Archive for ‘jobs after college’

July 29, 2014

Wages for recent college grads are not keeping up

by Grace

Wages are rising, but not for young grads

A new analysis from the San Francisco Fed finds entry-level earnings for new college grads — defined as working graduates age 21 to 25 — grew only by 6 percent from April 2007 to April 2014. In comparison, median weekly earnings for all workers grew two-and-a-half times as fast, at 15 percent. And while recent grads tend to fall behind after any recession, the gap since the Great Recession has been both wide and long-lasting.

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Is this cyclical or structural?

There are differences of opinion about whether this stagnation is due to a short-term economic downturn or arises from a more fundamental problem, “like a mismatch between recent grads’ skills and open positions”.

One thing that seems clear is that as the percentage of the population with college degrees continues to increase,  there are “too many college graduates chasing too few college-level jobs”.

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Related:  “Technological advancements stunt job growth – ‘the great paradox of our era'”

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Danielle Kurtzleben, “Young college grads’ wage growth is falling farther and farther behind”, Vox, July 21, 2014.

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July 28, 2014

Right-tail gender disparity of SAT math scores

by Grace

Could this be one of the reasons women are underrepresented in engineering and computer science?

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2. Chart of the Day above illustrates graphically one of the reasons that women are under-represented in the more mathematically intensive STEM fields like engineering and computer science. In 2013, boys out-performed girls for perfect scores of 800 on the math SAT test by a male-female ratio of 1.88 to 1 (188 boys for every 100 girls), and for a near-perfect score of 790 by a ratio of exactly 2 to 1.

These facts make some people uncomfortable, as shown by the criticism Larry Summers received when he remarked on the right-tail disparity in men’s math scores.

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Mark J. Perry, “Monday afternoon linkage”, Carpe Diem, July 21, 2014.

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July 22, 2014

Ten career paths you may want to avoid

by Grace

A new study released Tuesday by job-search site CareerCast.com, lists the 10 top endangered jobs in the U.S. Using data on 200 jobs from the Bureau of Labor Statistics, CareerCast projected the least promising career paths in terms of future employment growth, income potential and existing unemployment in the job field.

  1. Mail carrier
  2. Farmer
  3. Meter reader
  4. Newspaper reporter
  5. Travel agent
  6. Lumberjack
  7. Flight Attendant
  8. Drill-Press Operator
  9. Printing Worker
  10. Tax Examiner and Collector

“The common theme in these jobs is paper,” says Tony Lee, publisher of CareerCast.

There is simply less demand for the type of work represented by these jobs, in most cases due to technological advances.

Since I have recently been spending many frustrating hours planning my summer vacation, I wish travel agents would make a comeback.  Apparently there is a trend toward a fee-for-service model among travel agents, particularly in the FIT (Flexible Independent Travel) market.  Maybe next time I’m planning a family vacation I’ll seek out a travel agent to make my life easier.

I’m particularly concerned to see that newspaper reporter jobs made this list since I have a son who is an aspiring journalist.  Perhaps the growing proliferation of online news sources will boost job growth in that area.  That may be optimistic thinking, but you can’t blame a mom for hoping.

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Kathleen Madigan, The 10 Most Endangered Jobs (Or, Why You Are Reading This Online), Wall Street Journal, July 15, 2014.

July 18, 2014

New York railroad workers will finally contribute to their health insurance

by Grace

At the last minute a strike by Long Island Rail Road workers was averted when they agreed to begin contributing to their health insurance and pensions.

Travelers on the Long Island Rail Road were spared a debilitating midsummer strike on Thursday, when the railroad and its unions reached an agreement three days before a planned walkout….

The unions received raises of 17 percent over six and a half years. But following a national trend in which workers shoulder an increasing share of their health costs, the railroad employees will, for the first time, contribute a portion of their pay, 2 percent, toward their health coverage.

