October 21, 2020

Economix: Life Is O.K., if You Went to College

CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

Despite all the questions about whether college is worth it or not, college graduates have gotten through the recession and lackluster recovery with remarkable resilience.

The unemployment rate for college graduates in April was a mere 3.9 percent, compared to 7.5 percent for everyone else. And among all segments of workers sorted by educational attainment, college graduates are the only group that has more people employed today than when the recession started.

Here’s a look at how employment has changed since the recession officially began, in December 2007, sorted by education.

Source: Bureau of Labor Statistics, via Haver Analytics. Data refer to workers age 25 and older. Source: Bureau of Labor Statistics, via Haver Analytics. Data refer to workers age 25 and older.

The number of college-educated workers with jobs has risen by 9.1 percent since the beginning of the recession. Those with a high school diploma and no further education are the near mirror image, with employment down 9 percent on net. Workers without even a high school diploma have seen their employment levels fall 14.1 percent.

Finally, for those with some college but no bachelor’s degree, employment fell during the recession and is now back to exactly where it began: There were 34,992,000 workers with some college employed in December 2007, and there are 34,992,000 in the same boat today

In other words, college-educated workers have gobbled up all of the net job gains. In fact there are now more employed college graduates than there are employed high school graduates and high school dropouts put together.

Source: Bureau of Labor Statistics, via Haver Analytics. Data refer to workers age 25 and older. Source: Bureau of Labor Statistics, via Haver Analytics. Data refer to workers age 25 and older.

It’s worth noting, too, that even young college graduates are finding jobs, if you look at the most recent cut of data on this subgroup (which is from 2011).

As I wrote in an earlier post, in 2011, the unemployment rate for people in their 20s with college degrees or more education was 5.7 percent (for those whose highest credential was no more than a bachelor’s, the number was 5.8 percent). For those with only a high school diploma or G.E.D., it was more than twice as high, at 16.2 percent.

Sources: October School Enrollment Supplement, Current Population Survey, Bureau of Labor Statistics; Thomas Luke Spreen. Sources: October School Enrollment Supplement, Current Population Survey, Bureau of Labor Statistics; Thomas Luke Spreen.

Of course, just because college graduates have jobs doesn’t mean they have “good” jobs.

There is ample evidence that employers are hiring college-educated workers to perform jobs that don’t actually require college-level skills — positions like receptionists, file clerks, waitresses and car rental agents. This form of underemployment might be one reason why we see so much growth in employment among college graduates despite the fact that the bulk of the jobs created in the last few years have been low-wage and low-skilled.

Clearly positions in retail and food services are not the best use of the hard-earned (and expensive!) skills of college-educated workers. But at least those graduates are finding work and income of some kind, unlike their less-educated peers. And as the economy improves, college graduates will be better situated to find promotions to jobs that do use their more advanced skills and that pay better wages.

Article source: http://economix.blogs.nytimes.com/2013/05/03/life-is-o-k-if-you-went-to-college/?partner=rss&emc=rss

Economix Blog: Want a Job? Go to College, and Don’t Major in Architecture

Say it with me, readers: College is worth it.

For all the bellyaching about wasted degrees and the many indebted grads stuck on their parents’ couches, recent college graduates are still doing a lot better than their less-educated counterparts. Unemployment for new graduates is around 8.9 percent; the rate for workers with only a high school degree is nearly three times as high, at 22.9 percent.

That’s according to a new report [PDF] from Georgetown’s Center on Education and the Workforce. The report also had some fascinating statistics on earnings and jobless rates by college major, something we’ve written about before.

The chart below shows unemployment rates sorted by major, based on 2009-10 census data. You can also see jobless rates for graduates of a given undergraduate major who went on to receive further education (not necessarily related to their college major). In the chart, “recent college graduate” refers to workers who are 22 to 26 years old; “experienced college graduate” covers those 30 to 54; and “graduate degree holder” is limited to workers 30 to 54 years old.

DESCRIPTIONGeorgetown University Center on Education and the Workforce American Community Survey, 2009-10, pooled sample. Recent college graduates are those 22 to 26 years old, and experienced college graduates are 30 to 54. Graduate degree holders are also limited to those 30 to 54. The percentage unemployed is based on total employed and unemployed. Earnings are based on full-time, full-year workers.

Some majors even produced college graduates who, at mid-career, earned more than workers from other fields who went on to received a tertiary degree. For example, experienced workers whose highest degree was a bachelor’s in health care are more likely to be employed than people with graduate degrees who majored in most other fields.

Those who majored in less technical subjects, like humanities, arts and social science, had higher unemployment rates.

The unemployment rate for recent graduates was highest in architecture, at 13.9 percent, probably at least partly because of the housing market collapse. Even architecture majors who went on to receive graduate degrees, which usually safeguard workers from unemployment, are doing poorly in the job market. With a jobless rate of 7.7 percent, architecture majors who hold graduate degrees are still more likely to be unemployed than newly minted college grads who studied journalism (!).

Those lucky architecture majors with postgraduate degrees who do have jobs are doing O.K., though. Among full-time, full-year workers in this group, median earnings are $71,000:

DESCRIPTIONGeorgetown University Center on Education and the Workforce American Community Survey, 2009-10, pooled sample. Recent college graduates are those 22 to 26 years old, and experienced college graduates are 30 to 54. Graduate degree holders are also limited to those 30 to 54. The percentage unemployed is based on total employed and unemployed. Earnings are based on full-time, full-year workers.

