The Mal-Employment Factor

College graduates with advanced degrees are working as bartenders and baristas.  It’s called mal-employment and currently impacts approximately 1.94 million graduates under the age of 30, according data compiled by Andrew Sum, director of the Center for Labor Market Studies at Northeastern University.  Sum said mal-employment has significantly increased over the past 10 years, making it the biggest challenge facing college graduates today.  In 2000, approximately 75 percent of college graduates had jobs that required a college degree. Today that’s closer to 60 percent.  Though the economy is growing and new jobs are being created, June graduates are not likely to see major improvements.  Nearly 1.7 million students are expected to graduate this spring with a bachelor’s degree and 687,000 with a masters, according to the U.S. Department of Education.  “We are doing a great disservice by not admitting how bad it is for young people (to get a job),” Sum said.

Consider the plight of G.C.,  a 2009 graduate of Brown University with a degree in comparative literature.  She works as a part-time administrative assistant doing data entry for $10.75 an hour and owes approximately $80,000 in student loans.  According to her, “I’ve applied for 400 jobs at least, and probably closer to 500.  I’ve had about six or seven interviews.  Even though my degree is in comparative literature I also did a lot of coursework in psychology and education and so I would really like to merge those two — teaching kids in a nonprofit setting.  The process of looking for work has really made me hone in on what exactly I want to do.  I’ve learned a lot about myself and a lot about I guess where my self-esteem comes from.  I’ve realized that a lot of my self-esteem has come from my education or my credentials or my profession.  And I’ve kind of been working on feeling good about myself even if I don’t have a job, feeling like I’m a worthwhile and intelligent and capable person even though I’m underemployed.”

Mal-employment is not a new phenomenon. Typically, there is an expectation that young people lacking experience will have to work their way up from an entry-level job.  Of late the situation seems to be worsening.  In 1980, approximately 30 percent of college graduates were mal-employed, while the current rate is estimated to be as many as 50 percent.  It’s tempting to assume that this rate will fall with unemployment, but these workers are not sure to be out of the woods even if they eventually get jobs they were educated for.  According to a Yale study, even after 17 years, mal-employed people earn 10 percent less than their peers.

Sum notes at the start of 2011, there were twice as many four-year college graduates working as waiters and bartenders as engineers.  The problem isn’t about college graduates getting their hands dirty.  To be more precise, the issue is that people who paid for a college education aren’t getting the expected return on investment – and may never get it.  Then, there is the matter of debt.  A typical college student graduates with more than $4,000 in credit card debt and $24,000 in student loan debt.  A 2009 survey of workers aged 22- to- 33 reported that they are carrying an average of more than three credit cards, 20 percent have an outstanding balance of more than $10,000, and 25 percent believe they will never pay off credit card debt in their lifetimes.