New York Federal Reserve Bank report: Many college grads underemployed

11 Aug

One Tennessee Study found that quite often kids are encouraged to choose college over vocational or trade options. The societal push the last few years has been to have more kids go to college. Quite often schools are ranked on the percentage of kids that go directly to college from high school. So, counselors are following cultural cues they have received from administrators, parents, and the media. The Pew Research Center has a report, Is College Worth It? Amanda Paulson of the Christian Science Monitor has a great article, Does Everyone Need A College Degree? Maybe Not Says Harvard Study about a Harvard study.

A new report released by Harvard Wednesday states in some of the strongest terms yet that such a “college for all” emphasis may actually harm many American students – keeping them from having a smooth transition from adolescence to adulthood and a viable career.
“The American system for preparing young people to lead productive and prosperous lives as adults is clearly badly broken,” concludes the report, “Pathways to Prosperity” (pdf).

Harvard has quite a bit of press about the report. Jill Anderson wrote the press release, Pathways to Prosperity Seeks to Redefine the American Education System which is at the Harvard site. The point of the report is whether there should be a variety of post-high school paths and not just the focus on a B.A. Still, there should be post-high school training which would provide additional skills.

One of the goals of education is to give the student sufficient basic skills to be able to leave school and be able to function at a job or correctly assess their training needs. One of the criticisms of the current education system is that it does not adequately prepare children for work or for a career. A liberal arts education has been considered the gold standard. A Washington Post article has some good tips about how a liberal arts education could be made valuable in the current economic climate.

Andy Chan, vice president of the Wake Forest University Office of Personal and Career Development, and Jacquelyn S. Fetrow, Reynolds Professor of Computational Biophysics and dean of Wake Forest College wrote in the Washington Post about producing employable liberal arts grads. In the article, Six tips for liberal arts colleges to produce employable grads, Chan and Fetrow give the following advice:

Here are a few recommendations for liberal arts colleges to more deeply realize and communicate the value of the liberal education for the world of work today:
• Develop partnerships that bridge the career development office with the faculty and academic advisors. Students demand to know how their choice of major will affect their career options. By sharing these data and student examples with the faculty and academic advisors, the career development office becomes more vital to students and to the faculty. With the endorsement and influence of the faculty, students utilize the complete range of resources offered by the career development office starting from their first year on campus.
• Provide opportunities for faculty to understand the needs of employers. When professors understand why employers hire certain students, they can articulate how the academic material can be applied variety of work settings and help students recognize and better market this knowledge and skills. They can also more effectively mentor students and provide career advice and connections.
• Make internships and/or research projects an integral part of the student experience. Make sure the student demonstrates the drive to stick with a research problem for longer than a semester. A survey by the Association of American Colleges and Universities found that 84 percent of executives at private sector and non-profit organizations expressed a desire for students to complete a significant project before graduation to demonstrate their depth of knowledge and a passion for a particular areas, as well as their acquisition of broad analytical, problem solving and communication skills.
• Offer credit-based courses in career development so that students learn the fundamentals for lifelong career management. With projections that today’s graduate will have eight or more jobs in their life, they must be equipped with the knowledge, skills and tools to navigate the path from college to career as well as post-graduate career changes.
• Bring recent alumni from a variety of careers to campus and perhaps into the classroom to share their experiences for how they utilize their liberal education. Today’s students expect immediate answers and a direct line from major to career. At Wake Forest University, history professors require their students to participate in teleconferences with alumni who applied their bachelor’s degree in history to relevant but not directly related fields, such as journalism, law and marketing. Understanding the breadth of real-world opportunities dispels the myth that all history – and other liberal arts – majors are destined to become professors.
• Develop partnerships between the liberal arts college and the business school to enable faculty and students to work and learn across boundaries. Entrepreneurship and Social Enterprise, now the most popular minor at Wake Forest, emerged from a college-business school collaboration. Alternatively, many students choose to acquire the Masters in Management degree at Wake Forest in their fifth year to develop the business knowledge and leadership skills to complement their liberal undergraduate education. These types of partnerships are essential to provide students with the skills to apply their liberal arts skills to business-world problems.
There are many possible solutions to help students realize and articulate the relevancy of the liberal education to the world of work. The one requirement is that liberal arts colleges must make personal and career development a mission-critical part of the undergraduate experience – and they must collaborate with faculty in the endeavor.
A liberal arts education, long regarded as one of America’s unique sources of strength, remains an important vehicle for nurturing young talent who will produce the answers for our future. However, a liberal education without regard to career relevance is not enough. Liberal arts colleges must begin rethinking success by demonstrating relevance beyond the classroom.

