Tag Archives: College Education

Green Shoots for Young Worker Job Prospects in 2011?

4 Jan

From PBS Newshour last night:

Happy New Year? Job Market Looking Up for College Grads?

Editor’s Note: A poor economy does not bode well for college grads trying to enter the job market.

“The last couple of years have been a very, very tough time to be coming out of college,” said Richard White in our second piece on malemployed grads, airing tonight on the NewsHour.

Head of career services at Rutgers, the State University of New Jersey, White said he’d recently seen the number of students with a job at graduation cut in half. Our piece earlier last month profiling four recent grads struggling to find paying jobs — let alone jobs in their fields of study — fits right in with what White is seeing. (That piece and a web profile of the four job hunters sparked some interesting comments and mail. The idea of getting a degree seems to have hit on a sensitive nerve.)

But things might be looking up for 2011 graduates according to “Recruiting Trends,” an annual report put out by Michigan State University (emphasis original):

“Despite the gloomy national labor market situation, the college segment of the market is poised to rebound this year. While overall hiring across all degrees is expected to increase 3%, hiring at the Bachelor’s level is expected to surge by 10%.”

From the Michigan State University study:

Over 1,600 companies indicated that they would consider any major for a position. Representing 36% of all respondents, this figure is at a historic high. For all technical and business majors, approximately one-quarter of the employers will be seeking them (a slight decrease from last year). Sixteen percent of the employers will seek all liberal arts majors, which includes the sciences, social sciences, and humanities, and will actually hire more new graduates than the other groups.

  • All Majors: increase hiring 13%, averaging 38 Bachelor graduates per company.
  • All Technical: increase hiring 19%, averaging 24 Bachelor graduates per company.
  • All Business: increase hiring 18%, averaging 34 Bachelor graduates per company.
  • All Liberal Arts: increase hiring 21%, averaging 40 Bachelor graduates per company.

Read the full report here.

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NYT Editorial on Combating Inequality

14 Dec
December 13, 2010

College, Jobs and Inequality

Searching for solace in bleak unemployment numbers, policy makers and commentators often cite the relatively low joblessness among college graduates, which is currently 5.1 percent compared with 10 percent for high school graduates and an overall jobless rate of 9.8 percent. Ben Bernanke, the chairman of the Federal Reserve, cited the data recently on “60 Minutes” to make the point that “educational differences” are a root cause of income inequality.

A college education is better than no college education and correlates with higher pay. But as a cure for unemployment or as a way to narrow the chasm between the rich and everyone else, “more college” is a too-easy answer. Over the past year, for example, the unemployment rate for college grads under age 25 has averaged 9.2 percent, up from 8.8 percent a year earlier and 5.8 percent in the first year of the recession that began in December 2007. That means recent grads have about the same level of unemployment as the general population. It also suggests that many employed recent grads may be doing work that doesn’t require a college degree.

Even more disturbing, there is no guarantee that unemployed or underemployed college grads will move into much better jobs as conditions improve. Early bouts of joblessness, or starting in a lower-level job with lower pay, can mean lower levels of career attainment and earnings over a lifetime.Graduates who have been out of work or underemployed in the downturn may also find themselves at a competitive disadvantage with freshly minted college graduates as the economy improves.

When it comes to income inequality, college-educated workers make more than noncollege-educated ones. But higher pay for college grads cannot explain the profound inequality in the United States. The latest installment of the groundbreaking work on income inequality by the economists Thomas Piketty and Emmanuel Saez shows that the richest 1 percent of American households — those making more than $370,000 a year — received 21 percent of total income in 2008. That was slightly below the highs of the bubble years but still among the highest percentages since the Roaring Twenties.

The top 10 percent — those making more than $110,000 — received 48 percent of total income, leaving 52 percent for the bottom 90 percent. Where are college-educated workers? Their median pay has basically stagnated for the past 10 years, at roughly $72,000 a year for men and $52,000 a year for women.

A big reason for the huge gains at the top is the outsize pay of executives, bankers and traders. Lower on the income ladder, workers have not fared well, in part because health care has consumed an ever-larger share of compensation and bargaining power has diminished with the decline in labor unions.

College is still the path to higher-paying professions. But without a concerted effort to develop new industries, the weakened economy will be hard pressed to create enough better-paid positions to absorb all graduates.

And to combat inequality, the drive for more college and more jobs must coincide with efforts to preserve and improve the policies, programs and institutions that have fostered shared prosperity and broad opportunity — Social Security, Medicare, public schools, progressive taxation, unions, affirmative action, regulation of financial markets and enforcement of labor laws.

College is not a cure-all, but it will certainly take the best and brightest minds to confront those challenges.

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Who Is to Blame for Student Debt?

3 Jun

Readers of Young Workers Movement likely already know the answer to that question: the rising cost of higher education, combined with a labor market that values that high-priced education possibly regardless of quality.

However, Ron Lieber in a New York Times’ column last week placed the blame with students for failing to properly consider the cost of college when enrolling and their colleges for failing to counsel them.  His argument is that smart students and their parents should better assess what taking out substantial student loans will mean to their future financial situation.  Fair enough.  $100,000 in student loan debt – which is nearly impossible to default on in bankruptcy court – should set-off some alarm bells.  But that’s your #1, top-pick choice of school, that is both academically stimulating and socially engaging, money seems not to matter.  Besides, society tells you to go to the best college you can get into, and, as a general trend, the higher ranked schools cost more.