As you can see in this second chart, many of the majors that produced low unemployment rates also pay pretty well. That makes sense, when you consider that graduates of some fields are in high demand, which forces employers to offer them higher salaries.

That’s not true across the board, however.

People who majored in education, psychology and social work, for example, have low unemployment rates, but don’t make much money. Their earnings also don’t improve a lot when they gain more experience or postgraduate schooling.

“Some majors offer both high security and high earnings, while other majors trade off earnings for job security,” the report says.

Article source: http://feeds.nytimes.com/click.phdo?i=1445e477ec303b3446f24542020acfe2

Many With New College Degree Find the Job Market Humbling

Now evidence is emerging that the damage wrought by the sour economy is more widespread than just a few careers led astray or postponed. Even for college graduates — the people who were most protected from the slings and arrows of recession — the outlook is rather bleak.

Employment rates for new college graduates have fallen sharply in the last two years, as have starting salaries for those who can find work. What’s more, only half of the jobs landed by these new graduates even require a college degree, reviving debates about whether higher education is “worth it” after all.

“I have friends with the same degree as me, from a worse school, but because of who they knew or when they happened to graduate, they’re in much better jobs,” said Kyle Bishop, 23, a 2009 graduate of the University of Pittsburgh who has spent the last two years waiting tables, delivering beer, working at a bookstore and entering data. “It’s more about luck than anything else.”

The median starting salary for students graduating from four-year colleges in 2009 and 2010 was $27,000, down from $30,000 for those who entered the work force in 2006 to 2008, according to a study released on Wednesday by the John J. Heldrich Center for Workforce Development at Rutgers University. That is a decline of 10 percent, even before taking inflation into account.

Of course, these are the lucky ones — the graduates who found a job. Among the members of the class of 2010, just 56 percent had held at least one job by this spring, when the survey was conducted. That compares with 90 percent of graduates from the classes of 2006 and 2007. (Some have gone for further education or opted out of the labor force, while many are still pounding the pavement.)

Even these figures understate the damage done to these workers’ careers. Many have taken jobs that do not make use of their skills; about only half of recent college graduates said that their first job required a college degree.

The choice of major is quite important. Certain majors had better luck finding a job that required a college degree, according to an analysis by Andrew M. Sum, an economist at Northeastern University, of 2009 Labor Department data for college graduates under 25.

Young graduates who majored in education and teaching or engineering were most likely to find a job requiring a college degree, while area studies majors — those who majored in Latin American studies, for example — and humanities majors were least likely to do so. Among all recent education graduates, 71.1 percent were in jobs that required a college degree; of all area studies majors, the share was 44.7 percent.

An analysis by The New York Times of Labor Department data about college graduates aged 25 to 34 found that the number of these workers employed in food service, restaurants and bars had risen 17 percent in 2009 from 2008, though the sample size was small. There were similar or bigger employment increases at gas stations and fuel dealers, food and alcohol stores, and taxi and limousine services.

This may be a waste of a college degree, but it also displaces the less-educated workers who would normally take these jobs.

“The less schooling you had, the more likely you were to get thrown out of the labor market altogether,” said Mr. Sum, noting that unemployment rates for high school graduates and dropouts are always much higher than those for college graduates. “There is complete displacement all the way down.”

Meanwhile, college graduates are having trouble paying off student loan debt, which is at a median of $20,000 for graduates of classes 2006 to 2010.

Mr. Bishop, the Pittsburgh graduate, said he is “terrified” of the effects his starter jobs might have on his ultimate career, which he hopes to be in publishing or writing. “It looks bad to have all these short-term jobs on your résumé, but you do have to pay the bills,” he said, adding that right now his student loan debt was over $70,000.

Many graduates will probably take on more student debt. More than 60 percent of those who graduated in the last five years say they will need more formal education to be successful.

“I knew there weren’t going to be many job prospects for me until I got my Ph.D.,” said Travis Patterson, 23, a 2010 graduate of California State University, Fullerton. He is working as an administrative assistant for a property management company and studying psychology in graduate school. While it may not have anything to do with his degree, “it helps pay my rent and tuition, and that’s what matters.”

Going back to school does offer the possibility of joining the labor force when the economy is better. Unemployment rates are also generally lower for people with advanced schooling.

Those who do not go back to school may be on a lower-paying trajectory for years. They start at a lower salary, and they may begin their careers with employers that pay less on average or have less room for growth.

“Their salary history follows them wherever they go,” said Carl Van Horn, a labor economist at Rutgers. “It’s like a parrot on your shoulder, traveling with you everywhere, constantly telling you ‘No, you can’t make that much money.’ ”

And while young people who have weathered a tough job market may shy from risks during their careers, the best way to nullify an unlucky graduation date is to change jobs when you can, says Till von Wachter, an economist at Columbia.

“If you don’t move within five years of graduating, for some reason you get stuck where you are. That’s just an empirical finding,” Mr. von Wachter said. “By your late 20s, you’re often married, and have a family and have a house. You stop the active pattern of moving jobs.”

Article source: http://feeds.nytimes.com/click.phdo?i=13fef1b24340d720ebc1f9d180307acd