December 21, 2024

Shortcuts: A Quest to Make College Graduates Employable

It’s that last part of the equation that I’m going to focus on. My heart sinks every time I read a news story or opinion piece quoting employers who charge that four-year colleges and universities are failing to provide graduates with the skills they need to become and remain employable.

Of course, in many ways, this isn’t a new story.

“A four-year liberal arts education doesn’t prepare kids for work and it never has,” said Alec R. Levenson a senior research scientist for the Center for Effective Organizations at the University of Southern California.

Mara Swan, the executive vice president of global strategy and talent at Manpower Group, agreed.

“There’s always been a gap between what colleges produce and what employers want,” she said. “But now it’s widening.” That’s because workplaces are more complex and globalized, profit margins are slimmer, companies are leaner and managers expect their workers to get up to speed much faster than in the past.

“Employers are under pressure to do more with less,” Ms. Swan said.

Unemployment rates for those with bachelor’s degrees or higher are still much better — at 3.8 percent in May — than those with only a high school diploma, which was 7.4 percent in May, according to the U.S. Bureau of Labor Statistics.

Nonetheless, a special report by The Chronicle of Higher Education and American Public Media’s Marketplace published in March found that about half of 704 employers who participated in the study said they had trouble finding recent college graduates qualified to fill positions at their company.

But, surprisingly, it wasn’t necessarily specific technical skills that were lacking.

“When it comes to the skills most needed by employers, job candidates are lacking most in written and oral communication skills, adaptability and managing multiple priorities, and making decisions and problem solving,” the report said.

Jaime S. Fall, a vice president at the HR Policy Association, an organization of chief human resources managers from large employers, said these findings backed up what his organization was hearing over and over from employers.

Young employees “are very good at finding information, but not as good at putting that information into context,” Mr. Fall said. “They’re really good at technology, but not at how to take those skills and resolve specific business problems.”

This isn’t a dilemma just in this country, but around the world, Ms. Swan said. A global study conducted last year of interviews with 25,000 employers found that nine out of 10 employees believed that colleges were not fully preparing students for the workplace.

“There were the same problems,” she said. “Problems with collaboration, interpersonal skills, the ability to deal with ambiguity, flexibility and professionalism.”

But it’s easy for the issue to degenerate into finger-pointing.

“If you sat down with a committee of professors, and told them students are not coming out with the skills they need, they would say, ‘you’re smoking something,’ ” Mr. Levenson said. “The trouble is, those skills are applied in a college context, not a workplace context.”

But, he added, “you can’t create a school-based curriculum that can help someone transition to being highly productive on the job in 10 days.”

In other words, the onus shouldn’t just be on universities; employers also need to step up to the plate.

The in-depth training programs and apprenticeships of the past are unlikely to come back, so companies must become more innovative in helping young employees come up to speed, according to a report released in May by Accenture, a management consulting and outsourcing company.

“Rather than simply bemoaning the inability to find employees with the skills required for available jobs, organizations must step up with new and more comprehensive enterprise learning strategies,” Accenture stated in a summary of The Accenture 2013 College Graduate Employment Survey, which queried 1,010 students graduating from college in 2013 and 1,005 who graduated in 2011 and 2012.

The problem, it said, is that most recent college graduates expect employers to provide on-the-ground training, but most of them don’t actually receive it.

E-mail: shortcuts@nytimes.com

Article source: http://www.nytimes.com/2013/06/29/your-money/a-quest-to-make-college-graduates-employable.html?partner=rss&emc=rss

Economix Blog: The Premium From a College Degree

11:11 a.m. | Updated to include correct chart.

The unemployment rate ticked up to 7.6 percent while employers added about 175,000 new jobs in May, new Labor Department data showed this morning. But the economy feels very different depending on your level of educational attainment. For workers over the age of 25 who have a bachelor’s degree, the unemployment rate is 3.8 percent. For workers without a high school diploma, it is 11.1 percent.

Still, in recent years, the burden of student-loan debt has raised questions about whether college is really worth it – particularly if a given person goes to college, takes on significant amounts of debt, but does not get diploma. New research from the Hamilton Project, a research group based at the Brookings Institution, says that on average, the answer is still yes.

The so-called college wage premium – economists’ fancy way of saying how much more workers with a college degree are paid than other workers without one – has widened over the last three decades. Degree-holders earn more than 80 percent more than their peers with just a high school diploma, up from about 40 percent more as of the late 1970s.

But millions of students attend college without graduating, and the workplace does not reward them nearly as richly. Their unemployment rate is 6.5 percent. And while they tend to earn more than workers with just a high school diploma, they make less than workers with a full degree. (For a nuanced take on this issue, read my colleague Jason DeParle’s long-form article from December.)