The union had earlier rejected a proposal requiring “employees to contribute 2 percent of regular pay toward health care costs and pensions”.  This seemed out of touch with the reality of what most of their riders have to deal with.

In the private sector, the average percent of health premium paid by employees is 16% for individual coverage and 27% for family coverage. 

A talk show host who is usually on the side of unions had scornfully remarked that replacement workers could easily be found for these plum jobs that consisted mainly of “punching tickets”.

The New York Post wrote that the average LIRR worker makes $87,182 annually. Moreover, a third of the unionized workers make over $100,000. They get free health care and two pensions, but still, they want more.

Related:  “Quick Links – Public pension problems round-up” (Cost of College)

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Matt Flegenheimer, “L.I.R.R. Strike Is Averted After Cuomo Intervenes in Labor Talks”, New York Times, July 17, 2014.

Maria Vultaggio, “LIRR Strike 2014: Long Island Commuters And Conductors React To Possible Walkout”, International Business Times, July 14 2014.

July 17, 2014

Neurotics are seen as more valuable in the workplace

by Grace

This seems like another case where low expectations could work in your favor.  Sometimes it makes sense to demonstrate less confidence in the workplace.

Research suggests that the more anxious and withdrawn among us tend to gain respect over time at work, while more outwardly confident extroverts lose some of their initial esteem.

To some degree, the research shows the value of creating low expectations, said the study’s lead author, Corinne Bendersky, an associate professor at the Anderson School of Management of the University of California, Los Angeles.

“To the extent that people can channel their inner Woody Allen — and act more neurotic — they will lower peer expectations,” Dr. Bendersky said. The research defined neurotics as people who express anxiety, are withdrawn or appear emotionally volatile.

The research, published in April 2013 in the Academy of Management Journal, shows that, on the whole, neurotics are seen as working harder while some extroverts appear to their peers to coast; that is the case even if the neurotics and extroverts make similar work contributions.

I’ve seen this happen, although sometimes it seems to be because the extroverts are viewed as a bit obnoxious.

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Matt Richtelfeb, “That Neurotic on the Team? Give Him Time”, New York Times, February 1, 2014.

July 11, 2014

Parents help sustain their adult children’s extended financial adolescence

by Grace

Most parents are providing some financial support to their children even after they graduate from college, thereby promoting a period of sustained adolescence among 20-somethings.

… nearly 85% of parents plan to offer their children monetary aid after graduation, according to a survey Tuesday from Upromise by Sallie Mae. Almost one-in-three parents plan to provide their grad with financial assistance for up to six months, and around 50% plan to foot bills anywhere from six months to more than five years.

The new normal means that adult children continue to rely on mom and dad.

So, what has changed since my son graduated a few decades ago? Sure, new graduates are entering a much more difficult job market than he did, and even those who do secure jobs are unlikely to have the job stability he’s enjoyed. But a difficult job market is only part of the story. Social norms have shifted so that accepting help from Mom and Dad well into your 20s is “OK.”

Psychologists call this trend “emerging adulthood.” As Eileen Gallo and Jon Gallo note in their paper “How 18 Became 26: The Changing Concept of Adulthood,” for a certain socioeconomic set, growing up and moving out—permanently—means downgrading your lifestyle. The authors quote sociologists Allan Schnaiberg and Sheldon Goldenberg as stating:

“The supportive environment of a middle-class professional family makes movement toward independent adulthood relatively less attractive than maintenance of the [extended adolescence] status quo. Many of the social gains of adult roles can be achieved with higher benefits and generally lower costs by sharing parental resources rather than by moving out on one’s own!”

Keeping their 20-something children on the family cell phone plan is one common example of how “sharing parental resources” makes it easier on young adults as they transition to financial independence.  Another example is health insurance, where Obamacare now requires family policies to continue coverage for children up to age 26.  Individually these are small examples, but in total many parents are heavily subsidizing their adult children’s lifestyle.

Retirement expert Dennis Miller says parents should consider tough love instead of risking their own future financial security.

