Hope Sinks

With student loans that exceed many mortgages, a whole pile of recent college grads are facing a beginning to their life’s work at a fraction of the inflation-corrected pay their parents received when they began their careers. The older folks expected and for most years got solid annual raises and a decent promotion every three to five years. Their kids got jobs that don’t come with opportunity or advancement. Pay? Too many at or near minimum wage.

“The majority of Class of 2014 college graduates have now entered ‘the real world’ and are currently working – but more than half (51 percent) of that group are in jobs that don't require a degree, according to a new CareerBuilder survey. This includes 45 percent of four-year degree graduates and 57 percent of associate degree graduates.

“Sixty-five percent of recent college grads are employed, 4 percent are in internships, and 31 percent are not working at all, although many in the latter group simply haven't started their job search or are already back in school to pursue a higher degree.” AOL.com, October 9th.

If your future “raises” are predicated on where you start, that’s a lifetime of bad news for these grads. Even this is a temporary lull in the availability of “good jobs,” the passing years without entering that mainstream “good job” universe carry two distinct risks: first, there may be years of low pay before “better” happens, and second, these grads with low level work experience will be competing in a few years with more college grads with more recent educated skills. And think to the hit on self-esteem and the drag of paying back those loans without the income required to make those payments tolerable.

And think of the goods, services and homes those young folks aren’t buying anytime soon. Money that isn’t going into the economy, that won’t create new jobs and that doesn’t circulate meaningful cash flow into the economy.

But they aren’t giving up. Many are even trying to continue to upgrade their skillsets. “Transitioning from a college environment to the work force isn't always smooth for recent grads, and often times these new workers are navigating uncertain career waters as they find their bearings. Among graduates currently working, 51 percent said their job is related to their college major. Of those who are not working, only 43 percent indicate they are currently looking for a job. Salary expectations are modest for most; only 44 percent expect to make more than $30,000 their first year out of college…

“Continuing education is a factor for many graduates regardless of their current employment status; two-thirds (61 percent) are already pursuing an advanced degree or plan to do so in the next year – 66 percent of associate degree earners and 56 percent of 4-year degree completers… Of those not currently working, 47 percent say they are pursuing an advanced degree, and 19 percent say they plan to in the next year.

“Of those currently working, 43 percent say they are pursuing an advanced degree, and 17 percent say they plan to in the next year…. Of those graduates who say their current job doesn't require a college degree, 36 percent say they are currently pursuing an advanced degree, and 22 percent say they plan to in the next year.” AOL.com.

After years of outsourcing, what we’re seeing is manufacturing returning to our shores, but instead of generating income for workers, the resulting revenues are going to the one-percenters who own the automated machines that were built to replace labor! My friend, business consultant Dennis Duitch, reminds us that: “The U.S. is undergoing a fundamental transformation… starting in 2000 when advances in technology & automation, in trade (especially with China), and in the outsourcing of American jobs abroad came together to produce an inflection point. The net result is that a significantly smaller fraction of the population benefits from growth, and accelerating technological advances are displacing workers so fast that new job creation can’t keep up…creating a fundamental challenge to the legitimacy of free market capitalism.”

“The Federal Reserve Bulletin [for September] reports that, over 25 years, wealth gains have gone to the top 3% of income distribution (‘the small group who own & control corporations, who are hogging a record percentage of the country’s wealth for themselves’), while the next 7% stayed even and the bottom 90% have experienced a steady decline.  But no political party gives any evidence of caring or willingness to adopt policies for restructuring, and polls reflect ‘growing doubts about the beneficence of the market and the ability of the system to distribute rewards of growth to those who make growth possible.’”  New York Times, September 23rd. Bottom line: no one is trying to un-tilt the playing field to give ordinary workers a break, and as for those entering the job market, we seem to be sending a big “we really don’t care about you or our future” message.

We could be doing more, so much more, but we seem to find betraying our children to be the easy button. We won’t help with loans and financial aid. We won’t invest in job-creating research and infrastructure. We will continue to cut educational programs, financial aid and basically fulfilling all those promises of the rewards of school and hard work we made so many times.

I’m Peter Dekom, and how good do you feel to live in a system that seems to endure on the ability to eat its young?