2009 January 08 Thursday
College Grad Unemployment Numbers Understated

On the surface this sounds like the job prospects for the college educated are pretty good even during a recession.

In November, the unemployment rate among workers with a college degree or higher reached 3.1 percent. While that figure is modest compared with the national unemployment rate of 6.7 percent -- and nowhere near the 10.5 percent unemployment rate among those without a high school diploma -- it hasn't been that high since 2003. Because the unemployment rate tends to lag behind other economic indicators, analysts think unemployment among college-educated workers is likely to surpass 4 percent, which would be the highest rate since the Bureau of Labor Statistics began tracking unemployment by education level in 1970.

But most of the college grads who are losing their jobs aren't showing up among the officially unemployed.

Last month, the number of college graduates working fell by 282,000, but the number of college graduates counted as unemployed rose by only 2,000 to 1.413 million.

Do smarter people give up job searching more quickly because they figure out more quickly how hopeless it is? Or are they more specialized and therefore have fewer choices to choose among? Or do they have more cash saved up on average and therefore are less desperate and don't want to work at lower paying and in other ways less desirable jobs? Or do they see lower paid and lower skilled jobs as bad marks they want to keep off their resumes?

Share |      By Randall Parker at 2009 January 08 09:20 PM  Economics Labor


Comments
Jerry Martinson said at January 8, 2009 9:45 PM:

I know that a lot of college grads that become unemployed do happen to have some money saved up or tend to rely on the spouse's income and become a housewife/househusband while the market is bad. Also many start to go through the process of applying for graduate school, etc... and won't list themselves as unemployed. So yes, they do give up earlier.

averros said at January 9, 2009 1:53 AM:

Are those unemployed grads studied aboriginal literature, photography, and business, ehm, administration?

There's a lot of useless "education" going on in the colleges. Meanwhile, it's close to impossible to hire a decent software guy.

Dragon Horse said at January 9, 2009 6:00 AM:

They are often more specialize, but if you are specialized in a field that has low competition that is fine. Most computer related work is fine, even low end support jobs are common. Fields like Law (on the low end) result in constant temping...fields like Medicine and even nursing are in high demand right now. It really depends on the industry. If you are a grad coming out of school with a liberal arts BA degree and no other job experience, good luck with that. Life is going to suck for you for awhile.

Jerry Martinson said at January 9, 2009 9:23 AM:

With a recession this deep and long, there's going to be a crunch for medicine too. It's true that people will still get sick but they won't be able to pay the bills and premiums. Eventually the insurance companies, hospitals, etc... have to face economic reality because this recession is going to wring out the financial buffers that in the past made them "shallow" recession-proof. The only exception is nursing which has a structural problem because few went into the field when nursing was falsely regarded as not very important to patient outcomes 20 years ago. We're still playing catch-up from that mistake.

Recessions have affected college grads with solid degrees in the past. Perhaps college grads have a greater ability also to end up under-employed rather than un-employed. In 1992, 1993 there were an awful lot of new college grads with solid degrees in engineering that ended up working at Radio Shack. I know one in 1993 that ended up working in a shopping mall selling clothes for a year. 2009 will probably be the worst college hire season ever and it will take years for the slack to get picked up. Generally nearly all companies just can't hire new people no matter how "good" they are because they have to get rid of 25% of their workforce in the next few months. At this point right now, for every job in tech that gets created about 20 are getting cut - and tech is supposedly one of the stronger sectors in the downturn.

Randall Parker said at January 9, 2009 8:22 PM:

averros,

It is pretty easy to hire great software guys. You just have to be willing to pay a lot of money. The best developers I know all make over $100k and some make $150k and higher.

anon_10_Jan said at January 10, 2009 7:12 AM:

to: averros at 1:53

Please give me (a break and) any kind of proof that it is "close to impossible to hire a decent software guy"!

There are numerous mid-career programmers and IT specialists available but only at reasonable pay rates.

Do not be tricked by greedy business interests who proliferate bogus studies cooked up to justify H1B and other employment related visas.

If then philosopher Averroes is your model, remember he believed in two ways to truth but only one truth.