“The premium for these workers has experienced little to no growth over the last 30 years, where at the median they have about 15 percent to 20 percent higher earnings,” said an analysis by the Federal Reserve Bank of Cleveland released last year. “Collectively, these results show that over the last three decades, the value of college has increased substantially,” with all of the gains going to those who actually complete the four-year degree.

Still, the Hamilton analysis argues that it’s better to pay something for a little post-secondary education than it is to pay nothing for none – even given the rise in college costs. Students who go to but do not graduate from college still earn about $100,000 more over the course of their lifetimes than their high school-educated peers, the authors calculate.

The rate of return on that investment in school “exceeds the historical return on practically any conventional investment, including stocks, bonds, and real estate,” find the scholars, Adam Looney and Michael Greenstone, who also is a professor at the Massachusetts Institute of Technology.

Granted, that student is still much, much better off with a college degree. Over a lifetime of work, on average, a college graduate would earn over $500,000 more than a worker with just a high school diploma.

Article source: http://economix.blogs.nytimes.com/2013/06/07/the-premium-from-a-college-degree/?partner=rss&emc=rss

Economix Blog: Yes, Even Young College Graduates Have Low Unemployment

CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

I’ve written recently about the job prospects for college graduates versus those without bachelor’s degrees, noting that the unemployment rate for college graduates is about half that for workers with no more than a high school diploma (3.7 percent versus 8.1 percent as of January). Several readers wrote me to take issue with the fact that I was looking at the whole universe of workers with these credentials, rather than just the recently graduated. Perhaps college graduates from generations past are more protected than those just entering the work force, they wrote, and it is misleading to say that young graduates are equally secure.

It is true that young workers have higher unemployment rates than their older counterparts, at just about all levels of education. A recent report published by the Bureau of Labor Statistics on the job prospects of new college graduates, for example, found that as of October 2011, the graduates of the class of 2011 had an unemployment rate of 14 percent.

But that number refers to joblessness just a few months after graduation. If you look at all recent college graduates in their 20s, the unemployment rate drops sharply. It is especially impressive when compared with the jobless rate for all high school graduates in the same age group.

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.

As you can see, 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.

Here are comparable numbers for the employment-population ratio, or the share of people within each population who have a job (as opposed to being unemployed or not looking for work at all).

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.

The data are from Thomas Luke Spreen, who wrote the Labor Department report mentioned above. His numbers are culled from the 2011 October School Enrollment Supplement, an annual supplement to the Current Population Survey. (The Bureau of Labor Statistics’ public data on unemployment by educational attainment usually covers all workers 25 or older only, rather than narrower or younger ranges of workers.)

Of course, many of those college-educated 20-somethings are getting jobs that don’t really require college-level skills. But at least they’re finding work, unlike their less-educated peers. And as the economy continues to improve, those recent college graduates will be better situated to find promotions to jobs that do use their higher skills and pay better wages.

Article source: http://economix.blogs.nytimes.com/2013/03/05/yes-even-young-college-graduates-have-low-unemployment/?partner=rss&emc=rss

College Degree Required by Increasing Number of Companies

Consider the 45-person law firm of Busch, Slipakoff Schuh here in Atlanta, a place that has seen tremendous growth in the college-educated population. Like other employers across the country, the firm hires only people with a bachelor’s degree, even for jobs that do not require college-level skills.

This prerequisite applies to everyone, including the receptionist, paralegals, administrative assistants and file clerks. Even the office “runner” — the in-house courier who, for $10 an hour, schleps documents back and forth between the courthouse and the office — went to a four-year school.

“College graduates are just more career-oriented,” said Adam Slipakoff, the firm’s managing partner. “Going to college means they are making a real commitment to their futures. They’re not just looking for a paycheck.”

Economists have referred to this phenomenon as “degree inflation,” and it has been steadily infiltrating America’s job market. Across industries and geographic areas, many other jobs that didn’t used to require a diploma — positions like dental hygienists, cargo agents, clerks and claims adjusters — are increasingly requiring one, according to Burning Glass, a company that analyzes job ads from more than 20,000 online sources, including major job boards and small- to midsize-employer sites.

This up-credentialing is pushing the less educated even further down the food chain, and it helps explain why the unemployment rate for workers with no more than a high school diploma is more than twice that for workers with a bachelor’s degree: 8.1 percent versus 3.7 percent.

Some jobs, like those in supply chain management and logistics, have become more technical, and so require more advanced skills today than they did in the past. But more broadly, because so many people are going to college now, those who do not graduate are often assumed to be unambitious or less capable.

Plus, it’s a buyer’s market for employers.

