Job Skills About half of college grads underemployed => disaster?

1. Jul 22, 2017

FallenApple

Do people not see how dire this situation is? Hundreds of billions are burned without any return. Sure, plenty of people profit. But with such a big portion that doesn't, it's scary. That's 4 extra years that these grads could have spent contributing to the workforce. That's also billions of dollars wasted by government investment.

It also shows that a large amount of people are easily willing to gamble on 50/50 chances, which might be more telling than the dollar amount lost. Is this a bubble waiting to burst?

What would resolve this situation? I'm thinking that borderline students(those that are not already great academically) should probably just wait out the storm and go to college at the right time when a profit appears to be highly probable; certainly better than just a coin flip, actually, they should go when it's much better. Well, we wouldn't even know if this is a viable solution since people's tendency to overreach mean that not enough would listen. The advice is probably already out there.

2. Jul 22, 2017

Staff: Mentor

These are things you can never know for sure and so you must go with the flow. If you like learning you should learn. At some point, you will get to use what you learned no matter how terrible you were in taking the course or how much you detested the subject (I'm thinking English class was the most frustrating for me but now we have computers to blame for our bad sentences).

There is also no guarantee of getting a decent paying job. You must still compete with other qualified folks and education is the best tool to do that. The other option is to create a new business or your own independent job.

It's naive to think that we are wasting money or resources on education or that we are dropping money in the dumpster with no return. Only the prepared make the discoveries or come up with the new ideas and only education can prepare you. I do believe the for profit schools have soured education by marketing false promises and getting students to go into debt but that's another problem we have to deal with.

3. Jul 22, 2017

FallenApple

The money is not completely wasted as we are still making headway, both technologically and scientifically. The true issue lies in the fact that there is a significant proportion of prospective grads who will end up taking jobs that they would have gotten anyways without a college degree. With that many people who do not profit, the economy will buckle at some point sooner or later.

There is no guarantee of getting a decent paying job, I agree. It's ok if a few people gamble despite this. But it quite another when millions systematically gamble.

I understand that education is needed in order for society to keep advancing technologically; education needs to stay. But something needs to be done about the odds of success and the fact that too many blindly go without a really good plan on what they want to do.

4. Jul 22, 2017

FallenApple

Admittedly, I'm prideful and a bit stubborn, and so I personally find it more philosophically correct to go all-in in an attempt to better myself. In a sense, it's more honorable that way.

But when way too many people do that, at the wrong time, I can't say objectively that society would be better off for it.

5. Jul 22, 2017

Staff Emeritus
Underemployment is a mismatch between what a person thinks he is worth to a business, and what the job market thinks he is worth to a business.

We had a person not too long ago complain that he wasn't earning enough to drive a Porsche, was doing work that could easily be outsourced at a third the cost, and eight hours working a day was just too much for him. If this is typical, it seems like there is more mismatch on the supply side than the demand side.

6. Jul 22, 2017

StatGuy2000

Oh, so you're blaming the students now for graduating with a BS or BA expecting it to be a path to fulfilling employment or a route out of poverty, only to be unemployed or only able to find work at Starbucks or Walmart for minimum wage?

If there is a mismatch between what a person thinks he/she is worth and what the job market thinks he/she is worth, then couldn't you conclude that the problem lies in as much in how the job market thinks people are worth? That nations should think clearly about ensuring that people can earn decent, livable wages? That we should be thinking about encouraging unions so that workers can better negotiate with employers?

IMHO, it seems to me that you are just as much out of touch with the realities facing students these days as are the students graduating.

7. Jul 22, 2017

Staff: Mentor

I do. Far too many kids go to college with no plan or a bad plan and end up wasting their time and money. What is most needed IMO is for parents to ensure their kids don't waste their time in college but instead get marketable degrees. And if they aren't cut out for marketable degrees, then they shouldn't be going to college.

Note, however, that worthless degrees are only mostly worthless in that they are still prerequisites for some types of jobs. A buddy of mine smoked and snorted his way to a 6 year liberal studies degree, meandered through his late 20s to a paralegal certificate and 15 years later is a high level manager at a law firm.
No. That's like arguing against the weather.
No. It is *my* responsibility to ensure *I* earn a decent wage. It is not *my* responsibility to ensure *you* earn a decent wage: that's *your* responsibility.
No. Artificially pumping-up wages beyond what they are worth is a recipe for destroying the industries you pump-up wages on. The car industry is the perfect example.
I know the realities -- IMHO, it seems to me like you would like others to change your reality for you when you could easier change it for yourself.
Agreed. That's why we're in this situation! [caveat below about the true nature of the gamble]
I can't see how that constitutes a "bubble". Can you explain what you mean?
 Oh, are you referring to college costs and over-attendance? Maybe.
Better parenting, better guidance from teachers/administration.
College is not a coin flip. It is a coin, sitting on the ground heads-up that students look at and then choose to bet tails.

