Imagine a time when having a bachelor’s degree absolutely guaranteed you would land a great job after graduation.
A bachelor’s degree used to mean much more than it does today, and the higher supply has led to some unfortunate employment prospects. These days, it’s not uncommon to see college grads working in shopping malls and coffee shops.
Consider this: the number of Americans under the age of 25 with at least a bachelor’s degree has increased 38 percent since 2000. With unemployment at 7.7 percent, the idea that a bachelor’s degree guarantees a stable job is no longer believable.
Bill Baker, President of Dallas-based recruiting firm Schul Baker Partners, said master’s degrees are what bachelor’s degrees used to be. However, even though their value might have changed, an undergraduate degree is still a necessity in today’s work economy.
“It’s like a ticket to be able to play. You can’t get into the games, often times, without it,” Baker said.
So what does that mean for Generation Y?
‘Degree Arms Race’
Rita McGrath, Associate Professor at Columbia Business School, said that as more people get college degrees, the more a college degree becomes a commodity.
“Having a bachelor’s used to be more rare, and candidates with the degree could therefore be more choosy and were more expensive to hire. Today, that is no longer the case,” McGrath said.
In our current economy, employers have the upper hand, and when given the opportunity to hire entry level positions paying little more than minimum wage, they tend to choose those with undergraduate degrees. McGrath said this is likely an unintended consequence of the “massive expansion” of bachelor’s degrees.
According to the U.S. Census Bureau, during the time period between 2002 and 2012, the number of people with undergraduate degrees increased by 25 percent. The growth in Master’s and PhD programs was even stronger. Master’s degrees increased 43 percent, or by about 5 million people, in the past decade. For doctorates, the number increased 45 percent, equating to about 1 million people.
McGrath said this growth is “indicative of a degree arms race.”
Unskilled and Skilled Labor
Spikes in higher education are quickly changing the face of the country’s work economy.
According to the Chronicle of Higher Education, unskilled labor jobs are reducing drastically. In 1960, 60 percent of jobs were unskilled and required no training or previous skills. Today, only about 15 percent of available jobs are unskilled. That means that 85 percent of all jobs available require some form of education or training, which often means a college degree.
Mario Almonte, partner at Herman & Almonte PR, said the value of a degree has not changed in the past decade.
Students are still educated and prepared for their chosen field, but due to an influx in new graduates, the competition has become tougher. Many human resources departments will not even consider a new hire without this degree.
“You won’t get the chance to prove you’re smart enough to do the job unless you show up with that degree in your pocket,” he said.
The Skewed American Dream
Completing an undergraduate program, landing a stable job and being able to pay one’s bills is part of the ideal American Dream.
But nearly half of college graduates do not get to experience this path.
According to the Bureau of Labor Statistics (BLS), 48 percent of employed U.S. college graduates are in jobs that require less than a four-year college education. Even further, 37 percent of that group holds occupations that require no more than a high-school diploma.
A conflicting trend has arisen: more education, yet fewer career paths. Not only is Generation Y becoming an over-educated generation, but they are struggling to find a job of any type.
In order to avoid this trend, some students faced with rising student loan debts and no job prospects decide to re-enter college and pursue their master’s degree.
But this decision does not always fare well. The unemployment rate for master’s degree holders was 3.5 percent in 2012.
Baker said the reasoning could lie with the majors that students pursue in graduate school.
“I think a lot of students that continue to get their masters in areas that aren’t supported by the market do that often times because they are immature or afraid of getting into the workforce,” Baker said. “I look at it from a business perspective. Is there going to be a return on investment?”
For this post, YouTern thanks our friends at Under30Careers.com!
About the Author: Rebekah Coleman is a reporter at loans.org, a website dedicated to helping consumers sift through the ambiguous details of the financial industry. Loans.org aims to educate the public by providing free access to relevant and unbiased financial information in addition to allowing visitors to apply for loans through the use of free online applications. She can be reached via email at Rebekah@loans.org.
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