In the current economy more and more prospective students are wondering if college is a good investment.

Jill Barshay of The Hechinger Report reported in the article, Reflections on the Underemployment of College Graduates:

Most people — and especially parents of 20-something college graduates — know that the job market is particularly tough right now for recent college grads. But so tough that about half of them are either unemployed or underemployed?
That is what analysts for the New York Federal Reserve Bank of New York calculated, in a January, 2014, report, “Are Recent College Graduates Finding Good Jobs?” Defining “underemployed as working in low-paid jobs that don’t require college degrees, the analysts, Jaison R. Abel, Richard Deitz, and Yaqin Su, found that roughly 6 percent of recent college graduates, aged 22 to 27, were unemployed at the beginning of 2013 and 44 percent were underemployed. The unemployment figure has likely dropped since then, along with the overall drop in unemployment. But it’s quite possible that underemployment — the percentage of college grads who are in jobs that don’t require college degrees — hasn’t changed much.
Curiously enough, this New York Fed study was largely a rebuttal to the popular notion that the job market is much worse for college grads today. The authors looked at two decades of data and found that the combination of unemployment and underemployment is roughly the same today as it was for college graduates in the early 1990s who also had to seek jobs during a recession. By age 30, the majority of the 1990s cohort eventually found better work, and the same could happen for the current crop of college graduates.
But the authors also pointed to some ominous signs. They drilled down into the data of the underemployed and noted that it’s more likely for recent graduates to be in a low-wage or a part-time job than in the past. In other words, there’s a smaller share of college graduates in well-paying non-college jobs, such as electrician, dental hygienist or mechanic. And there’s a rising share of college graduates in the lowest paid of the non-college jobs, such as bartender, food server and cashier. That could make it harder for these young adults to transition to higher skilled jobs in the next few years. Time will tell.
Harvard professor Richard B. Freeman, one of the leading U.S. labor economists, wrote that he believes things are also worse now for American college graduates because of international competition. “The college graduate situation has a global dimension — 6 million bachelor’s graduates in China that affect the U.S. market as well — which is very different than in the past,” he wrote.
It’s worth pausing a moment to understand how economists think about underemployment, an admittedly fuzzy term. The New York Federal Reserve used the Department of Labor’s O*Net surveys. If at least 50 percent of the respondents working in a particular occupation say it requires a college degree, then the New York Fed labeled the occupation a college job. And it called a college graduate “underemployed” if he or she worked in a job for which less than half the respondents said a bachelor’s degree was necessary. Under this definition, every college-educated real estate broker, registered nurse and Shakespearean actor is classified as underemployed.
Sometimes fields change and become more sophisticated. Twenty years ago, some jobs didn’t require college degrees that now do. Journalism is one where many people didn’t have a college degree a couple generations ago. Now, even O*Net says reporters need a college degree. One question interesting labor economists is whether the employers hiring young adults can be more selective than the job itself warrants, and can demand college degrees simply because they have an excess of college graduates to choose from. Many elementary schools in the New York City area, for example, have the luxury of being able to demand that any teacher’s aide have a B.A. But O*Net says that the degree isn’t necessary for that job. Over time, that could change, if enough teacher’s aides respond that a college degree is necessary to be a teacher’s aide, even though you could perform the job superbly without one….
Reflections on the Underemployment of College Graduates – Higher Education

A college degree is no guarantee of either employment or continued employment. Still, because of the economic uncertainty there is an “arms race” in education. Laura Pappano reported in the New York Times article, The Master’s As the New Bachelor’s Whether a person chooses to attend a four year college after high school is a very personal decision and there is no one right answer. One thing the current economic climate has taught many is there are no guarantees in life, even with a college degree.


A publication by the government Why Attend College? Is a good overview

Article in USA Today about gap year

Advantages of Going to a Vocational School

Accrediting Commission of Career Schools and Colleges of Technology

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