8. Jul 22, 2017

StatGuy2000

Intrinsic in your statement is that the job market is somehow impervious to change by the actions of individuals and governments, which is far from the case.

I respectfully disagree. I feel that it is everyone's responsibility to ensure that all citizens have access to a livable wage (note my term "livable wage" i.e. wages that are the minimum that people can survive on, not "decent wages"). That's why I support (in the case of the US) a $15/hour minimum wage. And why I am also open to the idea of a guaranteed minimum income (with caveats in terms of how it can be implemented). I again respectfully disagree. There has been a number of studies looking at the effects of unionization in terms of the productivity of firms, and have found that, contrary to common beliefs, "a positive association [of unions on productivity] is established for the United States in general and for US manufacturing in particular". http://www.epi.org/publication/webfeatures_snapshots_20070620/ It's worth noting that many European countries have maintained strong unions and most of their employees are covered by collective bargaining agreements, from 68% in Germany to over 90% in Belgium, France, and Sweden. As for your example about the car industry, the problems there have little do with unions, and has almost entirely to do with poor management that failed to respond appropriately to competition from Japanese car manufacturers. My quote was directed at @Vanadium 50 , not to you (I was questioning how he seemed in his post was blaming students for their own underemployment, and my post was a response to him). 9. Jul 22, 2017 Mark44 Staff: Mentor I am opposed to the$15/hour min. wage (which I believe started out in Seattle, near where I live) and very opposed to a guaranteed minimum income. I've seen some studies that show the effects on some businesses laying off employees as a result of this new law. A very real effect of a forced minimum wage is that it prices people with few skills out of the market. For example, while the overall unemployment rate in the US decreased from 4.8% to 4.2% from 2nd Qtr 2016 to 2nd Qtr 2017, but for black teenagers 16 to 19, the unemployment rate decreased from 30.0% to 25.9%, and for HIspanics in the same age group, it decreased from 17.7% to 14.0%. (US Bureau of Labor Statistics - https://www.bls.gov/web/empsit/cpsee_e16.htm)

Lacking an opportunity to "get one's foot in the door" in an entry-level job at an entry-level pay rate makes it nearly impossible for such people to ever work up to a real job.

History in the US in 2008 contradicts this. Two of the largest auto firms in the US, GM and Chrysler, fared so badly in the Great Recession that they needed large transfusions of cash from US taxpayers. The $81 Billion invested in GM, GMAC, and Chrysler ended up costing US taxpayers about$10 Billion after the shares bought by the government were resold (https://www.thebalance.com/auto-industry-bailout-gm-ford-chrysler-3305670). Ford didn't need to be bailed out by TARP, as it had already cut costs prior to the recession, but did accept some help from a different plan so as to not have to compete against government subsidized corporations. A big factor in the near demise of the auto firms was the cost of union labor, and in particular, the cost of pensions.

Speaking of pensions, the cost of pensions is having a grave effect on such cities as Detroit (the auto manufacturing capitol) and even states, with Illinois's bond status reduced to one step above "junk" status (with Forbes opining that this rating is a farce https://www.forbes.com/sites/invest...d-despite-what-the-agencies-say/#7020036e3191).

10. Jul 22, 2017

QuantumQuest

I think that the problem is multidimensional and multi leveled. On the one hand, everyone willing and having the ability to be educated, should think seriously and carefully about what he / she really wants to pursue, what are his / her strengths and weaknesses and what are the pains to be taken in order to reach his / her goal(s). This would eliminate gambling - regarding what to pursue and leave no room for overlooking the final result. But in real life there is a multitude of factors that influence the whole thing (like age, sociopolitical situation and this varies heavily regarding different countries and cultures, economy and last but not least the human nature itself). On the other hand, job market being part of the wider market for a specific country is subject to influence from some of the above factors and a crucial part of the economy of a country itself and of course while it should have more clear and fair rules, that is not the case and won't be (at least in the foreseeable future) but equally importantly it can't be. So the situation is distorted on both sides and in my opinion the best bet for anyone wanting to be well educated is strong determination and after graduating obeying the rules of the market in order to get a job. Things were never perfect and won't be. But this can in no way stop the right for education for anyone, no matter where he / she lives.

