Archive for ‘jobs after college’

October 28, 2014

Millenials expect to rely on work income during retirement

by Grace

Personal savings and income from work will become increasingly important to future retirees.

Working in retirement is likely to become even more commonplace as Generation Xers and Millennials eventually head toward their retirement years. While many of today’s retirees say they can count on Social Security and employer pensions to fund most of their retirement, future generations are far more likely to say they will need to rely primarily on personal savings and income from working during retirement (FIG 8).

EXPECTED SOURCES OF RETIREMENT INCOME

20141026.COCRetirementIncomeSources3

CLICK ON IMAGE FOR DETAILS.

 

Although I was initially surprised that 12% of Gen Xers and Millenials still expect pensions to fund their retirement, I realized these might represent the views of government employees, one of the few groups still covered by traditional pension plans.

And those who expect personal savings to cover retirement expenses need to start saving more.  The latest alarming news on this topic is that “middle-class people in the USA have a median of $20,000 saved for retirement, far short of the $250,000 they think they’ll need during that time of their lives”.

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Work in Retirement: Myths and Motivations, Merrill Lynch with Age Wave, June 2014.

October 27, 2014

Houston, Nashville, and Denver are hot cities for young college graduates

by Grace

Where are young college graduates choosing to live?  And as they age, will they flee to the suburbs as earlier generations have done?

When young college graduates decide where to move, they are not just looking at the usual suspects, like New York, Washington and San Francisco. Other cities are increasing their share of these valuable residents at an even higher rate and have reached a high overall percentage, led by Denver, San Diego, Nashville, Salt Lake City and Portland, Ore., according to a report published Monday by City Observatory, a new think tank.

And as young people continue to spurn the suburbs for urban living, more of them are moving to the very heart of cities — even in economically troubled places like Buffalo and Cleveland. The number of college-educated people age 25 to 34 living within three miles of city centers has surged, up 37 percent since 2000, even as the total population of these neighborhoods has slightly shrunk.

20141022.COCYoungCollegeGraduatesMoving2

 

These trends bode well for the top cities.

“There is a very strong track record of places that attract talent becoming places of long-term success,” said Edward Glaeser, an economist at Harvard and author of “Triumph of the City.” “The most successful economic development policy is to attract and retain smart people and then get out of their way.”

The economic effects reach beyond the work the young people do, according to Enrico Moretti, an economist at the University of California, Berkeley, and author of “The New Geography of Jobs.” For every college graduate who takes a job in an innovation industry, he found, five additional jobs are eventually created in that city, such as for waiters, carpenters, doctors, architects and teachers.

“It’s a type of growth that feeds on itself — the more young workers you have, the more companies are interested in locating their operations in that area and the more young people are going to move there,” he said.

Will millenials flee to suburbia as they start to have families?

How many eventually desert the city centers as they age remains to be seen, but demographers predict that many will stay. They say that could not only bolster city economies, but also lead to decreases in crime and improvements in public schools. If the trends continue, places like Pittsburgh and Buffalo could develop a new reputation — as role models for resurgence.

Not so fast.  According to New Geography, “the first group of millennials who are now entering their 30s … are beginning, like preceding generations, to move to the suburbs”.

Here’s how the geography of aging works. People are most likely to move to the core cities in their early 20s, but this migration peters out as people enter the end of that often tumultuous decade. By their 30s, they move increasingly to the suburbs, as well as outside the major metropolitan areas (the 52 metropolitan areas with a population over 1,000,000 in 2010).

This pattern breaks with the conventional wisdom but dovetails with research conducted by Frank Magid and Associates that finds that millennials prefer suburbs long-term as “their ideal place to live” by a margin of 2 to 1 over cities.

Based on past patterns, by the time people enter their 50s, the entire gain to the core cities that builds up in the 20s all but dissipates, as more people move to suburbs and to outside the largest metropolitan areas.

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Claire Cain Miller, “Where Young College Graduates Are Choosing to Live”, New York Times, October 20, 2014.

Joel Kotkin, “The Geography of Aging: Why Millenials are Headed to the Suburbs”, NewGeography.com, December 9, 2013.

October 24, 2014

Trying to teach the enigmatic and increasingly popular skill of critical thinking

by Grace

The mysterious skill of “critical thinking” — schools try to teach it and employers seek workers who have it.  But the definition is  hard to pin down.

Here are some definitions of critical thinking:

  • “The ability to cross-examine evidence and logical argument. To sift through all the noise.”
    -Richard Arum, New York University sociology professor
  • “Thinking about your thinking, while you’re thinking, in order to improve your thinking.”
    -Linda Elder, educational psychologist; president, Foundation for Critical Thinking
  • “Do they make use of information that’s available in their journey to arrive at a conclusion or decision? How do they make use of that?”
    -Michael Desmarais, global head of recruiting, Goldman Sachs Group

I like the first definition the best, but of course employers define it any way that makes sense for their workplace.

