College Graduates Punished by Economic Policy
Make no mistake about it, college graduates aren’t getting the short end of the stick just because of the economy. The policies of the Federal Reserve and the rest of the government are designed to create wage discipline, a fancy term for downward pressure on wages. This wage discipline as a deliberate policy is now more than thirty years old and the results are easy to see. We have college professors paid slightly more than McDonald’s workers. We have airline pilots who make a little more than twenty thousand dollars a year while flying as much as seventy-two hours a week. I’m sure you can think of more examples.
But these crippling salaries are just the beginning of problems. Studies show that when you start out working beneath your education, your salary never recovers.
And so, it seems, that today’s generation is less likely to make as much as their parents regardless of education or ability.
Is that really what we want for our young people and our nation?
College Graduates Are Increasingly Likely To Work Low-Quality Jobs | ThinkProgress
Today’s recent college graduates are more likely to work in jobs that don’t require a degree, pay little, and are part-time than in the past, according to new research by the Federal Reserve Bank of New York.
While it is common for graduates to work lower quality jobs right out of school and move up the longer they keep working, the share who find themselves in this position has risen while the quality has dropped. The underemployment rate, or the rate of graduates working jobs that don’t require a degree, has risen since 2001 and jumped sharply after the recession to the point where 44 percent were in these jobs in 2012. This “suggest[s] that it has become more difficult over the past decade for recent college graduates to find jobs that utilize their degrees,” the authors note.
Even worse, these non-college jobs are more and more likely to pay poorly. Well paid jobs that don’t require a degree, such as electricians, dental hygienists, or mechanics, are those that pay an average of $45,000 a year. Low-paid jobs, on the other hand, such as bartenders, food servers, and cashiers, pay below $25,000 on average. The authors report that “the share of underemployed college graduates in good non-college jobs has fallen sharply, while the share working in low-wage jobs%