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No Recession for College Graduates

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USAF Academy Graduation Hat Hurray Toss, Thunderbird Fly OverI’ve been fortunate that most of my local friends have not been affected by the economic downturn. I’m especially fortunate because I have not been affected by the economic downturn. While the companies we work at have downsized, for the most part, we’ve all escaped unscathed in what’s clearly the worse economic decline in our lifetime. It’s difficult to explain why we were so fortunate, many of my friends work in defense which is practically hallowed ground in times of war, but I saw a chart last week that might explain it:
BLS Unemployment Rate by Education, July 2010

The unemployment rate for people with a bachelor’s degree or high is only 4.5% (the vast majority, if not all of them, of my local friends have at least a bachelor’s degree), which is around where economists believe structural unemployment should be.

The specific numbers for unemployment rate (based on July 2010 BLS data) are:

  • Less than a high school diploma: 13.8%
  • High school graduate, no college: 10.1%
  • Some college or associate degree: 8.3%
  • Bachelor’s degree or higher: 4.5%

I’ve argued in favor of college and against going to college, but I’ve always stuck to one point – going to college is a very safe decision if you can afford it. You aren’t guaranteed riches but you’re almost guaranteed not to become insolvent, despite the rising costs of a college education.

On the flip side, look at the employment-population ratio:

  • Less than a high school diploma: 40.8%
  • High school graduate, no college: 55.4%
  • Some college or associate degree: 64.1%
  • Bachelor’s degree or higher: 72.7%

It’s dangerous to read too much into these figures because education is just one factor among many as to why someone could be unemployed. However, I think it’s fair to assume that, all other characteristics being equal, the more education the better.

Thoughts?

(Photo: walkadog)

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26 Responses to “No Recession for College Graduates”

  1. cubiclegeoff says:

    I would be curious to see how many of the individuals that are employed and have a college degree are underemployed. This is an area that’s generally ignored, but would be important to see. And if individuals are underemployed, maybe the college degree even helps them when they are competing for those low-level jobs.

  2. zapeta says:

    I know people who haven’t been able to get the entry level jobs that are available because of their college education. However, I think the pros of getting a college education outweigh the cons. I’m sure there are many situations where having the degree will set you ahead of others.

  3. live green says:

    I think the unemployment may be lower for college grads, but that doesn’t necessarily guarantee a good job. I know some grads who had to take retail jobs with college degrees because they didn’t pick a major with lots of job opportunities. After spend thousands of dollars, it may not have been worth it for some of those individuals to get a degree.

  4. Stefanie says:

    I think that a college eduction is basically always a good idea, but it is no guarantee of anything. After I got my BA, I worked at some random non-degree required jobs because I needed a paycheck and that was it. Now that I’ve received my PhD and my partner her MA, we are having a hell of a time finding work at all. She has applied to a lot of jobs that are perfect for her level of experience in and out of grad school and has not even gotten an interview. I just got a very part time adjunct teaching gig and am happy but way underemployed.

  5. freeby50 says:

    The underemployment levels are higher for any education level. Yes there are underemployed people with college degrees but there are also underemployed people without college degrees.

    Unemployment is especially high for younger people. For teens age 16-19 unemployment is 25.9% and for those age 16-24 its 18.6%.

  6. Demonstrable says:

    I currently fall into that 4.5% and prior to that I would have been considered underemployed.

    What I’ve noticed among my friends and peers is that almost all of them with bachelor’s degrees have gone back to school for more advanced degrees instead of trying to get into the job market. I just wonder if it will pay off for them or if they will just end up underemployed with a larger amount of student loan debt.

    Personally, getting my BS didn’t cost me very much (financial aid, grants, scholarships) so I’m glad I did it, but I wish my college would have been more help in finding me a “real” job after graduation.

    Now I find myself wondering if I would be better off taking out more loans and going back to school for an advanced degree or just continuing the daily job search until I find something.