In any case, it has become an increasingly sought-after skill.

Mentions of critical thinking in job postings have doubled since 2009, according to an analysis by career-search site Indeed.com. The site, which combs job ads from several sources, found last week that more than 21,000 health-care and 6,700 management postings contained some reference to the skill.

A concrete example of what critical thinking means in the workplace comes from NYU music business graduate Brittany Holloway.

Ms. Holloway, who now works as a content-review and fraud specialist at Brooklyn-based digital-music distributor TuneCore, defines the skill as “forming your own opinion from a variety of different sources.”

Ms. Holloway, 21 years old, says her current job requires her to think critically when screening music releases before they’re sent to digital stores like Apple Inc.’s iTunes.

Critical thinking and problem solving skills are related, and employers report they are having difficulty finding college graduates that measure up in those areas.  Colleges, having “institutionally supported and encouraged [a] retreat from academic standards and rigor”, are regularly chastised for failing to teach those skills.

A broad base of knowledge is needed before we can become critical thinkers.

… Dan Willingham, a professor of psychology at the University of Virginia, is a leading expert on how students learn. “Data from the last thirty years leads to a conclusion that is not scientifically challengeable: thinking well requires knowing facts, and that’s true not only because you need something to think about,” Willingham has written. “The very processes that teachers care about most — critical thinking processes such as reasoning and problem solving — are intimately intertwined with factual knowledge that is stored in long-term memory (not just found in the environment).”

Will Common Core Standards help develop critical thinking skills?

Part of the problem is a decline in content-based instruction that affects students from kindergarten to college.  Common Core Standards, with their emphasis on non-fiction reading and evidence-based writing, may remedy that.  But that is still to be determined, partly due to the ongoing implementation problems of CCS.

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Melissa Korn, “Bosses Seek ‘Critical Thinking,’ but What Is That?”, Wall Street Journal, Oct. 21, 2014.

October 20, 2014

You probably need a college degree to get hired as a secretary.

by Grace

Only college graduates need apply for secretarial jobs.

More than half of employers now require a college credential for all jobs, and nearly one-third now hire college graduates for jobs that previously went to high-school graduates, according to a 2013 CareerBuilder survey of 2,600 hiring managers. Labor-market analytics firm Burning Glass Technologies recently found that 65% of postings for executive secretaries and assistants call for bachelor’s degrees, but just 19% of current secretaries have such credentials.

I recently heard about a long-time secretary who had been laid off and could not find another job because she did not have a college degree.

But a degree doesn’t necessarily make a candidate more qualified, it’s often just a way to screen applicants.

Few hiring managers say that college graduates are more qualified than nongrads for jobs in retail and warehouses, but as long as the job market is tight, employers say they can afford to be picky.

No wonder “parents push their kids to go to college”.

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Melissa Korn, “A Bit of College Can Be Worse Than None at All”, Wall Street Journal, Oct. 13, 2014.

October 15, 2014

Before starting college, consider your chances of actually getting a degree

by Grace

20141013.COCNotGraduatingCollege1

 

A dual penalty for dropping out of college

Those students may find themselves doubly damned: cut out of consideration for professional-track jobs, and starting their careers years behind their peers who entered the workforce with just high-school diplomas. Many have student loans to boot.

October 14, 2014

It looks like ‘the demand for lawyers will keep shrinking’

by Grace

The surplus of lawyers looking for jobs has been apparent for several years now, “and the number of jobs is apt to shrink further as technology sinks its teeth into legal work”.

In his recent City Journal article Machines v. Lawyers, Northwestern Law School professor John O. McGinnis explained why the demand for lawyers will keep shrinking. “Law is, in effect, an information technology – a code that regulates social life. And as the machinery of information technology grows exponentially in power, the legal profession faces a great disruption not unlike that already experienced by journalism, which has seen employment drop by about a third….”

Throughout the 60s, 70s, and 80s, law was a growth industry and a great many people (especially students who had taken “soft” majors in college) figured that earning a JD was an attractive option. Naturally, law schools expanded to accommodate the throngs of degree seekers, who were aided by federal student loan programs. Going to law school both delayed the need to start repaying undergraduate loans and appeared to be the pathway into a bright and lucrative career.

That’s not true anymore.

McGinnis gives details on how technology is disrupting the legal profession.