Suzanne LaFranzo said at January 10, 2009 1:26 PM:

I'm a recent college grad... Graduated in 3.5 years with over a 3.0 from Bradley University in Peoria, IL with my B.S in Human Resource Management and it as been near impossible to find a decent paying job ($30,000+) in my field. I'm 100% geographically flexible and have over 2 years of direct HR experience. I'm very fortunate to have parents that are able to support me in this hard time. This economy sucks!

averros said at January 11, 2009 1:53 AM:

Randall - we have different definitions of "great", I'm afraid. To me a great programmer is someone who can write things like kernels, compilers, databases and other programs comparable in complexity, not just being able to kludge together 100-line scripts. In my age I still can run circles around anybody I can hire for any money - to the point that it often takes less time to do something myself than to explain how it should be done. And, yes, it's $150k or higher.

Most software "engineers" I see are just bloody amateurs. Most of them have hard time understanding such simple concepts as the need to put comments in the code they write, and very very few can write clean and tight code.

> Do not be tricked by greedy business interests who proliferate bogus studies cooked up to
> justify H1B and other employment related visas.

I both was on H-1B visa and hired people on H-1B because I couldn't find qualified applicants locally. I currently work for a large and successful company rather than a startup, and, well, the software developers are mostly Indians with top ones being predominantly Russian or European, plus very few Americans.

I guess this is the result of the decades of dominance of socialists (aka "liberals") in the public education - teaching children to feel good about themselves instead of teaching them to think.

averros said at January 11, 2009 1:53 AM:

Randall - we have different definitions of "great", I'm afraid. In my age I still can run circles around anybody I can hire for any money - to the point that it often takes less time to do something myself than to explain how it should be done. And, yes, it's $150k or higher.

Most software "engineers" I see are just bloody amateurs. Most of them have hard time understanding such simple concepts as the need to put comments in the code they write.

> Do not be tricked by greedy business interests who proliferate bogus studies cooked up to
> justify H1B and other employment related visas.

I both was on H-1B visa and hired people on H-1B because I couldn't find qualified applicants locally. I currently work for a large and successful company rather than a startup, and, well, the software developers are mostly Indians with top ones being predominantly Russian plus very few Americans.

I guess this is the result of the decades of dominance of socialists (aka "liberals") in the public education - teaching children to feel good about themselves instead of teaching them to think.

Jerry Martinson said at January 11, 2009 1:06 PM:

I have a belief that it is very difficult to get the best employees during boom times but far easier to get them during recessions. I could say I'm voting with my wallet big time on this belief. I think it is better to start companies just a recession is in full because for the next 2 years you'll be able to hire the best since they don't have anywhere else to go. After that, then you're up the creek getting quality people again.

Randall Parker said at January 12, 2009 11:13 PM:

averros,

You have no idea what I judge as great programmers. But your reference to people who can write 100 line scripts shows a recurring theme with you: Your working assumption that you are always dealing with people who know less than you causes you to ignore arguments from people even when their knowledge and understanding exceeds yours on some subjects.

People who you can hire for money: It is necessary to have a good network to be able to find out who is great. With such a great network one can certainly hire great programmers for less than $200k. If you can't hire people as good as you then you suck at networking.

averros said at January 19, 2009 11:05 PM:

> If you can't hire people as good as you then you suck at networking.

Really. After 25 years in the industry, and a decade at positions starting from the "Chief" word.

I know how to listen to people who have something useful to say. Most just don't. The people who know shit are very very rare.

And, no, you don't normally need a network to find out how good a software guy is. Usually, a look at someone's code is more than enough - junky code is a very good indicator of disorganized and inefficient mind. Sure, you can get great programmers for less than $200k - if you can offer them something to make their life interesting (heck, I worked for free on stuff which was new and interesting to me). Unfortunately, most real-life software projects are horrible drudgery, especially if you happen to work for a company with mature products.