“When you get 800 résumés for every job ad, you need to weed them out somehow,” said Suzanne Manzagol, executive recruiter at Cardinal Recruiting Group, which does headhunting for administrative positions at Busch, Slipakoff Schuh and other firms in the Atlanta area.

Of all the metropolitan areas in the United States, Atlanta has had one of the largest inflows of college graduates in the last five years, according to an analysis of census data by William Frey, a demographer at the Brookings Institution. In 2012, 39 percent of job postings for secretaries and administrative assistants in the Atlanta metro area requested a bachelor’s degree, up from 28 percent in 2007, according to Burning Glass.

“When I started recruiting in ’06, you didn’t need a college degree, but there weren’t that many candidates,” Ms. Manzagol said.

Even if they are not exactly applying the knowledge they gained in their political science, finance and fashion marketing classes, the young graduates employed by Busch, Slipakoff Schuh say they are grateful for even the rotest of rote office work they have been given.

“It sure beats washing cars,” said Landon Crider, 24, the firm’s soft-spoken runner.

He would know: he spent several years, while at Georgia State and in the months after graduation, scrubbing sedans at Enterprise Rent-a-Car. Before joining the law firm, he was turned down for a promotion to rental agent at Enterprise — a position that also required a bachelor’s degree — because the company said he didn’t have enough sales experience.

His college-educated colleagues had similarly limited opportunities, working at Ruby Tuesday or behind a retail counter while waiting for a better job to open up.

“I am over $100,000 in student loan debt right now,” said Megan Parker, who earns $37,000 as the firm’s receptionist. She graduated from the Art Institute of Atlanta in 2011 with a degree in fashion and retail management, and spent months waiting on “bridezillas” at a couture boutique, among other stores, while churning out office-job applications.

“I will probably never see the end of that bill, but I’m not really thinking about it right now,” she said. “You know, this is a really great place to work.”

Article source: http://www.nytimes.com/2013/02/20/business/college-degree-required-by-increasing-number-of-companies.html?partner=rss&emc=rss

Economix Blog: Gender Gap on Wages Is Slow to Close

First, there was the “mancession” that made the downturn much worse for men. Then, what my colleague Catherine Rampell has called the “he-recovery,” which has put more men than women back to work. What has remained consistent is that women remain on the wrong side of the wage gap.

Even with the same college and professional degrees, men earn more than women. And among so-called creative class workers like architects, teachers, artists, engineers, bankers and journalists, men earn much more than women, even though more women hold such jobs.

It’s similar at the bottom end of the scale. According to a report issued Thursday by the United States Government Accountability Office, a higher proportion of women finish high school than men, a milestone that is a minimum requirement for any job mobility. Women — especially younger women — are also completing bachelor’s degrees at higher rates than men. Yet they represent a higher proportion of low-wage workers, defined in the report as those who earn hourly wage rates that put them in the bottom 20 percent of the work force.

Source: Government Accountability Office analysis of Current Population Survey data

So although women make up 49 percent of the total work force, they represent 59 percent of low-wage workers. (That is down from 63 percent a decade ago.)

When women do not complete high school, they earn less than men who do not have a high school diploma. Undereducated women tend to congregate in occupations that pay less than those taken by men. Women are highly represented in health care and social assistance, for example, where their average wages are about $14 an hour. Men take jobs in construction, transportation or utilities, where their average wages are more than $19 an hour.

Yet such occupational variations cannot fully account for the wage gap. Neither can the fact that women are more likely to work part time than men.

Adjusted for factors that could affect pay, like age, race, education, number of children in the household and part-time status, women earn 86 cents for every $1 earned by men. That’s up from 81 cents in 2000.

Source: Government Accountability Office analysis of Current Population Survey data

But the study, based on an analysis of Labor Department data, could not determine whether other factors, like previous work experience or other choices made by women in the workplace, were keeping their wages from achieving closer parity, or whether there was still some other discriminatory effect.

Senator Robert P. Casey Jr., chairman of the Joint Economic Committee of Congress, which commissioned the G.A.O. report, said that he was surprised that despite higher levels of education, the gap between men’s and women’s pay hadn’t narrowed much more. “I would have said we would have seen more progress,” said Senator Casey, a Pennsylvania Democrat.

He said the findings made the need for Congressional action on job creation more acute. “Every week that goes by where you don’t have progress on those measures is obviously going to make the situation worse for everyone,” he said. “But low-wage workers are having some of the most difficult challenges, and those challenges just get more significant.”