Discovering information, finding precedents, drafting documents and briefs, and predicting the outcomes of lawsuits—these tasks encompass the bulk of legal practice. The rise of machine intelligence will therefore disrupt and transform the legal profession.

Fewer lawyers will be needed, but superstar lawyers will prosper.

A relatively small number of very talented lawyers will benefit from the coming changes. These superstars will prosper by using the new technology to extend their reach and influence. For instance, the best lawyers will need fewer associates; they can use computers to enhance the value that they offer their clients. Already, the ratio of associates to partners in big law firms appears to be declining. In complex cases, lawyers will continue to add value to machine intelligence through uniquely human judgment. Even now, when computers regularly beat the best chess grandmaster, a good chess player and a good computer combined can often beat the best computers. Thus, for important cases and transactions, good lawyers will still add substantial value, even if computers do more of the work.

As McGinnis noted, journalism is another profession severely impacted by technology, possibly pointing to a future where computers will be handling many of today’s white-collar jobs.

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George Leef, “The Canary in the Law School Coal Mine?”, Minding The Campus, October 9, 2014.

John, O. McGinnis, “Machines v. Lawyers”, City Journal, Spring 2014.

October 8, 2014

The problem of student loans that don’t deliver on jobs

by Grace

Kevin Carey in the New York Times writes about how vocational training programs over-promise and under-deliver on their promise to train students for well-paying jobs.  He highlights the problems with medical assistant training programs.

Many people who graduate from such programs struggle to find work. Those who do find work often make little money — too little to repay their debts from the program. Despite the happy poster images, the market for medical-assistant education is actually an allegory for the problems in the parts of higher education that tend to attract low-income and middle-class students: little regulation and uneven — often mediocre — results. The same problems afflict many community colleges, lower-tier four-year colleges and training programs in fields like office management and culinary arts.

According to the Department of Labor, the median annual salary for medical assistants in 2011 was $29,100. Yet most recent graduates of medical-assistant training programs earn much less, which suggests the programs are not reliable routes to good jobs as assistants. Among the 100,000 students who earned a medical-assistant certificate in 2008 or 2009, roughly 94 percent attended a program where graduates typically earned less than $20,000 in 2011, the data show. More than 50 percent attended a program where typical graduates earned less than someone working full time at the federal minimum wage would — $15,080. That can only mean many were not working full-time in any job.

Clearly the return on investment is painfully insufficient for many trained medical assistants, as well as for many other graduates of our faltering higher education system.  Carey attributes the problem to false advertising, noting that “it’s nearly impossible to find an employer who explicitly requires a certificate”.  He calls for increased regulation as the solution.

The medical-assistant education market is inefficient because the American higher education system is largely unregulated. Every year, the federal government gives students $150 billion in grants and subsidized loans to attend any program offered by any accredited college. The assumption is that the free market will take care of the rest. But college is what economists call an “experiential good” — something you can’t entirely understand until after you purchase and experience it, at which point it may be too late.

Inadequate loan underwriting creates “distortions and useless degrees”.

I actually agree with Carey’s general point that new regulations are needed to curb abuses arising from the haphazard distribution of billions of dollars of taxpayer funds with very little accountability.  But my take on the problem is closer to how this highly-ranked comment frames the problem, with a need for the federal government to do a better underwriting loans.

It is amazing how this article and most others on the the subject never mention the elephant in the room.

It is the Federal Government’s policy to dump money, in the form of grants or loans and loan guarantees, for virtually any degree, any college, to anyone, that creates these distortions and useless degrees.

Do you think any private bank without the Federal Student Loan guarantees and laws would ever lend $18K in unsecured loans to 18 year olds with no assets and no income attending these programs?

Do you think many parents or family would be writing actual checks of $18K for people to attend without making sure they lead to actual jobs?

Of course not. The Federal Government policies inflate the cost of higher education and preserves the existence of thousands of non-viable programs of higher education.

Until we address that, these distorted results will continue to be with us.

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Kevin Carey, “When Higher Education Doesn’t Deliver on Its Promise”, New York Times, Oct. 4, 2014.

September 26, 2014

Women place greater importance on steady employment when seeking a spouse

by Grace

Almost twice as many women as men consider it “very important” that their future spouse have a “steady job”.

… Never-married women place a great deal of importance on finding someone who has a steady job—fully 78% say this would be very important to them in choosing a spouse or partner. For never-married men, someone who shares their ideas about raising children is more important in choosing a spouse than someone who has a steady job.

20140924.COCGenderDifferencesMarriageMate1

Could it be that women still think they’d like to stop working when they have children?  Yes.  One recent survey found that 84% of working women want to stay home to raise their children.

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Wendy Wang and Kim Parker, “Record Share of Americans Have Never Married”, Pew Social Trends, September 24, 2014.