I'll totally agree to this. Additionally, there is no waste of money for education but every person after graduation has to land on reality. Clearly, there can't be any time, anywhere so many jobs in a specific field / technical sector or whatever else regarding higher education, as there are people applying. Only the best survive and for the rest there are other jobs to deal with. Also, in my opinion Vanadium 50 makes an absolutely fair point because there is a lot of people that overestimate their skills and think that they are underpaid while in fact they are overpaid for what they really give to the company they work for, worldwide. On the other hand, there is also the opposite thing in many cases - I have long experience in this in my country, that many people get heavily underpaid for what they worth (knowledge / expertise) but I think - as I am already a little more than middle-aged, that everyone should pursue better payments no matter in what place of the world, provided that he / she is consistent with his /her field / job and not gambling with real knowledge / expertise and real goals. After all, life is not a fairy tale.

11. Jul 22, 2017

StatGuy2000

Please quote which studies you are referring to. I've seen other studies which indicate that a raise in the minimum wage have little impact on unemployment rates.

Again, you have not presented any empirical evidence that raising the minimum wage would price low-skilled workers out of the market. As for unemployment rates for black teenagers and Hispanics in the same age group between the quarters you speak of -- how much of this can be attributed to more low-skilled employment available, or the fact that fewer people of that age group are actively seeking? Remember, unemployment rates only measure those who are unemployed and actively seeking employment (using whatever metric is used to measure this).

It's just as conceivable that more black and Hispanic teenagers are back in school finishing their studies rather than seeking employment, which would reduce the employment. (another, much more negative explanation could be that more black and Hispanic teenagers are being incarcerated due to discriminatory policing, and thus are being pulled out of the labour market -- admittedly, I don't have evidence for this, but just putting it out there as speculation).

The problem with looking at the US auto industry as an example of problems with unionization is that the US auto industry faced multiple series of problems prior to and immediately after the Great Recession of 2008, which had very little to do with unionized workers. For example, GM and Chrysler have faced decades of mismanagement and poor decision making at the very top of the company for years which prevented the firms from adapting to the needs of consumers (for years, GM and Chrysler stood for poor quality cars, with poor service to boot from the dealerships).

How representative are the US auto industry in terms of unionized US or international employers? That's a question that needs examining.

12. Jul 22, 2017

Staff: Mentor

You're getting warmer. It isn't impervious to change, it is self-correcting. So when you try to change it it will make a correction and you'd better understand what that correction is going to be when making the change.
Fair enough. You're entitled to have and support your own vision. But what you can't have is to automatically make your vision work. It might work or it might not. And unfortunately, this vision doesn't work. Cities experimenting on it are learning that you can't ignore those "corrections" I referred to above.
@Mark44 expanded on my point for me. However:
That article is a red-herring: it doesn't discuss what we are discussing, probably because the authors recognize that the answer on the issue were're discussing is that unions hurt, not help. This is about pay and profit, not productivity. You [they] don't support unions because they increase productivity, you support them because they increase worker pay.
Ehem: that competition was in large part driven by lower cost of labor due to non-unionized manufacturing.
Well sure - that was my first post in the thread. But I'm free to respond to any post I want! That's how discussion forums work! Besides, I suspect my thoughts and his are in alignment.

What so irritates me about this issue - what so reduces my sympathy and G.A.S. factor is that the answers are so obvious and easy, but people don't want to do things that can actually help because it is more fun to reward people after the the fact for bad behavior rather than try to fix the bad behavior. But you're right: the government can help. Not by fighting against capitalism, but by harnessing it. We've done it before:

With smoking.

Yep, that's right, liberal arts classes are like cigarettes. And here is what you (and many others) are suggesting we do:
1. Subsidize the smokers by paying them free money to use to buy cigarettes.
2. Paying to treat them and improving their quality of life.
3. Funding that by charging non-smokers a tax.
That is a sure recipe for making the problem worse.

Here's what we actually did to crush smoking/lung cancer:
1. Put giant warning labels on cigarette packs and fund aggressive anti-smoking advertising campaigns.
2. Tax cigarettes heavily to discourage smoking.
3. Use those taxes to fund their own care.