Randall Parker said at January 19, 2009 11:32 PM:

So you've managed to become "chief" at things without being able to find great developers. I can introduce you to directors of engineering who have similar deficiencies. Yet I know people who are as good as these people need to hire. The problem is that these directors work in corps with stupid personnel policies with limits on what they can offer in salaries and restrictions on how much they can lay off less talented people to hire more talented people. My guess is you work under similar constraints. Don't you work for IBM?

I recently had a conversation with a guy in charge of H.R. for a big corp division about this sort of thing. He can't make the company flexible enough on hiring and compensation to get the really talented people. This is a common problem in big corps.

russian bear said at January 22, 2009 1:21 AM:

>I currently work for a large and successful company rather than a startup, and, well, the software developers are mostly Indians with top ones being predominantly Russian plus very few Americans.

>I guess this is the result of the decades of dominance of socialists (aka "liberals") in the public education - teaching children to feel good about themselves instead of teaching them to think.
=====
Russia and India have more of a history of socialism than the US. That liberals are dominant in public education is a myth. I went to a public high school and a well-regarded public university in the US and I'd say the instructors were unbiased. Most educators are middle of the road and do a good job at checking their bias at the door.

I think the problem is the culture and not enough information about math and career choices in the early years. If you say to people bluntly, 'major in engineering because it's the only useful major or else you'll be unemployed when you graduate,' it'll make young people take notice. Young people are entering college without a realistic idea of what the job market is like. Also, many people who could be good get weeded out in the university process. Sitting in a 400 seat lecture with a thick-accented foreign person giving instruction can be demotivating. Having TAs and tutors who are foreign and hard to understand can be demotivating. Giving an effort that would get you an A or B in other schools (like smaller private schools or community colleges) but you only get a C because the 400 person class is competitive and is graded on a curve can be demotivating. And so a person in these beginning science classes might think their grades are poor and that they should change their major to English without having a solid post college plan.

Young people may have inaccurate perceptions of the job market. I'm sure a lot somewhat wrongfully think 'why study science and math when you can study finance and get a high paying corporate job that pays a whole bunch of money when you graduate?' Well, unless you go to one of the fancy schools, your undergrad finance degree might not mean much to employers. If you get into the HYP Ivies, you can major in French literature and still have a pretty decent pick at business jobs (well, in the better economy of yesteryear). Even though the reality may be that the business major or any decently smart person from podunkville university may be able to do as good a job as the HYP person. They are less 'talented' because they didn't go to the fancy expensive school.

The same idea is there with law school. Sure it's $100k worth of debt but you'll get a $100k job when you graduate (which is not true for most).

The universities and career departments really need to make it clear from the start that if people major in liberal arts, aren't planning on teaching, aren't planning on graduate or professional school, and don't want to pick up a double major in accounting, nursing, or engineering that they need to get a lot of useful work experience during college or they will likely end up in a bad position after graduation. They need to make it clear that businesses don't train people any more; that internships are the new entry level and that it's harder to get decent jobs with any degree like the previous generations could.

I'm sure there are people who change their plans or majors and get stuck. What if you were a premed liberal arts major with not a lot of work experience and then decide that medical school isn't for you? You're sort of in no man's land then and now you need to figure out what you want to do.

david said at March 14, 2009 2:35 PM:

All you college pukes who voted for Obama, I hope you're happy. The econonmy went from bad to worse thanks to Obama. So if you're unemployeed, and you voted for Obama, lesson learned.

this economy sucks said at July 23, 2009 8:09 AM:

David, I completely agree with your statement. Now the people who worked hard to get through college are suffering. I just graduated from Emerson College with a degree in Marketing, and still no jobs. I hope all the Obama lovers are happy now!

Optimist said at June 6, 2010 12:03 PM:

According the the National Bureau of Economic Research (the official arbiter of recessions) the current recession began in December 2007.

This recession began at the end of the Bush administration, but the damages that led to an official declaration of a recession started much earlier. It took many years since 2000 to completely sabotage a global economic superpower. Bill Clinton, a democrat, had our deficit balanced before George Jr. got his turn at the helm and destroyed this great country. It is not Obama who allowed this to happen, he was voted into office after the recession was already rolling.

As for why you two are unsatisfied, it's obvious that your lack of connection to reality is a factor.


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