September 24, 2014

Negative consequences of believing the STEM shortage myth

by Grace

In his book Falling Behind: Boom, Bust & the Global Race for Scientific Talent, author Michael Teitelbaum challenges the commonly held belief that the United States suffers from a shortage of STEM workers.

The truth is that there is little credible evidence of the claimed widespread shortages in the U.S. science and engineering workforce….

A compelling body of research is now available, from many leading academic researchers and from respected research organizations such as the National Bureau of Economic Research, the RAND Corporation, and the Urban Institute. No one has been able to find any evidence indicating current widespread labor market shortages or hiring difficulties in science and engineering occupations that require bachelors degrees or higher, although some are forecasting high growth in occupations that require post-high school training but not a bachelors degree. All have concluded that U.S. higher education produces far more science and engineering graduates annually than there are S&E job openings—the only disagreement is whether it is 100 percent or 200 percent more. Were there to be a genuine shortage at present, there would be evidence of employers raising wage offers to attract the scientists and engineers they want. But the evidence points in the other direction: Most studies report that real wages in many—but not all—science and engineering occupations have been flat or slow-growing, and unemployment as high or higher than in many comparably-skilled occupations.

Although some STEM fields are booming and employers find it difficult to fill professional positions, by no means is that true across the board.

Teitelbaum lists five episodes of STEM ‘“alarm/boom/bust” cycles since World War II’ where in all cases government policies intended to address false claims of shortages only exacerbated the problem.

… Each lasted about 10 to 15 years, and was initiated by alarms of “shortages,” followed by policies to increase the supply of scientists and engineers. Unfortunately most were followed by painful busts—mass layoffs, hiring freezes, and funding cuts that inflicted severe damage to careers of both mature professionals and the booming numbers of emerging graduates, while also discouraging new entrants to these fields.

The current administration has fallen into the same trap, pushing for more STEM graduates who may actually find jobs in short supply.  This year New York began allocating taxpayer funds to encourage college students to pursue STEM majors.

Ignoring “science-based evidence” produces “large unintended costs”.

Ironically the vigorous claims of shortages concern occupations in science and engineering, yet manage to ignore or reject most of the science-based evidence on the subject. The repeated past cycles of “alarm/boom/bust” have misallocated public and private resources by periodically expanding higher education in science and engineering beyond levels for which there were attractive career opportunities. In so doing they produced large unintended costs for those talented students who devoted many years of advanced education to prepare for careers that turned out to be unattractive by the time they graduated, or who later experienced massive layoffs in mid-career with few prospects to be rehired.

George Leef is another critic of these government interventions.

… Strong business and educational groups lobby for nice-sounding policies that benefit themselves, frequently employing dubious arguments and misleading claims. The costs of the resulting pro-STEM policies are dispersed among the public, and fall particularly hard on the unfortunate individuals who invest a lot of money and years of their lives in pursuit of credentials that are apt to become almost worthless.

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Michael S. Teitelbaum, “The Myth of the Science and Engineering Shortage”, The Atlantic, March 19 2014.

George Leef, “True Or False: America Desperately Needs More STEM Workers”, Forbes, June 6, 2014.

September 10, 2014

The jobless recovery in one chart

by Grace

An illustration of our jobless recovery from economics professor Mark J. Perry

20140909.COCJoblessRecoveryChart1

 

Bottom Line: The US has been producing new record-high levels of GDP in almost every quarter since Q3 2011, and we are now producing 7.65% (and $1.14 trillion) more real GDP today than in late 2007. But we are producing that record-setting level of real output with a quarter-million fewer workers than in 2007. One explanation for America’s record-high output with 227,000 fewer workers is that the Great Recession facilitated what might be one of the greatest expansions of worker productivity in US history. The fact that we’ve been able to greatly expand national output with fewer inputs (workers) represents a huge increase in economic efficiency, but has also left us with a lingering “jobless recovery” and an economy that is struggling to create new, post-recession employment opportunities for millions of Americans.

Labor force participation remains low.

Perry explains that he is using the “more comprehensive measure of total civilian employment” instead of the total payroll number, which recently climbed up to pre-recession levels  However, his bigger point is supported by the troubling increase in the working age population during that time.

As good as that might sound, surpassing the previous high-water mark in terms of payroll employment is cold comfort for recent graduates and other new entrants into the work force, as well as for the legions of Americans who lost their jobs in the Great Recession. While payrolls may be back to where they were before the downturn, the working age population has risen by roughly 15 million over the same period.

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Mark J. Perry, “The current state of the US economy in one chart”, Carpe Diem, September 5, 2014.

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