With the unemployment rate hovering above 9 percent, today's job market is bad for everyone. One group does seem to fare better than the rest, however: The jobless rate for workers with a bachelor's degree or better is just 4.3 percent, compared with 14.3 percent for high school dropouts.
But among college grads, the outlook is gloomier for one critical segment: recent graduates. A study this year put their unemployment rate at 10 percent among men and 8 percent for women. In addition, a study late last year for the Center for American Progress estimated that one in five recent male college graduates is underemployed and earning less than workers of the same age who have only a high school diploma.
That pattern will not improve much in the near future. A long-term economic outlook issued by the Macroeconomic Advisers consulting group says that we will not see a complete recovery in the job market until 2017 — five graduating classes from now. And President Barack Obama's jobs package wouldn't do much to fix this problem. It may help blue-collar men in construction jobs, and it may put some laid-off teachers back to work, but it contains little that would help new college grads, especially women.
So what happens to the Class of 2015 — the students who have just moved into their dorm rooms and are settling into introductory lectures this fall? What should they do?
They should stay put. Their best bet, by far, is to go to college and wait out as much of the economic storm as they can. If they can afford it, the smartest move may be to stay in school or in some sort of training program until the economy recovers in 2017. That's because entering the formal job market during a recession and settling for low-skill, low-pay work can permanently derail career prospects. Desperate finance majors who take a job in retail, for example, may never get back on track. If graduates get stuck in a role that doesn't use the full extent of their abilities, it is less likely that they will find a job later on that will. Employers tend to be biased against both the long-term unemployed and the long-term underemployed. Underemployment can, in other words, become permanent.
Skipping college and settling for a lower-paying career simply is not a smart trade-off, despite hype to the contrary from pundits such as Richard Vedder of the American Enterprise Institute, and Paul Harrington and Andrew Sum of Northeastern University. They are just handing out bad advice to other people's children. Sure, college is expensive — stories of students racking up tens of thousands of dollars in loan debt are common. Federal student loan default rates jumped from 7 percent in 2008 to 8.8 percent in 2009, so it's clear that not everyone is handling that debt responsibly.
But consider this: The bachelor's degree that a graduate gets in 2015 will, on average, be worth $1 million more in lifetime earnings than a high school diploma. Even the most expensive colleges cost only a fraction of their ultimate payoff. The only thing more expensive than going to college is not going to college.
And the dim job market will actually increase the demand for college-educated workers. One of the root causes of stalled job creation is an economic trend that picked up steam during the recent recession: Technological advances — combined with relentless global competition and cost-cutting pressures — have accelerated the automation of routine and programmable tasks in every occupation. The jobs that are disappearing are those in manufacturing and similar industries that used to provide good paychecks to workers with high school diplomas or less. They required little in the way of education or formal training. The jobs that are left are those that involve more sophisticated, non-routine tasks, which demand deeper knowledge as well as problem-solving and interpersonal skills.
This means that employers are looking increasingly for workers with post-secondary credentials over those with only a high school diploma. Consider the historical trends. In 1973, more than 70 percent of jobs required only a high school diploma or less, but that number had fallen to 43 percent by 2010. The future promises more of the same. Over the next decade, our research shows, there will be 31 million job openings that will require at least some education or training beyond high school — 9 million newly created jobs and 22 million openings to replace retiring baby boomers.
— Anthony P. Carnevale is the director of Georgetown University's Center on Education and the Workforce.