Although the U.S. economy is recovering, the addition of many low-wage jobs is causing a surprising trend among college graduates. According to a study by McKinsey & Company, almost half of college graduates are working in jobs that do not require a degree (McKinsey & Company, May 2013). This is leading many to question whether or not investing in higher education is the best course of action for young adults.
College graduates seem to be doing well according to their unemployment rate, which was only 3.9 percent in April, nearly half of the national unemployment rate. However, the jobs that many graduates hold require no more than a high school education, and some of them don't even require that much. Labor industries, which don't often require any education past high school, have been among those adding the most jobs, according to recent Bureau of Labor Statistics reports.
The fact that college graduates are now stepping into jobs for which they are overqualified is not all bad; the economy is still recovering and jobs are still being filled. However, most graduates find themselves saddled with thousands of dollars in education loans from the government and from private lenders. On top of that, most of the jobs graduates are filling pay minimum wage or only slightly better. This puts more financial pressure on graduates, as their entire paychecks are spent on living expenses and paying back debt for an education that seemed to promise a better job. This limits the amount of money they can contribute to the economy by making large purchases and buying homes.
Those with an associate's degree or higher still have the upper hand when it comes to the labor force, even if these jobs pay less. With this trend comes an even more unsettling set of data, which shows that while these college-educated workers are taking lower-paying jobs, those who have less education are being pushed out of the workforce altogether. Uneducated workers make up a smaller percentage of hourly workers now than in 2002 (The Wall Street Journal, 3/30/13). Therefore, while it is encouraging that college graduates can still manage to find work in a tough economy, it shows no promise for those with no education.
The economy's recovery in relation to lower-wage labor jobs may still be a good thing since those new workers will need supervisors and managers, jobs that educated workers can fill or be promoted into. This will open up more jobs for those with less education. This is likely why many Americans still believe a college education is valuable. Considering these trends, it is becoming clearer that the younger generations' college degrees act much like their parents' high school diplomas. In order to find work at all, some education beyond high school is desirable, even if the jobs being filled are not those typically thought of as requiring secondary education.
Readers: Does your job require a four-year degree?