John did everything right.
He went to college right after high school, to the most exclusive place he could get into—a big-name research university with Nobel laureates on the faculty. He had heard about the crisis-level shortage of STEM (Science, Technology, Engineering, and Mathematics) majors [1], so he chose to major in environmental science.
John wanted to graduate in four years, so he concentrated on his schoolwork. He turned down opportunities for internships and study abroad, as they would have lengthened his time to degree. He never met any of those Nobel laureates on the faculty. They worked mainly with graduate students, it turned out; undergraduates like John never saw them.
John graduated with a decent GPA, and expected to earn enough to pay off his student loans quickly. Unfortunately, competition for the few desirable jobs was fierce, and many available positions were in remote areas. They offered no moving allowance or job security, and the pay was disappointingly low. He looked into it a little more, and found that while politicians and education pundits were still banging on about the supposed STEM shortage, 29% of graduates in his field were working part-time, and over half were in jobs that didn't require a college degree at all [2].
After a few months of job-hunting, he was out of money and options. He now works two part-time jobs. Both employers limit his hours to avoid paying benefits. Fortunately, his parents are keeping him on their health insurance...for now.
John's story is not unusual. Although fewer than five percent of recent college graduates are unemployed, an additional 45 percent work in jobs that typically don't require a college degree [3]. And as he found, it's not just the much-maligned art history (52%) or ethnic studies (51%) majors who are taking your coffee order or folding shirts at the mall. 75% of criminal justice majors and 60% of business management majors are underemployed. And it turns out there really wasn't a shortage of STEM workers after all. "Every year U.S. schools grant more STEM degrees than there are available jobs [1]."
What went wrong?
The college degree used to be rare. In 1950, only six percent of U.S. adults over 25 had a four-year degree or higher. It was a credential that really stood out. But today, around one-third of U.S. adults over 25 have a four-year degree or higher. The college degree today is exactly as "rare" as a high school diploma was in 1950 [4].
Some philanthropists and policymakers are pushing to get even more people to go to college, aiming to have up to 60% of the population holding a postsecondary degree [5]. To support this goal, they often cite a 2011 study titled The Undereducated American [6] that projected that by 2018 33% of all job openings would require a bachelor's degree or higher, while an additional 30% would require some postsecondary education. The study was published by the Georgetown University Center on Education and the Workforce, a think tank funded by the Lumina Foundation for Education, The Joyce Foundation, and the Bill & Melinda Gates Foundation [7].
That prediction turned out to be wrong. The U.S. Department of Labor projects that the percentage of positions requiring a bachelor's degree or higher will increase from 22.34% in 2012 to 22.8% in 2022, ten percentage points lower than the 33% claimed by the Georgetown researchers. The percentage of positions requiring any postsecondary education will increase from 33.69% in 2012 to 34.66% in 2022 [8].
There are too many educated Americansrelative to the number of available jobs.
Jobs requiring specified levels of educational credentials vs. number of people 25-64 holding those credentials.
Sources: census.gov/data/tables/2016/demo/education-attainment/cps-detailed-tables.html and bls.gov/opub/mlr/2013/article/occupational-employment-projections-to-2022.htm. Numbers in thousands. Civilian noninstitutionalized population.
How did the Georgetown researchers get a result so different from the Department of Labor? By assuming there is no such thing as underemployment.
"Unlike virtually any other analyst of labor market activity, the Georgetown authors define the size of the college labor market as equal to the total number of college graduates that are employed. [9]" According to the Georgetown researchers' methodology, if 15% of taxi drivers have bachelor's degrees [10], that must mean that 15% of taxi driver jobs need bachelor's degrees [9].
Had the Georgetown study been published in a peer-reviewed journal (it was not), this unorthodox methodology might not have survived to publication.
Those in favor of the college completion agenda correctly point out that college graduates occupy the highest paying jobs and therefore make more money and pay more taxes than non-grads. But then they go on to claim that increasing the overall number of college graduates will increase overall tax revenue because producing all these new graduates would somehow (it's not clear how) lead to the creation of more, better-paying jobs. That's not how "supply and demand" works.
As the production of college graduates has increased, automation, outsourcing, and a shift from permanent to temporary workers have shrunk the available supply of well-paid, permanent positions.
Most industries now have more unemployedpeople than job openings [11]
Source: EPI's analysis of data from the Job Openings and Labor Turnover Survey and the Current Population Survey. 12-month averages June 2014-May 2015. Selected industries. Numbers in millions.
Instead of everyone's wagesgoing up, college grads are now taking jobs that used to go to high schoolgraduates.
Unemployment among thosewith high school only has gone up at the same rate as college attainment. Sources:www.epi.org/publication/the-class-of-2015/ andnces.ed.gov/programs/digest/d15/tables/dt15_104.10.asp
Producing morecollege degrees hasn't magically produced more high-paying jobs. In fact, theopposite has happened. The defining problem in the U.S. job market isn't askills gap. It's that too many educated people are chasing too few jobs [12]. As education levels have increased, thepoor have simply become better-educated [13, 14].
College degrees in the job market are a positional good [15]. A positional good is defined as something that is valuable because it is scarce—the more people have it, the less it's worth [16]. Employers are taking advantage of this buyer's market by escalating degree requirements; many employers now require college degrees even for low-skilled jobs [17].
So, despite the rosy prognostications of the college-for-everyone crowd, the college degree is not a golden ticket. Think of it as a hunting license.
Why don't you hear this more often?
You may not have heard this gloomy news from your counselors or your career center. On the contrary, the career-advice industry is brimming with positivity. There's no shortage of books, inspirational posters, and desk plaques claiming that you that with the right attitude you can get paid for doing what you love. Why settle for a mere job, the gift-shop gurus ask, when you can follow your calling and fulfill your destiny?
Some unhelpful adages. Source: Your school counselor
This kind of advice is meant to be encouraging, and for some people it may be. But for others, it has the opposite effect. What if you don't have a particular passion that you yearn to pursue twenty hours a day? Are you a bad person if you actually do look forward to Fridays more than you look forward to Mondays? And are you the only one who's noticed that if you "land among the stars" you are then "adrift in outer space?"
What's wrong with following your passion?
Nothing at all—as long as you don't expect to get paid for it. Because as individual and unique as you undoubtedly are, your "passion" is probably the same as a lot of other people's. As life coach Gabrielle Loehr observes, "not everyone's passion can turn into a paying job and your bills are not going to pay themselves [18]."
Here are the numbers: Most professional writers earn less than a thousand dollars a year from their writing [19]. Fewer than one in 500 high school athletes ends up playing professionally; for basketball players it's fewer than one in 10,000 [20]. And astronauts? NASA takes fewer than 1% of applicants [21]. And if you're thinking about going into movies or politics, your chances aren't much better. [22].
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