  7. Christina Moore says:

    Unemployment rates may be higher for all individuals right now, however, those with a university diploma are much better off. As a recent graduate, who was lucky enough to find a job, know that if I hadn’t gone to school, I would not be where I am today.

  8. I agree with your chart completely! Most of my friends are dentists/optometrists/or pharmacists..they can’t never be out of a job.

  9. College is a no brainer for sure.

    Even with 10% unemployment, 90% are working. So at the end of the day, things are all right. At least, that’s what my favorite restaurant house told me when i could book a dinner reservation on a Wed night!

  10. FrugalGuy says:

    I agree a college education can potentially open more doors than without one. However, advanced degrees can quickly lead to the problem of being over qualified. In addition, there can be an enormous financial burden associated with additional training and especially in this economy living debt-free is the way to truly prosper.

    ~FrugalGuy

  11. Scott says:

    Its a tough call. I graduated in 2008 with a degree in music education. I can’t find a job, despite graduating with honors. I substitute teach in multiple districts, but I can’t find a full time job. I am lucky if I can get an interview. And now I have ran out of forbearance and am expected to pay my loans back. Most of my loans are private, and I have over $100,000 in loans. I am just depressed as hell about it. Honestly, if I could do it over again, I would have stayed home, went to a community college and developed some sort of trade. I think education can be beneficial, if society can guarentee that there will be opportunities to use the skills you pay rediculous amounts of money on to go to school. It really pisses me off!

    • Ed says:

      Thats a really good point man. We pay all that money and we put all our efforts into getting a Bachelor Degree and in the end our schools dont even help us to find a job. They are just interested of getting our money nothing more.

    • Rick says:

      Music Education, dude? You were asking for prozac and poverty after graduating!

      I feel bad for your choice in major, but not for you.

    • Eric says:

      I understand completely. I earned my Bachelors degree in May of 2009 in History and Secondary Education with honors, then went on to complete Student Teaching in the fall of 2009. After finishing in December, I have been looking for work for 14 months. It’s always the same old story, “don’t call us, we will call you.” When I am lucky enough to land an interview, they pick a candidate with more experience. I wonder what will happen to education when all of the seasoned teachers retire without allowing new teachers to gain experience to ease the transition… Anyway, I’ve been thinking about going back to get additional certifications in Special Education or Elementary Education, but with the proposed GOP cuts to education I am beginning to think the entire field is a crap shoot. I almost find it humorous that we are in desperate need of teachers, the president even went as far to encourage people to enter the profession in the State of the Union address, but he didn’t mention no one is hiring. Since I began working at Starbucks, I frequently discuss the state of education with my customers, and one asked me, “how can they not be hiring, we are in the middle of an education crisis…” Take a moment to feel the irony in that. I agree with you, words can’t describe how much this pisses me off.

    • kthomas says:

      You’re having poor luck because you’re in music, and education is tightening down on extra curriculars (which i’m sure you’re well aware) while making music/art/p.e. less of a priority… unfortunately it’s just another example of the state and national debts harming the education field… While education is something to permanently and consistently invest in, lawmakers are pushing it to the side and making cuts… Love politics

  12. Chris says:

    I don’t know if I agree with this article. Yes, college graduates may be employed, but what jobs are they getting?

    As a recent graduate, my personal job hunt was very disheartening. I called firm after firm, asking if they had any open positions. Only one was even considering hiring, and when I called back was told they weren’t going to add anyone to their staff after all. The job I did find eventually, after months of searching, was waiting tables at barely above minimum wage. I was lucky to graduate debt-free, and can’t imagine what life would be like if I hadn’t.

    I talked to one friend I had known in school, and his story was similar. He had applied for a job in Dallas, and was informed that he was not hired. There were over two-hundred applicants for that single position.

    I don’t know what year the writer of this article graduated, but the job market for recent graduates who are job-hunting is very tough. Low income is better than no income, but with student loans and college debt to repay, are graduates really better off?

