Archive for ‘jobs after college’

May 27, 2015

Is a ‘Great Reset’ of our economy inevitable?

by Grace

Are we experiencing an end to the long-term trend of a rising standard of living in our country?  Are we due for a “Great Reset” of our economy, one that is inevitable due to the competing interests of workers and consumers?

Tyler Cowen warns “Don’t Be So Sure the Economy Will Return to Normal” and asks “what exactly are we experiencing?”

One relatively optimistic view is that observed deficiencies — like slow growth in real wages and the overall economy, persistently low interest rates and low levels of labor participation — are merely temporary. In this view, these problems will dwindle after manageable problems like high levels of public or household debt have been reduced.

Another commonly heard view is that we made the mistake of letting the last recession linger too long, allowing some of its features to became entrenched. That analysis suggests that if we correct past policy errors, whatever they may have been, an underlying normality will re-emerge.

There are some nuggets of truth in both of these arguments, but there is a much more disturbing possibility that could turn out to be more accurate: namely, that the recession was a learning experience that we haven’t fully absorbed. From this perspective, the radical and sudden changes of the financial crisis were early indicators of deep fragility and dysfunctionality.

Slowly but surely, we may be responding to these difficult revelations by scaling back our ambitions for the economy — reinforcing negative trends that were already underway. In this troubling view, we have finally begun to discover some unpleasant truths. Borrowing a phrase from the University of Toronto economist Richard Florida, it’s possible that we are experiencing a “Great Reset.”

A reset is hard for us to see because changes “seem to be gradual and slow”.  And new government policies meant to steer the economy “are no more than changes at the margin”.

Are millennials bearing the brunt of this reset?

Amid much talk about income inequality and an increasingly two-tier economy, it appears that a “heavy burden of adjustment in the overall labor market is being borne by the young”

… Wages for the typical graduate of a four-year college have dropped more than 7 percent since 2000, and the labor force participation rate of the young has been falling. One consequence is that young people are living at home longer and receiving more aid from their parents. They also seem to be less interested in buying their own homes.

Megan McArdle explains that we brought the “Great Reset” on ourselves, with our desire for rising, stable wages that conflicts with cheap services and goods.

The average American is at the heart of this story — as the victim and as the perpetrator. We suffer as employees because we exert influence as consumers.

Is a reset inevitable?

… The reset may not be fair. It will certainly not be easy. But it may be necessary.

———

Tyler Cowen, “Don’t Be So Sure the Economy Will Return to Normal”, New York Times, May 15, 2015.

Megan McArdle, “U.S. Workers Brought the ‘Great Reset’ on Themselves”, Bloomberg, May 19, 2015.

May 26, 2015

Has the underemployment rate topped out?

by Grace

Has the trend of rising underemployment rates for new college graduates finally turned a corner?

20150521.COCCollegeGradUnderemploymentChart1

While unemployment rates improved over the last few years, underemployment rates have only started to drop more recently.

The unemployment rate for recent college graduates began to fall in 2011, and it has continued to do so—with a hiatus during 2013—ever since. However, aside from a brief dip in early 2011, the underemployment rate continued to climb well into 2014, rising to a level of more than 46 percent. This divergence between falling unemployment and rising underemployment between mid-2011 and mid-2014 suggests that more college graduates were finding jobs during this time, just not necessarily good ones. The steady growth of non-college jobs, coupled with the relatively soft demand for college graduates during this three-year period, appears to have forced many recent college graduates to take jobs not commensurate with their education. More recently, though, the tide has turned. With the demand for college graduates rising at a solid clip since last summer, underemployment has also finally started to come down. Since last June, the underemployment rate for recent college graduates has fallen by about two percentage points, to 44.6 percent.

The underemployment rate is still historically high.

While these trends are no doubt good news for recent college graduates, it is important to keep the gains in perspective. As we have shown before in this post and this article, the underemployment rate for recent college graduates remains quite high by historical standards. At 44.6 percent, we estimate that nearly half of this group is working in jobs that typically do not require a college degree—a rate that is much higher than when underemployment hit a trough of around 38 percent in 2000. And while the demand for college graduates appears to be picking up, significant labor market slack remains, so continued strong growth in the demand for college graduates may well be necessary to make a more serious dent in the underemployment rate.

The Washington Post has an optimistic view.

Why the era of college grads working at restaurants and cafes is coming to an end

For now, I’ll wait and see.

