More than half of America’s recent college graduates are either unemployed or working in a job that doesn’t require a bachelor’s degree, the Associated Press reported this weekend. The story would seem to be more evidence that, regardless of your education, the wake of the Great Recession has been a terrible time to be young and hunting for work.
But are we really becoming another Greece or Spain, a wasteland of opportunity for anybody under the age of 25? Not quite. What the new statistics really tell us about is the changing nature, and value, of higher education. […]
As the AP notes, recent graduates are now more likely to work as “waiters, waitresses, bartenders and food-service helpers than as engineers, physicists, chemists and mathematicians combined.” This is a problem for any number of reasons, but here are two big ones: First, a degree is more expensive than ever, and students are piling on debt to finance their educations. It’s much harder to pay back loans while working for tips at Buffalo Wild Wings than when you have a decent office job. Second, when college graduates take a low-paid, low-skill job, they’re probably displacing a less educated worker, For every underemployed college degree holder, there’s a decent chance someone with just a high school diploma is out of work entirely.
So is a college education simply less valuable than in the past? In some respects, yes. According to the Census, the number of Americans under the age of 25 with at least a bachelor’s degree has grown 38 percent since 2000. Not nearly enough jobs have been created to accommodate them, which has resulted in falling wages for young college graduates in the past decade, as well as the employment problems we’re now seeing.
That said, not all degrees are created equal. The AP reports that students who graduated out of the sciences or other technical fields, such as accounting, were much less likely to be jobless or underemployed than humanities and arts graduates. You know that old saw about how college is just about getting a fancy piece of paper? Not true. For an education to be worth anything these days, it needs to impart skills.
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There are ways that companies can try to minimize the damage when they eliminate jobs. For instance, don’t announce that you’re cutting jobs without identifying who’ll be affected; that makes every employee (including your best performers) anxious and exacerbates the damage. Companies that behave humanely—by providing generous severance packages and allowing displaced employees to say goodbye to colleagues rather than marching them out the door—are likely to see a smaller hit to morale. Well-run companies also communicate clearly about why they’re eliminating jobs, and share the pain by cutting senior executives, not just front-line workers.
The larger picture—the new “Great Game,” if you will—is about the speed of America’s decline from the heights of hegemony to the more earthly altitude that 21st century gravity will impose. This is not a matter of choice: Relative decline has already occurred—it depends on how you measure it. For instance, in terms of “percent of global output,” the U.S. economy has been in relative decline ever since 1946, when it represented more than 50 percent of global GDP. Today, the U.S. is at about 20 percent, and projections suggest China will match that slide in about 2015.
But the more serious measurements—potential growth rates, GDP per capita, GDP itself, only turned south relative to other global competitors recently.