In the US, as in other advanced economies, earning a college degree remains the best path to a good-paying job and a fulfilling career: The vast majority of jobs created since the Great Recession have gone to college graduates, while the wage gap between high school and college graduates is the widest it has been since economists began measuring it. Nonetheless, there are signs that the economic impact of the growing the number of Americans with college degrees is reaching the point of diminishing returns.
Meanwhile, employers have begun to talk about training “new collar” employees in roles that require digital skills but not necessarily college educations. This reflects both the realities of today’s tight labor market, particularly for tech talent, as well as a growing understanding that not everyone is cut out for college and that starting a college degree program without finishing it can be worse than not attending at all.
In that context, Bloomberg’s Jordan Yadoo highlights a new study from Georgetown University’s Center on Education and the Workforce, which finds that the number of “good jobs” held by people with associate degrees (the typically two-year degree granted by community colleges and vocational schools) grew by 3.2 million from 1991 to 2015, even as the number of workers in “good jobs” with just a high school diploma fell by over one million:
Last week, Bloomberg’s Jordan Yadoo called attention to some new Labor Department data showing that American men are enrolling in college at record rates:
Of the 1.5 million men in the high school graduating class of 2016, just over one million, or 67 percent, were enrolled in two- or four-year institutions last fall, according to new Labor Department data. That’s up more than 6 percentage points from 2012, surpassing recession-era levels when the weak economy pushed students to stay in school and wait out the downturn. It’s also the highest share on record in Labor Department data going back to 1993 and in an alternative series from the National Center for Education Statistics going back to 1960. …
The steady rise in male college enrollment since 2012 suggests that young men “seem to have gotten the message” that securing a stable job these days requires more than a high school diploma, according to Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce in Washington.
Carnevale is one of the authors of a report last year that underscored the essentiality of a college degree in today’s job market, finding that the vast majority of new jobs created since the end of the Great Recession had gone to employees with at least a bachelor’s degree. Other research has also pointed to the need for men, in particular, to pursue higher education in greater numbers.
This year’s crop of college graduates, some of the first recognized members of Generation Z to enter the workforce, are doing so at an opportune moment. In the US, the college wage premium has never been higher, meaning these grads stand to earn much more than their peers without degrees. The graduate hiring market is also robust, with CareerBuilder reporting last month that 74 percent of employers plan to hire recent college graduates this year, the best outlook since 2007 and seven percentage points above last year’s figure. In terms of pay, CareerBuilder found that half of employers plan to pay graduates higher salaries this year than last, and 39 percent will pay starting salaries of $50,000 or more a year, up from 27 percent last year.
However, the job search site also found that “some employers are concerned that new college grads may not be ready for the workforce”:
Seventeen percent do not feel academic institutions are adequately preparing students for roles needed within their organizations, a decrease from 24 percent last year. When asked where academic institutions fall short, these employers cited the following concerns:
- Too much emphasis on book learning instead of real-world learning: 44 percent
- I need workers with a blend of technical skills and those skills gained from liberal arts: 38 percent
- Entry-level roles within my organization are more complex today: 23 percent
- Technology is changing too quickly for an academic environment to keep up: 17 percent
- Not enough focus on internships: 17 percent
- Not enough students are graduating with the degrees my company needs: 12 percent
Meanwhile, Fast Company’s Lydia Dishman flags another new survey from iCIMS, which finds that graduates have high expectations for their job prospects, but even in today’s employee-driven labor market, these expectations may be a bit unrealistic:
Digiday’s Grace Caffyn shines a light on a noteworthy trend among advertising agencies in the UK, several of which have recently opened up their recruiting to candidates without university degrees, in response to the growing cost of higher education and the industry’s lack of diversity:
In January, Dentsu Aegis Network, JWT and CHI & Partners all welcomed their first non-degree candidates. Rather than looking at grades or job history, both JWT and CHI & Partners now review how candidates answer four questions (like, “Tell us about one brand that you think badly needs our help and why”) to gauge their understanding of the industry. Teams then select new starters from an interview day involving 50 candidates. These candidates do not necessarily need a degree beyond secondary school.
“We felt we were missing out on good people because of that qualification,” explained Fern Nott, head of talent at WPP agency CHI & Partners. “You don’t need a degree to be a good fit for advertising.”
At the same time as a bachelor’s degree has become a must-have for many jobs that didn’t used to require it, the cost of acquiring one coupled with the diminishing salary premium graduates stand to earn has led some observers to dispute the value of a college education in today’s job market. While the US job market is much kinder to candidates today than it was five or seven years ago, the outlook for recent graduates seems a mixed bag, with different studies taking different views of their employment prospects.
The latest news for graduates is good, however, with Michigan State University’s annual report on the graduate job market showing that for graduates of every level, hiring is up and starting salaries are also relatively high. Lauren Camera outlines the findings at US News and World Report:
Among many other things, the findings showed that the hiring of college graduates across degree levels is expected to increase by 23 percent, largely as a result of company growth and employee turnover. For those graduating with bachelor’s degrees, a 19 percent spike in hiring is expected. But the biggest hiring increases will be seen among those who’ve garnered associate degrees – a sector expected to see a 37 percent increase – and those with a master’s degree in business administration, projected for a 40 percent increase.
At least in the US, a college degree is no longer optional for employment in the professional realm. More Americans hold bachelor’s degrees than ever before (nearly a third of Americans over 25, according to the National Center for Education Statistics), and employers know it. A CareerBuilder survey conducted late last year found that employers were increasingly hiring college graduates for jobs that used to only require a high school diploma, and advanced degree holders for jobs primarily held by BAs. Now, CareerBuilder’s Pete Jansons presents more findings showing that small enterprises are also a part of this trend:
According to recent CareerBuilder research, more than 1 in 4 small business employers (26 percent) say they have increased their educational requirements for jobs over the last five years. One in five employers (20 percent) are hiring more employees with master’s degrees for positions that primarily had been held by those with college (4-year) degrees, and 3 in 10 (30 percent) are hiring more employees with college degrees for positions that primarily had been held by those with high school degrees.
Higher degrees are also influencing promotion decisions. Thirty-five percent of small business employers say they are unlikely or highly unlikely to promote someone who does not have a college degree.
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The student debt crisis is widely considered a generation-defining issue for American millennials. At the same time that college degrees are more of a requirement in the job market than ever before, they have become so expensive that some experts have questioned whether they are even worth the money anymore. Bucking the conventional wisdom on this subject, William G. Bowen and Michael S. McPherson chime in at Vox to dispute the claim that most college graduates are drowning in debt, along with some other oft-recited assertions about this issue. The real problem, they argue, is that many students are failing to graduate:
Powerful new data from the US Treasury department makes clear that the people who are most likely to get in trouble with debt are those who dropped out of college before they earned a credential, and who therefore have weak job prospects. Often they have borrowed relatively little money but have few resources and no doubt little enthusiasm for repaying what they owe. Dropouts are almost three times as likely to default on their loans as graduates are. It is this subgroup’s debt that ought to be driving the conversation, not the debt of the “average” college student. …