Underemployment of College Grads

By Alex Chediak Published on March 14, 2024

The debate over the value of a college education took another twist with a recent data dump: Just over half of recent four-year college graduates, 52 percent, are underemployed a year after they graduate. Okay, so maybe it just takes a while to find the right fit. But here’s the kicker: A decade later, 45 percent of them are still underemployed. That’s not a big reduction from 52 percent.

First Job Matters

Were these 45 percent underemployed for that entire first decade out? Mostly, and sadly, the answer is yes. Among grads with a solid first job, four out of five (79 percent) were still in a college-level job five years out. Among those, 86 percent were still in a college-level job ten years out. In other words, if you start off strong, you’re likely to stay strong. Meanwhile, three out of four grads (73 percent) who are initially underemployed remain so ten years after graduation. That’s quite a correlation.

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You’re only underemployed if you’re working a job that doesn’t usually require a bachelor’s degree. What about someone who majors in one field, but ends up working in another? For example, my wife majored in biology. She was thinking about pre-med at the time, but then opted for business, having enjoyed her time helping to run the main campus store. She was hired into a management training program with AT&T. Not surprisingly, the company only hired college grads. She wasn’t underemployed.

What about those who leave the labor force, either for graduate school or to be, say, caregivers for their children? They don’t count either because they left the labor force altogether. Also, the study focuses on workers who stop at a bachelor’s degree. The 52 percent and 45 percent figures I noted earlier are among this crowd.

College Major Matters

If the first job really matters, and it does, are there specific majors that are more likely to set you up to land a better one? The researchers found that grads with degrees that involve, in their words, a “substantial amount of quantitative reasoning” fared best. Computer science, engineering, math, finance, and accounting are listed in this category. Right behind these were education, nursing, and other health-related fields.

Part of this correlation is that harder classes produce smarter graduates. Such graduates make better employees because they’ve shown they can endure more rigorous training.

Which majors didn’t fare too well? Public safety and security, recreation, and wellness studies or general business fields (like marketing) are associated with much higher levels of underemployment: 57 percent or higher. (See graphic below.) 

I’ve been working in higher education for twenty years and I didn’t know that public safety and security was a college degree. It doesn’t seem like you should need a four-year degree to jump into that field. Ditto for recreation and wellness studies (whatever those are). So, part of the problem may be the proliferation of nifty-sounding degrees that may attract students, but don’t teach very much in the way of hard skills.

You can follow the numbers here also. Undergraduate enrollment began to decline in 2012. Since then, colleges and universities have added 41,446 degree or certificate programs — a 21 percent increase. They’re understandably trying to get more students in the door.

Some of these new programs make a lot of sense — cybersecurity, for example. We’ll clearly need more of these folk than we have in the past, and to be qualified to work in this area, you need rigorous training. Analytical skills, programming skills, quantitative reasoning (math) skills. I would include oral and written communication skills since you’ll need to work with and persuade others, including colleagues outside your specialization — all great stuff to learn at a four-year college.

But a bachelor’s in Sports Communication? Not to be outdone, Temple University offers a masters in Sports Business. Never mind that the real wizards behind modern sports teams are highly skilled in statistics, math, and legal aspects of business.

Internships Matter

Fulfilling an internship while completing your college degree makes a huge difference. An internship helps, regardless of your major, but the help is even greater in majors known for producing lower rates of underemployment. For example, engineering reflects 29 percent underemployment without an internship versus 16 percent with an internship. Likewise with a math-intensive business degree (31 percent vs. 16 percent). For those in other majors, the gap is smaller.

But there’s always a gap! An internship boosts your industry-specific skills. It lets you apply classroom knowledge in a real-world context. It allows you to develop confidence and competence navigating professional environments. It gives you a chance to develop a level of professionalism that will be expected in the workforce. It’s a mini job that sets you up for another job. 

Escaping Underemployment

If you’re underemployed and frustrated, what can you do? A few things:

  • Look for a better job. If you’ve been out for a few years, but not really doing what you hoped, you need a better entry-level position in your preferred industry. Even if it means a pay cut in the short term. You want your resume to be able to tell a story so that those looking at it five to ten years from now will be able to see that you’re ready for the next jump. Maybe this means you take that six-month internship you never had in college.
  • Boost your quantitative skills. Look for short-term courses that offer certificates. Or bootcamps. Or online training programs. It’s not just about strengthening your resume; it’s about gaining the skills that strengthen you as you prepare for higher-level jobs. (This may not be as applicable for certain lines of work.)
  • Consider relocation. Some regions of the country have greater opportunity, especially for certain industries.
  • Consider graduate school. Biology, for example, stood out in the study as a STEM major that had higher underemployment. However, if biology grads advance to medical or dental school, it’s a different story as they become able to access new lines of high-paying work. As with an undergraduate degree, those considering this route should factor in cost and future earning power.

Final Takeaways

If you have loved ones going to college soon, encourage them to lean into academic excellence. A strong liberal arts education is fantastic. But at many schools, these majors have been eviscerated, replaced by fluff courses that don’t help students grow in critical thinking, reasoning, and communication. As a result, employers find such graduates less impressive.

You want to take the hard classes from the hard-nosed professors who push you to be great. Engage the college’s career office early and often. Network with those in the fields you hope to pursue. Start chasing internships early. And pray for God’s leading and open doors.

 

Alex Chediak (Ph.D., U.C. Berkeley) is a professor and the author of Thriving at College (Tyndale House, 2011), a roadmap for how students can best navigate the challenges of their college years. His latest book is Beating the College Debt Trap. Learn more about him at www.alexchediak.com or follow him on Twitter (@chediak).

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