———

Jaison R. Abel and Richard Deitz, “The Class of 2015 Might Have a Little Better Luck Finding a Good Job”, Liberty Street Economics, May 15, 2015.

May 25, 2015

Half of college graduates expect continued financial support from parents

by Grace

Parents of college grads have lower expectations for their adult children’s ability to support themselves.

… Some 36% of parents say they expected to support their children financially for more than two years, up from just 18% last year, and only 2.8% of parents expect their kids to have a full-time job after college and only one-quarter see them having any kind of job in their chosen field when they graduate….

Their kids are even more pessimistic.

About half of students expect to be supported financially by their parents for up to two years after graduation, according to a new survey of 500 students and 500 parents released Tuesday by Upromise, the savings division of Sallie Mae, the student lender….

Agreement about the “new normal”.

Both students and their parents are more accepting of the new normal, says Erin Condon, president of Upromise by Sallie Mae. “We were pleasantly surprised that parents and students were very aligned in their expectations,” she says. “One could argue that this generation is entitled or spoiled, but you could always argue that they are financially responsible and not biting off more than they can chew by making effort to get off on the right foot to make sure that long-term success is there.”

Related:  “Baby Boomers’ kids are doing worse than their parents”

———

Quentin Fottrell, “Half of college graduates expect to be supported by their families”, MarketWatch, May 19, 2015.

May 18, 2015

Millennials’ poor technology skills are hurting their employers

by Grace

Millennials’ lack of technological prowess is costing their employers big-time”.

Today’s young adults are establishing their careers, but their lack of technological prowess is costing their employers big-time. Yes, you read that right. In spite of growing up having the Internet in the palms of their hands, these so-called “digital natives” have a yawning knowledge gap that’s not apparent until they get into the office.

“Most Gen Ys grew up accustomed to using social media and texting for communicating and collaborating and haven’t had to use email or spreadsheets extensively,” explains Chris Pope, senior director of strategy at technology services company ServiceNow.

In terms of technology, they lack workplace skills but have mastered social skills.

And unfortunately for them, programs like Outlook and Excel are the technologies most companies in America still rely on to get stuff done. Being able to summon a car, book a table or send a birthday gift with the tap of a finger is great, but this kind of streamlined experience isn’t the norm in most workplaces, and young workers just can’t deal. “Many are only introduced to those tools when they enter the workforce and have to change their natural way of engaging to better match the way everyone else in the enterprise is working,” Pope says. “In many ways, Gen Y have to go backwards to use less efficient technology in the office than they use in their personal lives.”

Millennials are lousy at Google research.

And millennials’ technology problem isn’t limited to functions like emailing and creating spreadsheets. Researchers have found that a lot of young adults can’t even use Google correctly. One study of college students found that only seven out of 30 knew how to conduct a “well-executed” Google search.

“When it comes to finding and evaluating sources in the Internet age, students are downright lousy,” an article in Inside Higher Ed says about the study. “They were basically clueless about the logic underlying how the search engine organizes and displays its results. Consequently, the students did not know how to build a search that would return good sources.”

Some of the “most basic information literacy skills” are not being taught in high school, and are apparently not required to get a college diploma.

Duke and Asher said they were surprised by “the extent to which students appeared to lack even some of the most basic information literacy skills that we assumed they would have mastered in high school.” Even students who were high achievers in high school suffered from these deficiencies, Asher told Inside Higher Ed in an interview.

In other words: Today’s college students might have grown up with the language of the information age, but they do not necessarily know the grammar.

“I think it really exploded this myth of the ‘digital native,’ ” Asher said. “Just because you’ve grown up searching things in Google doesn’t mean you know how to use Google as a good research tool.”

‘Satisfice’
Educational institutions are finding that they are enablers in allowing students to do enough to ‘“satisfice” — that is, do what they can to get by and graduate’.

———

Martha C. White, “This Is Millennials’ Most Embarrassing Secret”, Time, May 4, 2015.

Steve Kolowich, “What Students Don’t Know”, Inside Higher Ed,  August 22, 2011.

May 13, 2015

Times are ‘rough’ for new petroleum engineering grads

by Grace

What should the flood of petroleum engineering graduates do now that the oil slump has made jobs scarce?

The price of oil is down by more than 40% since June, closing Friday at $59.39 a barrel. Employment at U.S. energy companies has dropped by 6,800 jobs so far this year, according to federal data released Friday, but jobs at energy-services companies have fallen far more, by perhaps 30,000. Graves & Co., a Houston consulting company, says energy employers have announced 120,000 layoffs around the world.

