The unemployment rate for recent college graduates is much lower than it was 10 years ago. But, too often, recent graduates struggle to land positions in line with their degrees. To support themselves, some are forced to take jobs they’re considered to be overqualified for.
Currently, 41 percent of bachelor’s degree holders ages 22-27 are “underemployed,” meaning they’re working jobs that don’t require a four-year degree, according to newly updated data from the Federal Reserve Bank of New York. That’s despite a relatively low unemployment rate for recent graduates, which has dropped from 6.8 percent to 3.9 percent over the past decade.
Some are notably more susceptible to underemployment than others. According to the New York Fed, nearly 67 percent of those who studied performing arts and 63 percent of former leisure and hospitality majors found themselves underemployed in the first few years after college, compared to about 17 percent of those who majored in industrial engineering and 11.4 percent who studied nursing.
Although these figures are concerning, they shouldn’t necessarily dissuade students from going to college. Despite rising costs, college is still largely worth the investment. According to the New York Fed, bachelor’s degree holders earn an average $15,000 more annually than those whose education stopped after high school.
It can be difficult, though, for bachelor’s degree holders to unlock their earning potential, particularly early on in their careers.
Recent grads are quickly hit with living expenses, student loans
Upon graduating, many new graduates are hit with living expenses that may have been at least partially covered by their parents while they were students. And if they took out student loans to pay for their education — as 70 percent of students do — they’ll need immediate money to start paying back those loans. In that light, it’s not uncommon for new graduates to accept a position in the short-term, whether it’s a job that requires a degree or not.
Demand for experience beyond a bachelor’s degree
There’s also the competition factor. With more and more people in the United States earning bachelor’s degrees, they’ve lost a bit of their value. On their own, bachelor’s degrees are seldom enough to land recent grads jobs at many American companies.
Therefore, in addition to earning their degree, those who wish to distinguish themselves amidst crowded applicant pools have to develop a wide range of skills and immerse themselves in the professional world. And the best way to gain that experience is by pursuing internships.
“One of the most important things students can do is go after experiences that are going to practically and relevantly prepare them for what their next step is,” Kevin Grubb, the executive director of Villanova University’s career center, told The University Network for a previous article.
“Even if the internship or research experience they take on doesn’t wind up being the ultimate industry or job function that they want, the skills and professionalism they gain in those experiences are valuable to whatever that next step might be and applicable to employers of all different kinds,” he added.
Overall, students have become much more aware of the value of internships. A College Pulse survey found that 72 percent of college students think an internship at a prestigious company looks better to potential employers than a degree from a prestigious university.
And they might be right. Some of the nation’s leading companies, including Apple, Google and Netflix are opting to no longer require employees to have four-year degrees.
“Our company, as you know, was founded by a college drop-out,” Tim Cook, Apple’s CEO said during a visit to the White House in 2019. “So we’ve never really thought that a college degree was the thing that you had to have to do well. We’ve always tried to expand our horizons.”
Could be a matter of time
The New York Fed data also shows that once graduates reach 28 years of age, their likelihood of working a position that requires a four-year degree increases. From that, one may gather it simply takes a few years for graduates to establish themselves as viable job candidates.
Desire to pursue the highest paying option
It’s important to note that the New York Fed describes a job as one that requires a college degree if “50 percent or more of the people working in that job indicate that at least a bachelor’s degree is necessary.”
By that definition, there are many positions — particularly in the tech industry — that the New York Fed may consider “non-college jobs” that pay more money than some “college jobs” would.
To be a computer programmer, for example, all that many companies require applicants to do is prove their expertise in computer languages through a certification or similar means. The median pay for computer programmers is upwards of $84,000 a year.
It’s not unreasonable to assume some recent college grads are opting to forgo the job that requires a degree for the one with the higher paycheck.
News & Content Manager
Jackson Schroeder is a graduate of Ohio University with a B.A. in Journalism from the E.W. Scripps School. He is originally from Savannah, Georgia. Jackson has covered a wide range of topics, including sustainability, technology, sports, culture, travel, and music. He plays bass and guitar, and enjoys playing and listening to live music in his free time.