The most troubling point about underemployment isn’t that so many college graduates fall into it. It’s that so many fail to climb out.
Picture 100 newly minted college graduates, outfitted in their caps and gowns. Now imagine 43 of those graduates step to one side. That’s how many people have bachelor’s degrees, but their first job out of college isn’t a college-level job. Those young people can expect to earn $10,000 less on average than the 57 graduates who got college-level work.
Now picture this group five years later. Fourteen of them have moved on to college-level jobs. But the remaining 29 have not.
Now imagine the group a further five years on, a full decade after graduation. Another eight have escaped underemployment, but two of those who had moved ahead five years before have fallen back again. In other words, nearly a quarter of the 100 graduates we started out with remain in sub-college jobs, with a consequent cut in earnings and opportunities. And that’s without even considering the impact of college loans.
The Permanent Detour, our research report on underemployment with the Strada Institute of Work, examined possible causes and consequences of underemployment for recent college graduates. One of the most important takeaways is that the transition from college to work is a high-stakes decision. As The Permanent Detour noted:
Our findings also suggest it is more important than ever that students study the right things. Although it is true that students in STEM fields have lower rates of underemployment, this problem is not — and should not be — strictly about choice of major. Rather, a greater emphasis should be placed on acquiring skills and proficiencies that have value in the workplace.
Our research has consistently found that having the right skills is what makes the difference for job seekers. That’s not the same as picking the right major, although majors matter, and aligning programs to the job market is one of the best ways higher education can ensure student success. The solution is about adding the right skills to whatever degree you might get.
For example, our research has found that liberal arts majors can dramatically increase both their job opportunities and earnings using this strategy. There are 10 skill clusters liberal arts majors can employ to essentially erase the earnings gap with STEM majors.
It’s also true, however that students need help identifying the skills they need. Higher education can address this with two strategies:
- Ensure programs are aligned with the labor market. Institutions can do this with a research strategy to analyze the labor market and compare it to their curriculum, such as the one set out by EAB in a recent report. Or, educators can use an analytical dashboard specifically designed for program alignment, such as Program Insight™.
- Strengthen career services and bring career information into the enrollment process. A survey conducted by Gallup for Strada Education Network found 4 in 10 students have never used their college’s career services resources. Not only can colleges do more to let students know what is available, but career information can also be critical in attracting and retaining students. More colleges are beginning to build career data into their enrollment process, either through admissions counseling or by adding it to their websites.
As the report concluded:
Higher education should recognize underemployment as an avoidable risk for graduates…Underemployment is not inevitable, but avoiding it does require additional planning by both colleges and students.
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