Are we producing TOO many college graduates for the workforce to absorb?
….only 3 will require college degrees.
This contrasted sharply with a well-known and frequently shared report by Georgetown University’s Center on Education (Help Wanted, Projections of Jobs and Education Requirements through 2018), which predicted that by 2018 our economy would be roaring along with 158 million people employed. In particular, the authors of the report which included Anthony Carnevale, the former Director of Planning and Budget of President Clinton’s staff, suggested that our country will find itself with 3,000,000 fewer college-educated workers than our economy will need.
At the time this report was instrumental in encouraging people to go back to college during the Great Recession so they could tap into the jobs the economy created when the recession was over. In fact, President Obama often referred to the predictions in this report during trips around the nation. His goal at the time, was to give hope, direction, and a sense of purpose to the MILLIONS who were losing their jobs every quarter. Americans without the prospect of a job, aided by the flush college loan system, took the President’s advice and flocked to colleges to ride out the recession.
Two respected research authorities predicting opposite outcomes!
After reading both the Department of Labor’s prediction that the economy will need LESS college educated workers, and the Center on Education report indicating there would be a shortage of college educated workers – I was a bit perplexed!
It was clear that the research and reports by these two credible institutions seemed to be telling completely different stories. The problem is, if the Department of Labor’s report is accurate, millions of college graduates and their families will be negatively impacted.
So which report was correct?
With the benefit of hindsight, we can fast forward to today to see which report is more accurately reflecting the realities we are facing – now 7 years later –and then based on that, predict the employment picture for graduates five, ten, and fifteen years from now.
Here’s what we know today:
As the dust settled in 2015, our economy miraculously (and finally) recovered the 8 million jobs it eliminated during the Great Recession. Unemployment, as reported by the Department of Labor, has hit a new low we haven’t seen in the last 8 years. It is currently at a little under 5 percent.
- The good news is that the economy recently finally reached the previous employment high of 138 million people working.
- The bad news is the economy failed to go beyond the 138 million jobs and produce enough jobs to keep everyone that wanted to work – working!
The picture gets bleaker when you consider that during the 8 years it took to return 138 million people working:
- We took in hundreds of thousands of immigrants.
- We graduated millions of students from high school.
- There was an increase in number of retirees– whose retirement funds were decimated by a stock market that dropped from 16,000 to about 6500—who had to get back into the workforce to supplement their incomes.
These are not just numbers, there are real people with families, children and obligations that are not able to land a job. Worse, these numbers are a primary reason why salaries for those working have been flat for over a decade!
We have a long way to go to get everyone back to work.
In reviewing a forty-year record of how many jobs were created on a monthly basis, I found that our economy – on average – has created 138,000 jobs a month. To stay on track with our historical norms, over the last 8 years we should have created 138,000 jobs per month, on top of the 138,000,000 jobs available in 2008. If we had created jobs at the level of our historical norms during the past 7 years, and if our economy had not eliminated 8,000,000 jobs, we would have 13,248,000 more people working today than we did in 2008. But that did not happen did it?
So let’s stop for a minute.
Let’s go back to the Georgetown study that suggested we’d have 158 million people working by 2018. If we added the 13,248,000 jobs that we SHOULD have created between 2008 and 2015 to the 138 million jobs we had in 2008, we’d be close to 152 million people working today. And if we added roughly 2 million jobs a year each during 2016, 2017, and 2018, we’d hit the 158 million people working predicted by the report. Now that’s pretty interesting!
But we’ll never make that number!
To hit the 158 million mark predicted by the end of 2018, the economy would have to create more than 500,000 new jobs per month! Our employment market looks good, but it’s only averaging roughly 200,000 new jobs per month.
What does the crystal ball predict?
On one hand, we had a government organization (DOL) suggesting in 2010 that there would be a decreased demand of college-educated workers in the future, and on the other hand, a private report that indicated our economy would find itself needing a significant number of new college graduates to fill industry needs.
So who is/was right?
My guess is the Department of Labor’s prediction is probably a good indicator of what the employment market will look like for college-educated workers in the future.
- Computer software like SIRI, CORTANA, and Google’s NOW are going to become increasingly intelligent with the capability of replacing white collar, college-educated positions such as engineers, sales persons, lawyers, etc.
- College educated and very cheap international labor will take over an increasing number of American workers’ jobs too! Companies are already recognizing they can hire 4-5 people for the same amount that they currently pay one worker. China, for example, produces 6 million graduates per year, most with English language skills, and all willing to work for less than five dollars per hour.
In a recent webinar in our CareerDiscussions series, Federico Pistono, author of Robots Will Steal Your Job, but that’s OK! cited an Oxford Study that suggests that in the next two decades 47 percent of American jobs are likely to be replaced by computers.
Bureaucrats WAKE UP!
In 2007 sixty-seven percent of Americans were working. Today only 59.6 percent are working. If the studies we shared in this article are accurate, the percent of Americans working could drop into the high 30’s or 40’s in just two decades! The political, social, and emotional effect will be huge. There is plenty of evidence and information available to influence state, local and federal government initiatives to plan for and adjust to these changes.
The political, social, and emotional effect will be huge! There is plenty of evidence and information available to influence state, local and federal government initiatives to plan for and adjust to these changes.
If you are just starting your career– or even at the mid-point of your career– take heed of this research and start preparing for an economy and workforce that is significantly smaller, enormously more competitive and one that will benefit those who are prepared.
If you work in a college, do everything in your power to bring this to the attention of your management and ask them to help you develop a plan that will better prepare your students, grads, and alumni for the changes ahead.