The graduating class of 2015 will enter an employment market already bloated with college grads & the Bureau of Labor Statistics predicts it will get worse!
I was driving up route 77 to Tremont, an old neighborhood in Cleveland that has sprouted dozens of restaurants, coffee shops, and bars, to go to a funky local coffee shop called Civilization. My wife and I were listening to a NPR news program that was discussing the fact that we had sent 1,000,000 military and support personnel over 10 years to fight a war in Iraq that we later learned was built on “misinformation.”
It reminded me of a question I have been struggling with lately:
With the record number of graduates that are either underemployed or unemployed, could it be that our nation has reached the point that we are producing too many college-educated workers?
It got me wondering if policy makers are misreading the tea leaves about whether our economy is going to need all of the graduates our colleges are producing. Before I get into that discussion, let’s build a foundation:
- Since 2000, the number of people going to college has doubled from 10 million to nearly 20 million.
- In 1965, only 10 percent of the population had earned a college degree. Today, 30 percent of the population has a college degree.
What’s the result of this increased percentage of Americans with college degrees?
Well, according to a survey by the Associated Press a couple years ago, 53.6 percent of graduates under 25 are either underemployed or unemployed. Numerous follow up surveys including one just last year by The Federal Reserve Bank of New York have showed similar results.
Is this a temporary issue?
Unless I’m reading the data wrong, the predictions offered by the Bureau of Labor Statistics in a report titled Employment Projections: 2012-2022 Summary seem to indicate this is a trend that is only going to get worse. According to the report:
- Two-thirds of the 30 occupations with the largest projected employment increases from 2012 to 2022 typically do NOT require post-secondary education for entry.
- Occupations that typically require post-secondary education are projected to add 10,996,000 (new and vacated) job between 2012 and 2022.
If you divide 10,996,000 by 10 years – it appears we will need to produce about 1,099,600 graduates per year to fill the need projected by the BLS. However, we are currently producing many more than that. According to the National Center on Education Statistics, in 2011/2012 we graduated:
- 1,791,046 students with a Bachelor degrees
- 754,229 students with a Masters degrees
- 170,062 students with PHD degrees
..for a total of 2,715,337 graduates. That is 59.6 percent more than the BLS predicts we need per year!
Past trends can sometimes predict the future!
There is more evidence that we may have reached the point that our economy will not be able to absorb the number of graduates our colleges are producing.
The National Employment Law Project conducted a study to see what kind of jobs were created as we climbed out of the Great Recession. Their report titled, Tracking the Low-Wage Recovery: Industry Employment & Wages, found that:
- Lower-wage industries constituted 22 percent of recession losses, but 44 percent of recovery growth. ($9.48 – $13.33)
- Mid-wage industries constituted 37 percent of recession losses, but only 26 percent of recovery growth. ($13.73- $20.00)
- Higher-wage industries constituted 41 percent of recession losses, and only 30 percent of recovery growth. ($20.03 – $32.62)
It also reported that there are nearly two million fewer jobs in mid- and higher-wage industries than there were before the recession took hold, while there are 1.85 million more jobs in lower-wage industries. They suggest this reduction in demand for higher skilled workers could be the reason that the average household’s take-home pay has declined through the recession and the recovery to $51,017 in 2012 from $55,627 in 2007, after adjusting for inflation.
Our economy is now producing in excess of 250,000 jobs a month, which is a good thing, but if the jobs that are being created match those predicted by the Department of Labor Statistics and match the trend that the National Employment Law Project suggests then its only going to get harder for upcoming classes to get a job that requires a college degree.
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