Opinion | Class of 2024, It’s Not in Your Head: The Job Market Is Tough

Here is a brutal fact for the college class of 2024: There aren’t enough college-level jobs out there for all of you. Some of you will snag them. Others will have to settle for jobs that don’t require a college education. And history shows that many of those who start out in a job that doesn’t require a college education are still toiling in that kind of job a decade later.

One mystery is why college grads’ lifetime earnings are so much higher than those of people with just a high school degree or less, if indeed so many college grads don’t do college-graduate-level work. I’ll get to that in a minute. I’ll also finish on a slightly hopeful note.

I invite college seniors to tell me about your job searches and how you feel about what you learned or wish you had learned in college by filling out the form below. Parents and employers are also welcome to write in. (And forward it to others who you think would be interested in contributing by using the gift link in the article’s share tools.) I hope to feature some of your responses in a future newsletter.

Fifty-two percent of college grads are underemployed a year after graduation, meaning they are working in jobs that don’t require the degrees they earned, according to a February report by the Burning Glass Institute, which analyzes the job market, and the Strada Institute for the Future of Work.

Five years out from school, about 88 percent of those who are underemployed are “severely” underemployed, the report said. These are the top five jobs they’re doing: information and record clerk, supervisor of sales, retail sales worker, sales representative in services, and secretary and administrative assistant.

“Even a decade after graduation, 45 percent of graduates are underemployed,” the report said.

The best way to avoid underemployment is to pick a major that employers want and to complete an internship, Burning Glass found. If you didn’t do those things and you’re a few weeks from commencement without a job lined up … um, potentially not good.

I dug a little deeper into this rather depressing report by interviewing the president of the Burning Glass Institute, Matt Sigelman, along with other labor market experts.

The first thing I asked Sigelman is whether the United States is generating too many college graduates, oversupplying the market and setting up a lot of graduates for disappointment.

“In the immediate term, it’s hard to conclude otherwise,” he said. He added that the supply-demand imbalance has gotten worse in the past four years because the strongest growth has been in jobs that have lower educational qualifications.

In the longer term, Sigelman said, “I do believe that America benefits from having a highly educated work force.” He added: “Demand for talent is not fixed. The center of gravity of our economy is increasingly in the knowledge economy. Jobs follow talent.”

That makes sense. Over time, employers should seize the opportunity to profit by reconfiguring jobs to make full use of the talent that’s currently being underused. They’ve been finding ways to put brains to work since the start of the Industrial Revolution, a time when even a high school diploma was rare and special.

In the here and now, you’re in pretty good shape if you studied computer science, engineering, mathematics or math-intensive business fields such as finance and accounting, according to Burning Glass’s research. Education and health majors are also sought after.

Not so in demand: graduates in public safety and security, recreation and wellness studies and general business fields such as marketing.

Employers are desperate to hire accounting majors, Michael Steinitz, the senior executive director of professional talent solutions at Robert Half International, a human resources consulting firm, told me.

New college grads in general are attractive to employers because they tend to be tech savvy, they cost less and they can be trained for whatever needs employers have, Steinitz said.

Underemployment of college grads is not a new problem. If anything, grads’ prospects are better than usual because of the low overall unemployment rate (3.8 percent in March). In an informal survey by the National Association of Colleges and Employers, 83 percent of employers expected to increase or maintain the rate of hiring of new grads this spring, roughly the same as last year but down from 2022, when employers were hiring aggressively coming out of the pandemic.

I want to come back to the paradox that pay for college grads is relatively high even though they appear to be in surplus. I think the biggest reason is that the average numbers for college grads are pulled up a lot by those who make it big.

There are some blue-collar jobs, such as truck driver and plumber, that pay well but have a flat lifetime earnings profile — that is, a 55-year-old truck driver doesn’t make a lot more than a 25-year-old one. In contrast, white-collar jobs that require college degrees tend to have more growth potential in know-how and thus in earnings.

“College acts as a gateway to professional occupations, which offer more opportunity for wage growth through on-the-job learning,” David Deming, an economist at Harvard’s Kennedy School, writes in the abstract of a new working paper.

The classes of ’25, ’26 and beyond could have it rougher because artificial intelligence could come to perform some of the functions of new hires, knocking out the lowest rungs on the career ladder.

The (partial) solution is to develop a mix of skills that’s hard for A.I. to duplicate. The most successful grads have a combination of technical skills and what might be broadly called people skills, including the ability to communicate in print and in person, motivate and work in teams. Examples from Sigelman: data scientists who are good at writing and humanities majors in marketing who learn structured query language.

“If you were to design universities from scratch” with employers’ needs in mind, Deming told me, they would focus a lot more on teaching teamwork and the broad range of skills that are needed in the workplace.

Such ideas are of little use to today’s jobless seniors, of course. Then again, there will be many opportunities to overcome a poor start. Deming is guardedly optimistic, despite Burning Glass’s warnings. Life is long. He did a quick calculation for me, based on the National Longitudinal Survey of Youth, that about 60 percent of the college grads who start in a non-college-level job find their way into a managerial or professional occupation eventually.

“It’s definitely better to get a good first job than not to get a good first job,” Deming said. But “the jury is out on this idea that if you don’t get a good job right out of college, all is lost.”

Outlook: Consumers Are Hurting

“The savings rate is falling, and interest paid on mounting debt is spiraling higher, suggesting consumers may be nearing the breaking point,” Dana Peterson, the chief economist of the Conference Board, a business-supported research group, wrote on Friday. She added, “Our call for slower real G.D.P. growth over the second and third quarters still makes sense.” Higher-than-expected inflation has made interest rate cuts by the Federal Reserve to buoy the economy less likely, Peterson wrote.

Quote of the Day

“Complex adaptive systems have the property that if you run them — by just letting the mathematical variable of ‘time’ go forward — they’ll naturally progress from chaotic, disorganized, undifferentiated, independent states to organized, highly differentiated and highly interdependent states.”

— J. Doyne Farmer in “The Third Culture: Beyond the Scientific Revolution,” edited by John Brockman (1995)