Since 1990, the share of college graduates who are underemployed — those with a bachelor’s degree or higher that work in job that doesn’t require a four-year degree — has held fairly constant at around 33%. But new research from the Federal Reserve Bank of New York shows that underemployment among recent college grads has been on an upward trajectory since the start of the 2001 recession (with a few momentary improvements).
In 2012, roughly 44% of college-educated workers aged 22 to 27 in the United States were underemployed. That’s according to a paper released this week from the New York Fed entitled “Are Recent College Graduates Finding Good Jobs?”
These are sobering trends. However, for graduates who major in technical and other in-demand fields, the data is more encouraging: Underemployment is as low as 20% for engineering majors, and it’s 22% for education and health majors. In engineering, health, and education, 75% of recent grads are employed in jobs where a bachelor’s or higher is required.
On the other end of the spectrum, 52% of recent liberal arts graduates and 50% of business grads are underemployed.
The New York Fed’s paper presents more evidence that simply obtaining any college degree isn’t enough. Students are best served when they have a career in mind when choosing a major, and colleges need to align themselves with local employer needs and provide employment and wage information to students.
As authors Jaison Abel and Richard Deitz note, “Timely information on the fields in which jobs are available, what different jobs pay, and the career paths new workers can expect over their lifetime would be helpful to the parents and students investing in a college education.”
This is the type of the data EMSI specializes in providing to colleges and universities so they can disseminate it to students and parents, and it’s similar to one of the messages in a video released last year by Citrus College called “Success in the New Economy.”
Written and narrated by Kevin Fleming, a dean at Norco College in California, the video dispels the “college-for-all” philosophy that any college (and any degree) will lead to a job. Rather, Fleming argues that “success in the new economy is as much about acquiring the knowledge, skills, and abilities needed for in-demand occupations as it is to be well-educated. Both paths may work for you, but education combined with technical training is how you ultimately secure a competitive advantage in the new economy.”
There isn’t any easy solution to fix the misalignment between what colleges are offering and what employers are looking for in new hires. But understanding local economic realities, as Fleming mentions, is a good start. And there’s no better way to do that than through data and conversations with local businesses.