You can apply this almost literally to liberal arts:
1. Giant warning labels on applications and tests. Aggressive public advocacy campaigns warning of the dangers of liberal arts classes/degrees.
2. Tax liberal arts classes to discourage people from taking them.
3. Use the taxes to fund recovery programs for young liberal arts graduates to go back to school and gain more marketable skills.

Last edited: Jul 22, 2017
13. Jul 22, 2017

Regarding the studies on the effects of $15/hr min. wage, I'lll do some searching later today. "Back in school" -- have you seen any statistics on high school completion rates by these groups? It would be difficult to justify your assertion here. "discriminatory policing" -- Another explanation is that these groups are committing crimes at much higher rates. Give me some time and I'll dig up some statistics. 14. Jul 22, 2017 russ_watters Staff: Mentor By the way, I feel like this thread's premise should be supported: http://www.marketwatch.com/story/th...ith-college-degrees-research-finds-2016-01-11 And unemployment rate and median salary by college major: https://www.wallstreetprep.com/blog/salary-and-unemployment-rate-by-college-major/ 15. Jul 22, 2017 russ_watters Staff: Mentor It's been all over the news lately due to the recent experiments in it from a number of cities: https://fivethirtyeight.com/features/seattles-minimum-wage-hike-may-have-gone-too-far/ Most of these experiments are just starting, so the picture will become clearer over the next few years. The thing is, even proponents must acknowledge that money isn't free, right? If you increase people's wages, the extra money has to come from somewhere, doesn't it? You can't just ignore the market corrections when promoting a policy: you have to look at both sides of the coin openly/honestly. Again, you're only looking at half the equation. Japanese cars rose in the '80s when they were inferior to American cars. What matters isn't the quality, it's the value: the cost vs quality. Japanese (and Korean) cars provide a better value primarily due to cheaper labor costs. Yes, that is in large part "mismanagement": it's a failure by management to keep the unions in check. See: https://hbr.org/2009/06/why-gm-failed And: http://www.motorwayamerica.com/editorial/gms-slimmer-cost-structure-will-pack-wallop When you sell cars for$30,000 and spend \$5,000 more per car in large part on bloated union contracts, that's a recipe for bankruptcy.

16. Jul 22, 2017

UsableThought

I see shards of disconnected arguments. The good thing is, it suggests we understand that the OP's question involves many factors. The bad thing is, it suggests blind men arguing about an elephant. Or maybe blind men in a bar over some beers.

Who among those who've commented has actually studied macroeconomics at length, or has a professional/institutional role that involves following & analyzing macroeconomic trends?

Last edited: Jul 22, 2017
17. Jul 22, 2017

Staff: Mentor

I do agree, and I find it disheartening that such discussions start with a problem that most people agree is a problem and then lead to discussion about rewarding the mistake instead of trying to fix the mistake. It's mind blowing to me.
What is also disheartening about discussions like this is that the economics, at least on the first order, is pretty easy, based on simple, logical truths like "if you charge more money for a product, people will buy less of it."

18. Jul 22, 2017

UsableThought

On the first order - yes. But this doesn't strike me as a first-order issue.

I've read somewhere between a half-dozen and a dozen economics books, e.g. one analyzing banking collapses, a Robert Frank textbook that I don't remember well, a survey book analyzing different schools of modern economic thought, a historical look at the emergence of markets in Europe (some French author), and so forth. But my knowledge is far too sparse & disjointed to be meaningful for talking about an entire economy.

19. Jul 22, 2017

Staff: Mentor

Beyond first-order, economics becomes more like soothsaying than an actual science. For example, even to this day economists disagree on whether the programs developed during the Great Depression helped or hindered things.

20. Jul 22, 2017

UsableThought

And yet to argue without looking at the entire scope isn't much help. Nor would you and I have a prayer of making economic policy ourselves; we wouldn't know where to start. It's a soothsaying job, but somebody has to do it.

To say it's soothsaying is merely to say that the problems are very tough problems. For more perspective on why expertise still matters even in very tough problems, even though the rate of successful prediction is crap, see The Death of Expertise, by Tom Nicols; I have posted about this book before, so you can search PF for my username and "expertise" and find the threads.

Now I have to run out and see some theatre. Not sure if it's a comedy or a tragedy I'll be seeing.