are many, many really great paying jobs out there that only take tech school training. Pays big bucks.

  • Report this Comment On July 13, 2016, at 2:36 AM, saraheil wrote:

    Mine is a lowly AA, and a general studies at that. What it has done is gotten my foot in the door on lower level jobs in corporations. Once in the door with a good work ethic, like I was often promoted quickly up to the positions that many people who had BA and BS degrees ( started and often passed them on the climb up. The moral of this is a good work ethic and not expecting things to be handed to you just because you have that degree will get you further.

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