Great Expectations

A year ago, Forbes Magazine (May 2, 2013), cited an Accenture study on the great disconnect between the expectations of young men and women who are about to graduate from college and enter the workforce and what actually happens when (if?) they do. Accenture repeated the study in March of this year. CBS radio reports (May 6^th) tells us that with this new report, nothing has changed, and if anything, the expectations of these Millennials are likely to fall even farther short than their compatriots who graduated last year.

• Eighty percent of this spring’s graduates expect their first employers to provide them with a formal training program, but less than half of respondents who graduated in 2012 and 2013 report that their employers provided one.
• Eighty-four percent of 2014 graduates expect to find work in their chosen field. Sixty-seven percent of 2012 and 2013 graduates say they are working in their chosen field. [But see the statistics below]
• Among 2012 and 2013 graduates who have been unemployed since graduation (13 percent), 72 percent expect to go back to college within the next five years and 41 percent believe their job prospects would have been better had they chosen a different major.
• Forty-five percent of 2012 and 2013 graduates with a two-year degree say they will need to earn a four-year degree to get the job they want. (Accenture poll results cited in The Chronicle of Higher Education, May 8^th)

There are other harsh realities when the next generation enters the workforce. About a third expect to continue living with their parent, but just under half are actually forced to go that route. Unemployment is still higher than it should be for these grads: “[In April the Labor Department] said the unemployment rate for 2013 college graduates — defined as those ages 20 to 29 who earned a four-year or advanced degree — was 10.9 percent. That was down from 13.3 percent in 2012 and was the lowest since 7.7 percent in 2007… But unemployment for recent grads was still higher than the 9.6 percent rate for all Americans ages 20 to 29 last October, when the government collected the numbers.” DallasNews.com, April 23^rd.

These unemployment statistics give employers the feeling that they don’t have to pay their new hires particularly well (except for a few stars at the top of the academic food chain) and most certainly don’t need to waste much money training them. And trust me, the big loser is the U.S. economy. As our educational opportunities and standards decline, the hope is that entry-level workers will have their skillsets upgraded consistent with the way American companies trained their employees before the Great Recession. Nope! They’d rather save a few bucks, and dump their unproductive workers with the hungry mouths waiting at their doors. The net result is that the American workforce continues to be less competitive with foreign counterparts every day.

While only 15% of college grads expect to earn less than $25,000 a year, that is the fate of roughly one third of them. Young graduates with bachelor’s degrees are also discovering how “generic” too many employers think of B.A. or B.S. degrees. “[In] a report last year, the McKinsey & Company consultancy found that 41 percent of graduates from top universities and 48 percent of those from other schools could not land jobs in their chosen field after graduation… The Labor Department reports that 260,000 college graduates were stuck last year working at or below the federal minimum wage of $7.25 an hour. That’s down from a peak of 327,000 in 2010. But it’s more than double the 127,000 in 2007, the year the recession began.

“In a study last year, economists at the University of British Columbia and York University in Canada found that college graduates were more likely to be working in routine and manual work than were graduates in 2000. The researchers concluded that technology was eliminating some mid-level jobs that graduates used to take. The result is that many have had to compete for jobs that don’t require much education.” DallasNews.com. Internships produce jobs in fewer than half those who participated in such programs.

“One other gap between expectations and reality: Despite numerous studies showing that there is a high demand for graduates with engineering and computer science degrees, new grads most want to work in education, media and entertainment, and healthcare…  [Further, only] 18% of pending 2013 grads plan to get a graduate degree to get ahead in their career. By contrast, 42% of grads who are already working say they plan to get a graduate degree.” Forbes. Their chosen undergraduate degrees, expensive enough, are simply not enough. Graduate degrees cost even more money! Frustration, crushed expectations, low pay and work well-below levels of training.

What’s more, when a grad starts with low pay at the beginning of his or her career, the promotions and wage/salary increases that follow are based on those smaller numbers and lesser jobs. This creates a lifetime earnings ripple effect that seriously reduces overall economic well-being for the rest of their lives. Add mortgage-size student loans to the mix and you have consumers with less to spend, delays in buying homes are larger ticket items, and a general malaise that will impact the political spectrum for decades to come.

Fewer consumer dollars, and businesses have to adjust their cost structures, keeping a downward pressure on pay scales and employee benefits and training, an endless cycle creating a downward spiraling self-fulfilling prophecy. Unions in the private sector are almost gone, and the pressure to increase the minimum wage are seeing a strong backlash from conservative moneyed interests able to block legislation at the pass. Education is increasingly unaffordable, and folks with bachelor’s degrees are now competing for jobs that really only require a high school education. High school grads are butting up against college grads, and dropouts are being pushed out of any meaningful hope to earn an honest and reasonable livelihood.

If there is a solution, it is for the government to reinvent how society provides an education to its qualified youth without breaking them financially. It is a time for the government to invest in research and infrastructure to create the kinds of jobs that provide long-term quality jobs and produce new technologies and economically efficient infrastructure to make America as competitive as it used to be. And we really need to be informing our student population as to what they really face in the work world if they do not plan their educational paths properly.

I’m Peter Dekom, and when are we going to stop acting like a country that cannot win, cannot compete and cannot provide real job opportunities for our coming generations?