Retiring rich is hard enough without paying for your child’s extended adolescence. The job market may be tough for new graduates, but forcing your child to navigate it anyway might just be the best way to help.

Miller believes it’s possible to be supportive without hindering a young adult’s financial and emotional independence, and has some tips that can be read at the link above.

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Kathryn Buschman, “The New Normal? Some Parents Plan to Aid Children 5 Years after Graduation”, FOXBusiness, May 27, 2014.

Dennis Miller, Paying bills for adult children? Try tough love instead, MarketWatch, July 8, 2014.

July 9, 2014

Your weak relationships may be most important in finding a new job

by Grace

It’s often your distant acquaintances, not your close colleagues, who offer the best connections to new job opportunities.

Oftentimes we focus on building strong relationships with people, strong ties. After all, the better we know someone and the stronger the relationship is, the more valuable it is for us right? It’s a bit counter-intuitive but in the workplace it is not the strong ties that can be the most beneficial, in fact, weak ties (acquaintances or people that you might not know that well) can be far more valuable!

Weak ties give us access to information that we would normally not have.

In 1973 the sociologist Mark Granovetter published a paper titled “The Strength of Weak Ties” in which he talks about and explains the value of weak ties. Granovetter analogizes weak ties to being bridges which allow us to disseminate and get access to information that we might not otherwise have access to….

When two people have strong ties they typically know many of the same people and have access to the same information, which means there is strong overlap between the two. Strong ties at work are typically co-workers that sit next to us or perhaps work in the same department. This means that if you need access to someone or something outside of your department, that your strong ties generally don’t have access to things that you can’t get access to yourself.

However, when you have a weak tie with someone this acts as a bridge to an area where you most likely don’t have access to the same people and information that your weak tie does….

Both weak ties and strong ties are important.

The dilemma is that weak ties may not know your capabilities very well, so you also need to count on your strong ties to go to bat for you in job hunting situations.

Both networking and selling yourself are important.

Letting folks in your social network know that you’re looking for work is a good first step, but you should also work to sell them on the idea that you’d make a great employee. Don’t assume that contacts already know everything they need to about your professional life.

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Jacob Morgan, “Why Every Employee Should Be Building Weak Ties At Work”, Forbes, 3/11/2014.

Glassdoor, “Why (and How) Personal Connections Get You Hired”, The Savvy Intern, 1/3/2014.

July 7, 2014

Student debt and net worth

by Grace

College-educated young adults with student loans have a lower net worth than those who did not graduate from college.

Nearly four-in-ten U.S. households headed by an adult younger than 40 currently have student debt and a median net worth of just $8,700.

That’s a stark contrast to the median net worth of $64,700 that young college graduates without student debt have accumulated. Additionally, consumers without a degree and without student debt have a net worth of $10,900, once again greater than that of degree holders with debt.

While student loan debt does play a large role in the low median wealth of college graduates with student loan obligations, Pew found these consumers were more likely to take on other debts that contributed to the wealth gap.

College graduates are making more money.

… College-educated student debtors typically have a household income of $57,941, nearly twice that of homes in which the heads do not have bachelor’s degrees.

And their debt load is greater.

… Among the young and college educated, the typical total indebtedness (including mortgage debt, vehicle debt and credit cards, as well as student debt) of student debtor households ($137,010) is almost twice the overall debt load of similar households with no student debt ($73,250)….

It is reasonable that college-educated young adults, with their higher incomes, are able to take on more debt.

Though student debtor households tend to have larger total debt loads, indebtedness needs to be assessed in the context of the household’s economic resources. In other words, households with greater income and assets may be able to take on more debt. Using the conventional total debt-to-income ratio, where debt is measured as a share of income, college-educated student debtors are by far the most indebted.2 The median college-educated student debtor has total debt equal to about two years’ worth of household income (205%). By comparison, college-educated households without student debt and less educated households with student debt have total debts on the order of one year’s worth of household income (108% and 100%, respectively).

