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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 vacant positions were in remote areas. They offered no moving allowance or job security, and the pay was disappointingly low. John found his situation wasn’t unique; 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, John was out of money and options. He now works a part-time job. His employer limits his hours to avoid paying benefits. He can’t get another degree now; not only can he not afford the tuition, but he’s now one of the 80% of hourly workers with an unpredictable on-call work schedule, which prevents him from being able to attend classes [3]. He could get an additional degree online, but he’s not sure it would be a wise investment. Online education isn’t as well-respected as its traditional face-to-face counterpart [4, 5]. 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 41 percent work in jobs that typically don’t require a college degree [6]. And as he found, it’s not just the much-maligned art history (56%) or ethnic studies (50%) majors who are taking your coffee order or folding shirts at the mall. 73% of criminal justice majors and 60% of business management majors are working in positions that typically don’t require a college degree.
And it turns out there wasn’t really a shortage of STEM workers after all. While politicians and pundits were banging on about the need for more STEM graduates, the evidence showed that the “STEM shortage” is largely a myth. Schools in the U.S. churn out more STEM graduates than there are available jobs, leading to oversupply in some fields [1, 7, 8].
How did we get here?
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 about as common as a high school diploma was in 1950 [9].
Now philanthropists and policymakers are pushing to get even more people to go to college [10], aiming to have up to 60% of the population holding a postsecondary degree [11]. Supporters of increased rates of college degree attainment cite the fact that people with college degrees earn more, on average, than people without them [12]. The claim is then made that increasing the number of college graduates will result in improved wages for graduates and non-graduates alike. This rests on two assumptions:
1) The demand for college graduates will rise to meet the supply, and
2) There are enough “good” (high-paying, stable) jobs out there to absorb the increased output of college graduates.
The first assumption is correct. Given a choice between two applicants, employers prefer the more-qualified candidate. What this means is that companies will now hire college graduates for jobs that used to require only a high school diploma. That’s the source of the college premium: College graduates are filling the jobs that high school graduates used to get [13].
UNEMPLOYMENT AMONG those with high school only has gone up at the same rate as college attainment. Sources: www.epi.org/publication/the-class-of-2015/ and nces.ed.gov/programs/digest/d15/tables/dt15_104.10.asp
Increasing the number of college graduates has not coincided with an increase in good jobs for those graduates; in fact, the opposite has happened. Since 1980 average income has decreased, the number of poverty-wage jobs has grown, and the percentage of jobs that are temporary or on-call has gone up [14].
Claims of an undersupply of college graduates have been contradicted by the evidence. For example, a 2010 Center on Education and the Workforce study 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 [15].
As of 2019, according to the Department of Labor, only 21% of jobs in the United States required a bachelor’s degree, and an additional 11% required an associate’s degree, certificate, or some college. 63% of jobs required a high school diploma or less [16, 17].
Producing more college degrees hasn’t produced more high-paying jobs. The defining problem in the U.S. job market isn’t a skills gap; it’s that too many educated people are chasing too few jobs [18]. As education levels have increased, the poor have simply become better-educated [19, 20].
How did the CEW researchers get a result so at odds with the Department of Labor? The researchers got their results by assuming underemployment doesn’t exist. They define the size of the college labor market as a function of the number of college graduates currently employed in a given occupation [21]. For example, if 15% of taxi drivers have bachelor’s degrees [22], that means 15% of taxi driver jobs need bachelor’s degrees [21]. Had the study been submitted to a peer-reviewed journal, this unorthodox methodology might not have survived to publication.
Why advocate increasing college-going rates in a labor market that already has an oversupply of college graduates? A cynic might point to the fact that the Center on Education and the Workforce and similar college completion efforts are funded by the Lumina Foundation for Education [23, 24], which has roots in the student-loan industry. When the nation’s largest administrator of private student loans sold its assets to Sallie Mae, the Lumina Foundation was created with the proceeds, and former Sallie Mae board members have served as directors of Lumina [25]. The Lumina Foundation’s stated goal is “increasing the proportion of Americans with high-quality degrees, certificates and other credentials to 60 percent by 2025” [26]. In light of this history, Lumina’s relentless efforts to increase college enrollment could be seen as a conflict of interest [27]. But the college completion agenda is appealing even to those without ties to the student loan industry. Increased college attainment is an easily-understood, feel-good goal that allows us to ignore thorny structural issues.
Another reason to encourage everyone to go to college is that as the college degree has become more common, there is an increasing penalty for not having one. The college degree has come to be seen as necessary, but not sufficient [28].
Valuable because they’re rare
It can be argued that college degrees in the job market are a positional good [29]. A positional good is defined as something that is valuable because it is scarce—the more people have it, the less it’s worth [30]. What we see happening in the labor market seems to support this view. Employers in the United States aren’t offering more good jobs to accommodate the increased number of college graduates; instead, they’re requiring college degrees for the jobs that used to go to high school grads [31].
Individually, chances are you’re better off with a degree than without one (setting aside for the moment the chance that you might start college but not finish, ending up with debt and no degree [32]). But collectively, as more people earn college degrees, the less likely the average graduate is to attain a “good” job. There is now an oversupply of college degrees. A college degree is not a golden ticket; it’s more like a hunting license.
Sources: https://www.census.gov/data/tables/2018/demo/education-attainment/cps-detailed-tables.html and https://www.bls.gov/spotlight/2019/education-projections/home.htm
Numbers in thousands. Civilian noninstitutionalized population over 25.
For more on whether the value of a college education lies in the skills it imparts versus the signal it sends to employers, look up the “Sheepskin Effect.”
Why didn’t anyone tell me how hard it is to find a good job?
Your counselors probably never told you that we have an oversupply of educated job-seekers. That’s probably because no one told them. 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 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 [33].”
Here are the numbers: Most professional writers earn less than a thousand dollars a year from their writing [34]. Fewer than one in 500 high school athletes ends up playing professionally; for basketball players it’s fewer than one in 10,000 [35]. And astronauts? NASA takes fewer than 1% of applicants [36]. And if you’re thinking about going into movies or politics, your chances aren’t much better. [37].
YOU’RE MORE LIKELY TO DIE IN THE TUB THAN MAKE IT IN HOLLYWOOD
SOURCE: https://www.onlinecasino.ca/odds-of-success
