Economy

College Grads are Still Working Jobs That Don't Require a Degree

There are plenty of depressing statistics displaying -- in excruciating detail -- the plight of Millennials graduating into the current economy. From the difficulties of paying off soaring student debt to the slow search to land a good job, our economic prospects can seem bleak.

In many respects they are: On top of debt and a 9.6 percent unemployment rate for 20 to 24-year-olds, there's a dearth of degree-requiring jobs. In fact, according to a 2014 study, over half of employed 2014 college graduates were working jobs that didn't require a college degree.

But 2015's graduating class could prove an exception in the trend.

"The labor market for college graduates is improving," according to researchers at the Federal Reserve Bank of New York. "After declining for nearly two years, openings for jobs requiring a college degree have picked up since last summer."

By looking through the Conference Board's Help Wanted OnLine jobs database, researchers found that since last summer, the demand for college-educated employees has picked up by more than 10 percent. That's helping drive down both general unemployment and underemployment––where the worker is overqualified for the position––and potentially providing some relief for graduates steeped in negative statistics.

There are a couple of different job market trends to understand in the wake of the 2008-2009 recession that have helped define the Millennial landscape for the past six or seven years. For one thing, both degree-requiring and non-degree jobs rebounded at around the same time, shortly after the recession hit. But within two years, degree-requiring jobs had started lagging behind non-degree jobs, and postings began leveling off around 2013, the researchers reported, even declining a bit in the middle of last year.

At the same time, the demand for non-degree jobs rose somewhat steadily during that same period. Those two factors led to what the researchers describe as a drop in unemployment since 2011, with a concurrent rise in underemployment over the same period.

"This divergence between falling unemployment and rising underemployment between mid-2011 and mid-2014 suggests that more college graduates were finding jobs during this time, just not necessarily good ones," they wrote.

Such a trend has obvious problematic implications, like an overqualified workforce working minimum-wage service jobs, and a shrinking job market for uneducated workers, who often must rely on low-wage work and are being pushed out by college grads.

But with an uptick in degree-jobs, the numbers are beginning to shift with underemployment rates dropping 2 percentage points since last June. Researchers note that it's important to keep things in perspective by remembering that a 44.6 percent underemployment rate is still high by historical standards, certainly higher than the 38 percent it was in 2000. They also note that "significant market slack remains, so continued strong growth in the demand for college graduates may well be necessary to make a more serious dent in the underemployment rate." While it may seem hard to get that excited about a 2 percentage point drop, any increase in demand for college-educated Millennials––especially one that appears to be gaining steam––could have broad implications for the 3.5 million students expected to graduate this year.