The hope and expectation are that their income will keep pace with inflation, and continue to grow at a rate that will enable them to manage their debt.

These young adults should also start saving for retirement, since the “power of compounding is a reason to start saving for retirement as early as possible”.

Saving “$5,000 per year only from ages 25 to 35 (10 years)” will generate a larger retirement nest egg than saving “$5,000 per year, but from ages 35 to 65 (30 years)”.

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Ashlee Kieler, “College-Educated Consumers With Student Debt Have Median Net Worth Of Just $8,700″, Consumerist, May 14, 2014.

Richard Fry, “Young Adults, Student Debt and Economic Well-Being”, Pew Research Center’s Social & Demographic Trends, May 14, 2014.

July 3, 2014

Advice for surviving, and even enjoying, your boomerang kid

by Grace

Many millennials are living at home with their parents.

Graduating with major student debt but without plans, as well as dropping out of college, unemployment, underemployment, poorly paid first jobs, sky-high rents and breakups or emotional upheavals can all create a perfect storm and send 20-somethings seeking shelter with mom and dad.

Thanks to closer parent/child relationships, smaller families, a later marriage age and the pressures of hard economic times, that’s a sharp shift since today’s boomer parents were launching their lives. Back then, one of the major milestones en route to adulthood was moving out of your parents’ home after high school.

Forbes offers five tips for surviving your 20-something child’s return to living at home.

  1. Encourage a plan.
  2. Treat grown-up kids as the young adults they’ve become.
  3. Let them know your expectations…before they move in.
  4. Have the money talk.
  5. Consider couple relationships — yours and theirs.

Are most adult kids who live at home paying rent to their parents?

… About half the boomerang kids who move home pay some sort of rent, and almost 90% help with household expenses, according to a 2012 Pew Report. But there are many ways to divvy up what it takes to run a household.

I have a boomerang kid at home, and two things I’ve found very helpful are making sure to treat him like an adult and finding agreement on a plan toward self-sufficiency.  I give some advice, but I also try to understand that he is in charge of his life.

Until a few years ago, I was resistant to the idea of a college graduate returning home to live.  But the high cost of living in my area along with the sorry state of the jobs market have softened my stance.  In fact, living at home is sometimes the better choice since it may be a way of getting a head start on saving for retirement.

Related:  “Parents have lower expectations for kids becoming financially independent” (Cost of College)

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Elizabeth Fishel and Jeffrey Arnett, 5 Steps To Survive Your Adult Child’s Return Home, Forbes, 6/26/2014.

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June 25, 2014

Some college majors offer ‘more shelter from economic storms than others’

by Grace

Picking the “right” college major shields graduates from some of the bad luck of graduating during a recession.

… Those who major in subjects that command higher salaries, like engineering and finance, increase their earnings advantage when they graduate into a recession. And those who major in subjects that lead to lower-paying jobs, like philosophy and music, are even more disadvantaged than in normal economic times.

A philosophy major takes a harder hit than a finance major during a recession.

Take finance majors. In normal economic times, they earn 24 percent more than the average college major when they are one year out of college. But in a recession, they earn 32 percent more than the average. At the other end of the earnings spectrum, religion and philosophy majors earn 42 percent less than the average major their first year out of college, and 55 percent less during a recession.

But the latest recession hit all graduates more than previous ones did.

In the Great Recession, though, the benefits to high-earning majors were muted, according to the most recent data collected by the Yale economists Lisa Kahn, Joseph Altonji and Jamin Speer. They were less sheltered because the recession affected the economy so broadly, Ms. Kahn said.

Should this news affect the selection of a college major?  Yes.

… yet another variable for students to keep in mind as they weigh which career to pursue.

Related:  “Recent college graduates suffering worst unemployment rates in 50 years” (Cost of College)

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Claire Cain Miller, “A College Major Matters Even More in a Recession”, New York Times, June 20, 2014.

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