Lieber also argues college admissions counselors should talk with students about their ability to afford the school, which might bring them back to reality.  There is a reason college admissions counselors do not look at financial statements – having nothing to do with the awkward inappropriateness of that conversation, which Lieber dismisses.  Admissions departments do not have financial information because it could then potentially be used in determining enrollment.  How could schools then be prevented from only choose the rich kids so as to avoid enrolling anyone that would need financial aid?  There are already too many challenges facing low-income students, having to convince admissions counselors that spending a few financial aid dollars on them is a good investment, shouldn’t be a part of the equation.

So what do we need to do?  We need to change the system.  The federal government’s transformation of the student financial loan system is a great first step, as it will increase the value of federal aid and stop paying big banks what the government could do itself.  The financial reform bill in conference right now is also a great step, as it will put some oversight over the big banks dolling out private loans.

The answer is taking the cost out of college.  Imagine a system of higher education where money does not determine if or where you enroll, does not drive the quality of the education nor does it harm your ability to be a self-sustainable, financially-sound young worker when you graduate.  Rather than continue to subsidize the cost of college through grants and loans, the federal government should look to subsidize the cost of college by giving those grants to the colleges directly.  Invest directly in the schools, not the students.  The status quo allows for the cost spiral to continue escalating upwards without breakers.  The closest thing we have in the US to this system is the public college system of state and community facilities of higher education, but it is under attack by budget cuts.  Change of this magnitude will be difficult to come because of the degree of corporatization of higher education, but in the meantime blaming the students won’t help.  Blame the system they are caught up in.

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Value of College Part 3

1 Jun

Rebecca Mead with the New Yorker chimed into the debate on the cost of college and if college degrees are for everyone in this week’s issue, arguing that we need to consider the sources and remember that college is meant to bring more than just a larger paycheck.

She correctly points out that the very people making the argument to deny many students the pathway to college, are post-college graduates.  Professor Richard K. Vedder of Ohio University has a Ph.D. from the University of Illinois and Professor Robert I. Lerman of American University has Ph.D. from M.I.T.  Additionally, many of the anti-intellectual advocates who supported Sarah Palin or George W. Bush, were themselves very well educated.

More importantly, they are only looking from the baseline, raw salary perspective.  In deciding college is not useful or worth the money for say letter carriers, they fail to think about what is self-fulfilling or makes for an educated citizen.  “One needn’t necessarily be a liberal-arts graduate to regard as distinctly and speciously utilitarian the idea that higher education is, above all, a route to economic advancement.”

Providing students more pathways that do not include college is not in itself a bad thing.  But there needs to be clear pathways, guided by real training and certificate programs, to good jobs for non-college youth.  These pathways, in addition to providing the opportunity for economic advancement, must provide some opportunity for less pragmatic learning as well.

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Value of College By the Numbers

17 May

One of the themes that has constantly emerged is the growing wage gap between those with a college degree and those without.  On the New York Times Economix blog this morning David Leonhardt goes through the numbers…

May 17, 2010, 9:08 am

<!– — Updated: 12:22 pm –>

The Value of College


By DAVID LEONHARDT

A small group of economists and education experts argue that college is overrated. They say that many students who go to college today should not be doing so. An article in The New York Times on Sunday laid out the case that these education skeptics make:

“It is true that we need more nanosurgeons than we did 10 to 15 years ago,” said Prof. [Richard] Vedder, founder of the Center for College Affordability and Productivity, a research nonprofit in Washington. “But the numbers are still relatively small compared to the numbers of nurses’ aides we’re going to need. We will need hundreds of thousands of them over the next decade.”

And much of their training, he added, might be feasible outside the college setting.

College degrees are simply not necessary for many jobs…

This argument certainly makes some important points. If nothing else, it’s a good reminder that many colleges are failing at their central mission: turning students into graduates. As a result, some students end up with thousands of dollars in debt and no degree.

But is the lesson of this failure that we should try to lift graduation rates? Or that we should persuade more teenagers not to enroll in college?

I think the answer lies in the most straightforward data of all: the relative pay of college graduates and everyone else. Imagine for a minute that the gap between the pay of college graduates and everyone else had been shrinking in recent years. In that case, you can be certain that Professor Vedder and the other skeptics would be pointing to these numbers as a sign that college degrees were losing their value. But the skeptics tend not to talk very much about the pay gap.

So here are the inflation-adjusted median weekly pay numbers from the Bureau of Labor Statistics for the four main educational-attainment groups, going back to 1979:

As you can see, the real pay of college graduates has risen over the past 25 years. The real pay of every other group has dropped.

This chart makes the comparison even more starkly:

Relative to everyone else, college graduates have never done better than they are doing right now. In absolute terms, of course, they too have been hurt by the deep recession that began in late 2007. But they have suffered much less, on average, than workers with less education. They have been less likely to lose their jobs, and their paychecks have survived the downturn much better.

It’s theoretically conceivable that these trends have nothing to do with the actual education that college students receive. Perhaps graduates gain little or nothing from college that they didn’t already know — but the economy has been changing in ways that favor the kinds of people who enroll in college and make it through. In that case, the charts above would say nothing about the college.

As it happens, though, labor economists have spent years trying to answer this exact question, devising careful studies to see whether students actually benefit from college. The answer, in a nutshell, is that they do. This is a nice example of Ockham’s Razor: the simplest explanation is often the correct one.

To put it another way, if you were an 18-year-old trying to decide whether to go college in the fall, would you be willing to bet your future on the idea that the charts above are simply reflecting a big coincidence?

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