So jobs are scarce for the nearly 1,800 students in the U.S. expected to graduate this year with a bachelor’s degree in petroleum engineering.

Some are going back to school for an MBA and some are taking non-engineering jobs just to get their foot in the door.

One recommendation is to try to get a job as a roughneck.  But that’s not an easy job.

20150511.COCDrilling_Roughnecks1

———

Erin Ailworth, “Who Will Hire a Petroleum Engineer Now?”, Wall Street Journal, May 8, 2015.

May 12, 2015

Why college graduates should prioritize retirement planning

by Grace

Graduating college? It is time to think about retirement.

That’s not necessarily the advice millennials expect to hear, but it makes sense when you consider the power of compounding.

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)”

Your income-earning ability is your “human capital”.  Planning for retirement requires that you find a way to replace income generated by human capital with that generated by your investments.

… Your overriding financial goal: Every year, put aside 12% to 15% of your earnings for retirement, so by your 60s you no longer need the income generated by your human capital.

While 15% may sound like a lot, definitely do it if you can.  In any case, start saving at least a small percentage and then try to increase it every year.

Of course, this advice is only applicable to college graduates who have well-paying jobs.  So the first step in retirement planning is to find a job.  I know, that’s easier said than done in many cases.

While I used to oppose the idea of college graduates living at home, I’ve come to believe it can be a way to enable new college graduates to save money and start putting aside money for retirement at an earlier age.  This is especially true in high COL areas where renting an apartment can cost well over half your income.

To learn more on this topic, read Jonathan Clements’ “Financial Advice for New College Grads”.

April 7, 2015

Path to prestigious job may require a prestigious college degree

by Grace

A growing number of employers say a degree from a prestigious college counts less than it once did. But among elite finance and management-consulting firms—which offer some of the highest starting salaries for new graduates—an alma mater still matters. That puts students from less-selective schools at a disadvantage, career-services officers and students say.

A tale of two students demonstrates how the path to prestigious Wall Street jobs is easier when the starting point is an Ivy League school.

To land a summer job on Wall Street this year, Fairfield University junior Matthew Edgar sent 300 emails, made dozens of phone calls and several networking trips to New York banks from the Connecticut campus.

Darwin Li had a more direct route: The Princeton University junior applied online for positions and attended campus information sessions where company recruiters walked him through the application process and the firm’s culture.

The preferred schools vary depending on different career paths, but for Wall Street “they tend to include Ivy League schools and a handful of other elite institutions, such as Stanford University”.  Other careers have their own list of preferred schools, so the message to students with specific job goals is to do your research.

Students who do not attend preferred schools are not shut out completely, but they have to work harder.

For students at nontarget schools, the trick is finding a way into that pool. Without recruiters on campus, they must initiate a blitz of emails, calls and messages through networking sites like LinkedIn to find a banker or consultant willing to flag their application to recruiters.

Related:  If you want a job at an elite firm . . .

———

Lindsay Gellman, “How 300 Emails Led to a Summer Job on Wall Street”, Wall Street Journal, April 1, 2015.

April 1, 2015

Pharmacy graduates are finding a softer job market

by Grace

One of America’s most reliable professions is producing too many graduates and not enough jobs

A few years ago, students enrolling in college as pharmacy majors had high hopes about lucrative careers.  Now the outlook is not so rosy.

… Even as the economy struggled in the mid-aughts, pharmacy graduates easily found big salaries, 9-to-5 jobs, and the respect that came along with handling medications. Nicholas Popovich, a professor at the University of Illinois at Chicago College of Pharmacy, tells me that, “Some signing bonuses even involved a car, that type of thing.”

While New Republic labeled pharmacy careers to be “on the verge of a crisis”, the details don’t necessarily indicate the problem has risen to crisis level.

  • There has been a 70% increase in first-professional PharmD degree graduates from 2001 to 2011 due to the opening of new pharmacy schools and the expansion of existing programs.
  • The aggregate demand index (ADI), a tool that tracks the difficulty of filling pharmacy positions nationally, had remained relatively steady at a level of ADI = 4 (moderate demand) from 2002 to 2008 but has had a downward trend closer to 3 (demand in balance with supply) in more recent years, with several states in the Northeast region having their ADI dip below 3.
  • The anticipated role expansion and demand for pharmacists to provide direct patient care services has not come to fruition, causing a lower than expected creation of new pharmacist jobs.
  • The bottom line is that the supply of new pharmacists seems to be outpacing the creation of new jobs because the role of pharmacists has not changed as expected when pharmacy workforce needs were projected in 2001.