Article source: http://feeds.nytimes.com/click.phdo?i=6b61f30cf8c20c7453655c40448fe5d7

Economix Blog: College Is Worth It

We get a lot of questions (complaints, really) about whether college is worth the money, given how much it costs. If our previous reporting on the lower unemployment rates for college grads hasn’t convinced you, maybe this chart from the Federal Reserve Bank of Cleveland will:

DESCRIPTIONSource: Dionissi Aliprantis, Timothy Dunne and Kyle Fee, Federal Reserve Bank of Cleveland.

Not only do college grads earn significantly more than people whose highest educational attainment is a high school diploma, but that wage premium has been steadily increasing, to almost twice as much in 2010.

Article source: http://feeds.nytimes.com/click.phdo?i=6f61b2ec13c3dbef0da650bbc0a9e911

Economix: How Worrisome Is Student Debt?

Today's Economist

Judith Scott-Clayton is an assistant professor at Teachers College, Columbia University.

Student loan debt has risen to its highest level ever, with starting balances averaging $24,000 among the two-thirds of graduates who borrowed for their degree, Tamar Lewin noted in an article in The New York Times on Monday. This increase has heightened longstanding concerns that college students are borrowing too much.

Economists tend to be less troubled by the trend, Ms. Lewin noted, viewing student loan debt as a worthwhile investment that pays off over a lifetime. Many economists even raise the concern that an irrational aversion to debt may lead some capable students to forgo college.

So should we stop worrying about student debt? Or are students and their families right to be alarmed? The key question is this: Are graduates better off, even with all that debt, than if they hadn’t gone to college at all?

The answer seems clear: even with $24,000 in debt — comparable to the cost of a new midsize car — the average four-year college graduate is likely to be substantially better off over the long term than someone with only a high school education, data show.

Median annual earnings for full-time workers with a bachelor’s degree are around $53,000, compared with $33,000 for those with a high school diploma, and unemployment rates among college graduates are just over half of the rates for those without a degree.

Yet there are at least three reasons this level of debt may be troubling.

First, while the returns to a college degree accrue over a lifetime, loan repayments are typically expected within 10 years of graduation. And graduates don’t typically earn $53,000 in their first year of employment; it may take a decade or more to reach this level. The median graduate is likely to start out somewhere closer to $35,000.

Earnings were calculated using October data, 1999-2008, on individuals with only a bachelor's degree who were employed full-time and not enrolled in school.Current Population Survey, Census Bureau Earnings were calculated using October data, 1999-2008, on individuals with only a bachelor’s degree who were employed full time and not enrolled in school.

Second, not every graduate will get the average outcome. For those who do worse, the debt may be particularly burdensome. And it is not easy for students (or even economists) to predict what the economy will be like several years from now, or how any individual will fare in it.

So while it may be an excellent investment on average, there is a real risk that some graduates with $24,000 of debt will face unmanageable monthly payments particularly in the early years of their careers.

On the standard 10-year repayment schedule with a fixed interest rate of 6.8% (the current rate for unsubsidized federal student loans), monthly payments would be about $276. If payments up to 10 percent of gross monthly income are considered affordable, then a graduate would need to earn $33,000 annually to comfortably manage this debt. Most will do so, but many will not.

Third and perhaps most important, not every borrower will graduate. Among 2003-4 college entrants who ultimately borrowed $22,000 or more, 31 percent did not have any postsecondary credential six years later (see chart below). And unemployment rates and earnings for people with “some college, no degree” look much more similar to those with only a high school diploma than they do to bachelor’s degree recipients.

U.S. Department of Education, National Center for Education Statistics, BPS: 2009 Beginning Postsecondary Students

Luckily, federal loans have options beyond the 10-year repayment plan, and many students take advantage of them. Graduated, extended or income-contingent repayment plans may offer substantially lower monthly payments, with repayment periods of up to 25 years (see these loan repayment calculators offered by Mark Kantrowitz of www.finaid.org).

Policy changes tucked into last year’s health care act also strengthened protections for those who face economic hardships.

These additional options and protections — which apply only to federal loans, not private loans — reduce but do not eliminate the risk students take when they borrow for their education. So anxiety is likely to continue because, frankly, this stuff is complicated, and the consequences of defaulting on a student loan are severe.

Plenty of resources are available to help students learn how to borrow responsibly. But some, like this 56-page federal guidebook, may be too much for young adults to digest, given high rates of financial illiteracy. Those who try to navigate these resources on their own may come away feeling frightened rather than informed.

Policies like the one at Tidewater Community College in Virginia, which require students to estimate their loan repayments and plan their budgets before taking a loan, may be the best strategy for promoting wise borrowing decisions.

No one is ever going to love their student loans. But we don’t want students to be afraid of them, either — because forgoing a college degree may be the biggest risk of all.

Article source: http://feeds.nytimes.com/click.phdo?i=5aeb9f75152d35ca127df0cd5702c084