More Grads Get Jobs in Their Field
Washington — It was one of the most iconic symbols of post-recession America: the college graduate working as a coffee shop barista, carrying a mountain of student debt and a bachelor’s degree into a job that ordinarily would have required only a high school education. Almost half of recent grads, in fact, were in jobs that didn’t match their experience.
But now, economists say, the tide is turning. Members of the class of 2015 have the best chance since the recession of not only finding a job, but landing one that capitalizes on their time in school. The number of open positions that require a college education has spiked over the past year, according to several analysis. Meanwhile, so-called underemployment for freshly minted grads has dropped after rising almost unabated to a record high last year.
It’s one tangible sign of the dramatic plunge in the unemployment rate — to 5.4 percent from 7.6 percent two years ago — and it has big implications for the economy beyond the college kids (and their parents) who had begun questioning the value of their diplomas. The housing market could benefit as students fly the family nest. Wages could rise amid increased competition for workers. And those with less education could get a chance to move up.
College-educated workers have fared better than most in the recovery. Those without a diploma have had a harder time finding any type of work. Many jobseekers have been so discouraged by their prospects that they simply quit looking. The number of part-time workers who want full-time jobs is still high. But a bachelor’s degree doesn’t come with any guarantees. Even among college grads, the jobless rate is significantly higher than it was during the boom years. The market is tougher for those fresh out of school than those with more experience. An analysis by the Federal Reserve Bank of New York found that the unemployment rate for recent grads is just over 5 percent, compared with 2.7 percent for college graduates as a whole. The rate of underemployment, or people working in jobs below their skill level, fell substantially over the past year, but still stands at about 45 percent.
Yet the brightening outlook for college grads is already starting to ripple through the economy. Young adults who had moved back in with their parents after graduation are now striking out on their own, government data suggests, a potential boon for the housing market. More companies are raising their starting salaries or offering signing bonuses, according to a Michigan State University poll, erasing the earnings penalty that can last years for students who graduate into a weak economy.
And people up and down the economy are finding work that better matches their education: More college grads moving into high-skill jobs opens the door for those with less education to move up behind them.
A study by the Federal Reserve Bank of Kansas City released this month found that from 2012 to 2014, college grads were hired into middle-skill jobs such as sales and administration more often than those without a degree.