Even if the unemployment crisis that followed the 2008 financial collapse appears to be easing, under the surface of more cheerful unemployment numbers the situation continues to be dire – especially for recent college graduates. According to The Wall Street Journal, an increasing number of graduates leave school with tremendous amount of student debt, yet are only able to land low-skill jobs that don’t take advantage of their degrees.
Further bad news is provided courtesy of a recent study that predicts that even when the economy rebounds, the students leaving college right now might not benefit. For those who hoped that this wave of underemployment – skilled workers in jobs that don’t require qualifications beyond a high school degree – was temporary, the report is a splash of cold water.
The paper was published earlier this week by the National Bureau of Economic Research and its authors argue that there will not be a hiring frenzy after this recession as there was after the one in the mid-1990s, especially in the technology sector.
This is in part due to the fact that a lot of the infrastructure required to move to high tech manufacturing or or other high-tech industries is already in place, yet colleges and universities continue to churn out graduates who have the skills needed to perform these kinds of jobs even though there’s no one interested in hiring them.
David Autor, an economist at the Massachusetts Institute of Technology who has studied issues of skills and education, called Mr. Beaudry’s thesis “provocative” but also “speculative.” There is no question, Mr. Autor said, that the wage premium enjoyed by college graduates hasn’t grown as quickly during the 2000s as in earlier decades. But whether that is the result of a glut of degree holders or some other explanation isn’t yet clear.
Meanwhile, there is a stream of stories about college graduates lining up for jobs that high schoolers could capably perform. Brian Hackett, who graduated with a political science degree nearly three years ago, now works as a filing clerk alongside others with bachelor’s, master’s and even law degrees. He explains that this is a situation common to many of his friends who have degrees and skills and nowhere to use them.
How do we square this analysis with frequent complaints from heads of technology companies that they are trying and failing to land qualified workers, and therefore are pushing the federal government to ease immigration restrictions to make up the shortfall?
Mr. Beaudry said it is possible such shortages exist in specific industries. But using Labor Department data, Mr. Beaudry and his coauthors found that demand for college-level occupations—primarily managers, professionals and technical workers—peaked as a share of the workforce in about 2000, just as the dot-com bubble was about to burst, and then began to decline. The supply of such workers, meanwhile, continued to grow through the 2000s. The subsequent housing boom helped mask the problem by creating artificially high demand for workers of all kinds, but only temporarily.