The number of pharmacy schools has almost doubled over 20 years alongside exuberant predictions about a boom in jobs.

… PharmD students are cash cows, taking on hundreds of thousands of dollars in debt and often committing to a longer course of study…

Meanwhile, graduates dealing with average debt loads of over $130,000 find themselves in a growing competition for jobs.

The scarcity of jobs is regional, with the Northeast and New York in particular experiencing a surplus of pharmacists.

AGGREGATE DEMAND INDEX 10-YEAR TREND

20150329.COCPharmJobsTrend2

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 Katie Zavadski, “The Pharmacy School Bubble Is About to Burst”, New Republic, September 29, 2014.

Randy P. McDonough, “Improving patient care, securing our role in health care: The time is now!”, American Pharmacists Association, November 01, 2014.

March 24, 2015

Are older workers crowding out job opportunities for young people?

by Grace

Older workers’ expanding participation in the labor force may be at the expense of employment opportunities for younger workers. 

One of the major trends in the U.S. workforce during the early 21st century is seniors’ expanding participation in the labor force. People who qualify for AARP membership have been retiring later and are more likely to be in the labor force now than people the same age were during the 1990s tech boom.

There have been significant changes for all seniors, but the increase is most striking among people 65 and older. For 75-year-olds, labor-force participation has risen to 14 percent from 9 percent since 2000. The number of people age 65 to 79 in the workforce has grown by 3.5 million. Of that, 1.6 million is due to the growing population in that age group, and 1.9 million is due to the increased propensity to work.

Employment helps seniors remain self sufficient.

The United States is going to be a very different place, demographically, for the next 30 years. Seniors putting in more years at the office will help ease that transition, cover a small part of Social Security’s deficit, and allow more older Americans self-sufficiency in their retirement.


The sliding labor participation rate for younger workers is clear.

20150321. COCLaborParticipationOldYoung1


The question remains how much this affects younger workers who are still suffering during this jobless recovery.

…workers 55 and under still have about 2 more million jobs to go before they recover all the jobs losses since the start of the great global depression …

20150321. COCJoblessRecoveryOldYoungWorkers1

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Salim Furth, “What Percent of 75-Year-Olds Are Still Working?”, The Daily Signal, March 21, 2015.

Tyler Durden, “Old vs Young: The Story Of America’s Two Labor Markets”, Zero Hedge, January 9, 2015.

March 13, 2015

Students are ‘fleeing’ law schools and journalism, but rushing into engineering

by Grace

Enrollment slumps in law schools and college journalism programs, but booms in engineering.

US students are fleeing law schools and pouring into engineering

… US law school enrollment is 93% of what it was in 2005, and the decline has accelerated since 2012:

20150312.COCLawSchoolEnrollmentDecline1

Engineering is the one graduate discipline that’s really exploded—enrollment has grown by 38% since 2005. It has substantially outpaced medical school, the second fastest growing graduate discipline, which has grow by 11% over the same period.

The shift reflects that, in the US, engineering degrees yield the highest salary bumps and the lowest unemployment rates:

20150312.COCEngineeringSchoolEnrollmentRise1


Journalism schools are seeing a decline.

Columbia Will Shrink Journalism School as Media Woes Mount
Class Size Rose in Recession, Now Receding Again

Columbia University’s Graduate School of Journalism will reduce its class size and cut about six positions from its staff as the news industry retrenches.

The school will gradually reduce enrollment over several years and has already stopped filling some vacant faculty positions, Steve Coll, dean of the school since 2013, said in an e-mail to students, faculty and staff today.

Interest in computer science is booming.

Columbia is seeing increased demand for training in digital media, Ms. Fishman said, adding that applications for the school’s dual degree in journalism and computer science were up 47% this year.

What’s a student to do?

Boom and bust cycles make for challenging career choices, but it’s not usually wise to pick a college major based on today’s hot jobs”.

Related:  “Dropping oil prices create concern for petroleum engineering students”

———

Max Nisen, “US students are fleeing law schools and pouring into engineering”, Quartz, March 10, 2015.

“Columbia Will Shrink Journalism School as Media Woes Mount”, AdAge, March 11, 2015.

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