Data that encouraged millions to go to college to prepare themselves for a post Great Recession hiring surge is off by millions!
When I was doing research for my book, The Unemployed Grad, and What Parents Can Do About It, I ran across a report by the Georgetown University Center on Education and the Workforce called Help Wanted, Projections of Jobs and Education Requirements through 2018.
The report funded by Lumina Foundation, the Bill and Melinda Gates Foundation, the Ford Foundation, and others, carried a lot of credibility. I’m assuming the data that was collected and used came from approximately 2008 and earlier, as the report was issued in 2010.
The report combined a number of different data sources and analyzed the employment landscape as we slugged our way out of the Great Recession.
One of the main goals of the report was to reinforce a well-accepted fact that a college education has historically resulted in higher wages and a lifetime earning lift of nearly a million dollars more for college graduates than those with only a high school diploma. Another goal was to provide state, local, and federal policy makers the kind of data needed to determine policy in an upside-down employment market and collapsed economy. The report was designed to remind the public that post-secondary education would be their best umbrella in a recession.
The public understood this as enrollment in higher education surged from 10 million in 2000 to over 18 million in 2010.
The report was chock full of predictions including:
- By 2015, the economy would replace the nearly 8 million lost jobs by the end of the Great Recession and add ANOTHER 8 million!
- By 2015, we would have 158,000,000 people employed and by 2018, we would employ as many as 161,500,000.
- Two-thirds of the job vacancies between 2008 and 2018 would require some post secondary education
- We would under-produce post secondary graduates by approximately 3 million by 2018
The one thing we have to remember, though, is that predictions are just predictions. The data that promoted college as a solution to work one’s way into a great new future turned out to be flawed.
- The report got PART of the first prediction right. The economy, just last year, recovered the 8 million jobs it shed nearly overnight between 2007 and 2008. However, it completely missed the second part of that prediction. If our economy had another 8 million jobs (on top of the 8 million lost), I would not be writing this article.
- The second prediction was off by 20,000,000 jobs! The report suggested we would have 158,000,000 people working today. As of a few months ago a number of articles celebrated the fact that we had finally reached the same number of people working today as when the Great Recession started in 2007. That number? 138,000,000.
- Current employment trends do not support the third prediction. In a previous article, I shared that the Bureau of Labor Statistics reported that two-thirds of the 30 occupations with the largest projected employment increases from 2012 to 2022 typically do NOT require postsecondary education for entry. That’s almost opposite of the prediction of third prediction.
- Regarding the fourth point – I’m sure the 53.6 percent of grads under 25 that according to the AP
I also shared in that article that the National Employment Law Project reported that during the recovery years of the Great Recession, the largest increases in jobs came from low-wage industries and positions. The NELP reported that there are nearly two million fewer jobs in mid- and higher-wage industries today, than there were before the recession took hold, while there are 1.85 million more jobs in lower-wage industries.
Is there a chance these predictions will kick in – but just later?
While the employment force is expected to grow by .05 percent per year from 2012 – 2022, the overall labor force participation rate is projected to decline from 63.7 percent in 2012 to 61.6 percent in 2022, continuing the trend from the past decade. (The labor force participation peaked at 66.2 percent in 2002.) That means we’ll have more educated people entering the workforce vying for more jobs that are not at the higher end of the pay scale. It will be a buyers’ market for businesses who will have their choices of the best talent at the least cost.
There are 3 additional trends that should concern anyone who is looking at future employment with rose colored glasses.
- The Internet has disintermediated and or dramatically changed how most companies do business. Now it is going to disintermediate the individual worker. Web sites like Odesk and Elance have given businesses access to on-demand talent, whenever they need it.
- Global talent is offering businesses access to talent at significantly less cost. It started with telemarketing, but is expanding to all areas. A graduate today expecting to earn $40,000 is going to compete with a Master’s degree graduate from China who would be willing to work for $7,0003.
- New startups, that have been the source of new job creation, are hiring less. The good news is we are still creating an average of 600,000 new businesses a year– but instead of hiring 5-8 new people on average each, new startups are hiring 4-5 new people.
So what should a prospective student do?
The good news is that the National Association of Colleges and Employers has data that suggests the more one uses his or her career center’s resources the more likely, he or she is to get internships, mentoring relationships, and a job that is relevant to his or her desired career, and at a higher pay scale.
Colleges that SIGNIFICANTLY ramp up funding and resources for their career center and begin to create a career-centered college culture will produce graduates who will have a better chance of overcoming the significant odds that are stacked against them.
Over 86 percent of incoming freshmen say they are going to college to better their employability. It takes the average grad nearly 8 months to find a job. 58 percent of grads blame their college for not giving them the skills to find a job! Colleges and universities that focus on careers will thrive in the coming decades! Click here to learn how your campus can thrive!