Post-Grad Doom? Some Grads Are Smiling
By Patrick Gillespie
Rohan Mohanty will leave the college life in two weeks. He’ll listen to Vice President Joe Biden’s commencement address at the University of Delaware, and few days later, he won’t dread his post-grad life. He’ll start his job as an operations analyst at JP Morgan in Delaware.
Mohanty, a finance major, says he and many of his business-school friends have jobs before graduation. His engineering friends have found jobs too. Even his friends without jobs are optimistic—they’re patient and pointing at Mohanty’s early success as a preview of theirs to come.
“I think it’s a reflection that they’re waiting for the right opportunity shows that they’re optimistic about it,” Mohanty, 22, says. “I think if they were pessimistic about it, they’d probably jump at the first thing that was offered to them.”
Mohanty, a Kingston, R.I. native, and some of his peers are bucking the pessimistic outlook on the job market for this year’s college graduates. They’re employed or they’re optimistic they will be soon.
A larger economic trend could be developing that may be helping their outlook. Baby Boomers, many who delayed retirement, are leaving the workforce in growing numbers, opening up college-level jobs that many recent graduates haven’t found since the recession began. This generational turnover of degree-requiring jobs could solve the underemployment issue many graduates face.
With the cost of a degree going up, the value of higher education is questioned now more than ever before. This year’s college graduates face a myriad of issues—student-loan debt and underemployment to start—but there’s some signs for hope.
Degree holders only had a 3.3 percent unemployment rate in April, down from 3.6 percent a year ago, according to the Bureau of Labor Statistics’ establishment survey. That’s close to half the national total unemployment rate.
Adjusted for inflation, college graduates make about $10,000 more than they did nearly thirty years ago, and consistently have salaries much higher than people with only a high school diploma, according to Census Bureau data.
An overwhelming amount of American universities—public and private—have a positive, 30-year return on investment (ROI), according to data from Payscale.com. ROI is the total cost of four years of college divided by the estimated, cumulative income of a graduate over 30 years. The data suggests most graduates’ degrees will more than compensate them for the educational investment they made. (It’s worth noting that collecting accurate income data from college graduates is difficult and the numbers are subject to graduates’ honesty).
News is especially good for engineering students. Last year’s engineering graduates had some of the highest starting salaries of any college graduates, according to Payscale.com.
Although unemployment for college graduates is declining, underemployment—working a job that doesn’t require a college degree—is an increasing trend, according to a report by the Center for College Affordability, a non-profit based in Washington.
Upcoming graduates say the difference between finding a college-level job and being underemployed depends more now than ever on one’s college major.
“For every finance-related job to which I applied, the first question in interviews was always, ‘Why didn’t you study finance in school?’—even though economics is closely related to finance,” says Matthew Infante, an economics major and soon to-be graduate at Boston College. “One’s major matters a lot.”
Mohanty, 22, agrees with Infante, who received a job offer in November working in finance (he declined to say where).
“I think [finding a job] is a lot harder if you have another major besides business or engineering,” Mohanty, who also accepted his job offer in November, says.
There were 13 million more college graduates in 2010 than there were degree-requiring jobs. according to the Center for College Affordability. One in every hundred taxi drivers was a college graduate in 1970. Today, on average, 15 drivers have a degree.
Between 2010 and 2020, Richard Vedder, the author of the report, and his colleagues estimate a 31 percent boost in the number of college graduates, from 61 million to 80 million. Vedder reports that the increased number of college-level jobs will only rise about 15 percent in the same time.
“Maybe one in three will get a job that’s kind of cool, and two out of three will find themselves underemployed,” says Vedder, the Center’s director. “A few will find themselves downright unemployed.”
The laborforce particpation rate declined signficantly in April. That’s considered a bad indicator, except that it may suggest Baby Boomers—many who delayed retirement—are finally leaving the workforce, says economist Justin Wolfers, a fellow at the Brookings Institute. A generation of post-recession graduates could find the college-level jobs some have waited years to find.
“Over a run of months or even a run of years, labor force participation is declining,” says Wolfers. “The deeper question there is whether it’s declining due to demographic change—changes like the Baby Boomer finally getting around to retiring.”
Accompanied by a slowly improving economy, a generational turnover of jobs may hint at the optimism this year’s graduates have.
Katie Zubrow, another senior at Delaware, applied for about fifteen jobs. She had two interviews, and she’s still looking for a job. But she’s not sweating it. She returned from spring break and decided that if her interviews didn’t work out, she would enjoy the summer and resume her job search in August.
“I was like, ‘Okay I don’t have one [job] yet, I have a few interviews lined up, but I can wait a little. I just really want to relish my last month here,” says Zubrow, 22.
Zubrow, a communications major, will graduate with Mohanty at the end of the month and says her peers are not as concerned about finding full-time work right after graduation as last year’s class was.
Mohanty knows other non-business-or-engineering majors who, like Zubrow, are taking time off, working a summer job and
“There have been things in the news that say the economy is getting better, and I think people are pretty confident—they have internships, they have other experience, they can rely on that,” says Mohanty. “They’re confident, and they’re just waiting for the right opportunity to come up.”