  13. CreditShout says:

    Great chart! This is definitely a comfort for me. I need to get a job right away to pay off my debt!

  14. Tracy says:

    I don’t know about a college degree helping much. I have a B.S. in psych (never get a degree in social services people and please spread the word) and an M.B.A. I’ve been looking for employment for over a year now. I don’t even get calls for entry level positions despite me needing the experience and forget about anything else. I would love to be underemployed just to at least be employed.

    Also I have to factor in the cost of childcare.

  15. JY says:

    I feel all of your pain. I relocated back to NYC from Taiwan about 4 months ago and have been looking for a job ever since. So far the job hunting process has been an ordeal, even though I graduated from a top-tier college, know two foreign languages, and have 3 years of work experience. I was fortunate to have been invited to random interviews for various jobs and was hired for a couple of them. But they were all crappy. I decided to leave those two jobs and now I remain jobless. I opted for graduate school instead and am thinking about teaching English abroad again. FOR THOSE WHO ARE DESPERATE FOR A JOB THAT PAYS WELL, CONSIDER TEACHING ENGLISH ABROAD. I lived comfortably and was able to save up some money when I was in Taiwan. If you have time to spare, I assume all of us have since we are unemployed, check out the following site: http://www.eslcafe.com/

    On a brighter note, we are all in the same boat. You’re not alone so cheer up!

  16. Anonymous says:

    I have a bachelor degree in accounting and finance, just graduated in June of 2009. For people with Bachelor degree who can’t find jobs, the few main reasons are: lack of internships, low GPA(or bad resume), or low demanding major like music education?

    Seriously, what were you thinking about going into music education taking out 100k of debts? If you have a strong interest, perhaps go to a state school or minor in music instead of major…

    I graduated nearly debt free while attending a private university 30k+(scholarship, grants and aids). My starting was 50k out of school, and I was laid off this year but found a better job(56k).

  17. YZ says:

    I have a bachelor degree in accounting and finance, just graduated in June of 2009. For people with Bachelor degree who can’t find jobs, the few main reasons are: lack of internships, low GPA(or bad resume), or low demanding major like music education?

    Seriously, what were you thinking about going into music education taking out 100k of debts? If you have a strong interest, perhaps go to a state school or minor in music instead of major…

    I graduated nearly debt free while attending a private university 30k+(scholarship, grants and aids). My starting was 50k out of school, and I was laid off this year but found a better job(56k).

  18. Pittbaby says:

    @ Music Education ….reality sucks right ???
    I always laugh when i read about people not getting a job despite spending $100,000K on a degree in Arts or Language. If you want to follow your dream keep it in mind that the term the suffering artist is a reality. I think its absolutely important to have people like you but please dont put yourself in 100K debt for a job that may not pay more than 30k a year for the first few years and that are few and far between

  19. Stapleford says:

    I’m not a big fan of this thinking. One of the issues is that we have too many folks who do. My MBA came later in life, I did it because it was something that blocked a period of time when work was scarce, it kept me busy and productive. Unfortunately, the cost way outway the benefits. I will be paying off this degree for years to come and that is if I can stay employed which is tough to do during this recession. Bachelor degrees are no longer the exception to suffering artist syndrome, this group includes suffering engineers, business disciplines, dentists, teachers, salespeople, etc. We have 23 year olds staying in school and 45 year olds returning to avoid the hardship of finding work or making minimum pay.
    Its as if there is no logic behind spending money on education anymore, the more the better. Putting leans on homes, cleaning out savings, loading up 22 year olds with thousands in debt. Its just insane. My bachelors degree cost 2K a year (inc room&Board). It made sense back then, Im not certain it does anymore. The general thinking that more education is better is fine, but think twice, long, and hard before getting it and determining how it is going to get paid for. Debt is not always the solution, we just learned that in this latest economic correction and unfortunately, New America.


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