A bad first job isn’t just a phase—it can be the start of a job market trap that keeps college graduates underemployed for a decade.
One of the persistent themes about the economy since the Great Recession has been underemployment, where college graduates end up in jobs that don’t require college degrees. (Picture the stereotype of the “barista with a bachelor’s.”) The latest Burning Glass Technologies research, conducted with the Strada Institute for the Future of Work, uses our resume database to examine how careers unfold for young graduates.
The report found that 43% of new college graduates were underemployed, defined as jobs that don’t require a college degree. More disturbingly, we found that people who start out underemployed tend to stay that way. Two-thirds of that 43% were still underemployed five years later. Of that group—those underemployed after five years–74% were still underemployed at the 10-year mark.
That has serious implications for the paychecks of underemployed workers. The average underemployed college graduate makes about $37,000 a year, while a graduate in a college-level job makes an average of $47,000 per year.
The pattern works in reverse, as well. Graduates who start off in college-level jobs rarely sink back into underemployment. Nearly nine in 10 (87%) were still appropriately employed five years later.
Women suffer even more from this problem than men. Women are more likely to start out underemployed (47% for women vs 37% for men). In later years women recover from underemployment at similar rates to men. But because more women start behind, they’re more likely to stay behind.
This holds true no matter what major is involved. Overall, STEM majors are less likely to be underemployed, but women with STEM degrees are still more likely to be underemployed than male STEM graduates.
The research underscores how critical it is for college students to make a smooth transition into the workforce. Educators often argue, with justification, that they are preparing graduates for their 20th job, not their first. But our research shows that the first job carries higher stakes than many imagine. A false start can leave graduates struggling long into the future.
To stay up-to-date on the latest news in today’s labor market, follow us on social media and subscribe to our newsletter today.