Yesterday we showed the good side of college by presenting those majors that result in the best starting salaries fresh out of college. Now the bad side.
According to a survey by Accenture, more than 40% of recent US college graduates are “disillusioned”, “underemployed” or “need more training” to get on a career track. But… what about those tends of thousands in student loans, or at least the remainder that was not spent on Apple products? Turns out the marginal utility of a college education is dropping as fast as the total notional in Federal student loans is rising. What is most ironic, is that according to the survey, many of the respondents end up at jobs that do not even require a college degree. Of the respondents, 34% said they owed $30,000 or less, while 17% had between $30,000 and $50,000 in student loans.
So what is the solution: why more degrees of course!
Nearly half, 42 percent, of recent graduates expect they will need an advanced degree to further their career and almost a quarter are already planning to take graduate courses. More degrees, more debt, more dead end opportunities for a generation that is stuck in place not because it is underqualified, but because of barriers to entry erected by those already in the workforce, especially those aged 55 and over who courtesy of Bernanke’s ZIRP4EVA can’t afford to retire, and who as the following chart shows are employed more now than ever. The losers: those aged 20-24 whose employment level has not budged in the past four decades despite a demographic boom that puts millions more into precisely this age cohort with every passing year. Where are those who are not in the labor force (and not playing Call of Duty)? Why in college of course.
More from Reuters:
“For our nation’s youngest workers, as well as for the workforce at large, there is a real need for employers to reexamine how they hire, train and develop their employees,” said Katherine Lavelle, of the global management consulting firm Accenture, which conducted the survey.
More than half of graduates said it was difficult finding a job, but 39 percent were employed by the time they left college. Sixty eight percent said they are working full time, while 16 percent are in part-time positions.
The top industries that graduates wanted to work in were education, media and entertainment and healthcare.
Just over half, 53 percent, of graduates found full-time jobs in their field of study.
In addition to being underemployed many graduates thought they would have done better in the job market if they had studied a different major, and more than half also intended to go back to school within the next five years.
The biggest disappointment: the difference between perceptions about wage potential and reality.
The survey uncovered a gap between what students expect to earn in their first job and their actual salary. Only 15 percent of this year’s graduates think they will earn less than $25,000 but a third of recent graduates said they make that amount or less.
Will any of this change the sad reality where even the hope of a lucrative future for most involves drowning in debt? Of course not. After all in the new normal, “money dilution is prosperity” and “debt is wealth.” If this is the case for sovereign nations and corporations, why not for the individual as well. Because it is not as if anyone expects any of the record outstanding debt to ever be repaid.