A study out yesterday from Rutgers University found that, not surprisingly, college grads are having a tough time finding a job. And those who do find one are being paid less to do work that isn’t up to snuff with their skill level. Yet, despite the meager payoffs of their college degrees, many graduates think the solution is more school, and more debt. But can even more school fix joblessness among college grads?
Maybe. A new Manpower study finds that one-third of employers worldwide cannot find qualified talent. So how can there be too many over-qualified college graduates and too many under-qualified job candidates?
Part of the issue has to do with what students are choosing to study. Young college grads with education, teaching, and engineering majors are more likely to find a job that matches the rigor of their college degree than grads who majored in humanities, according to 2009 Labor Department data cited by the New York Times. According to the Manpower survey, many employers think the problem is rooted in the education system, which fails to get children interested in what the economy really needs: science and engineering.
This recalls the much-debated point about whether our jobs problem is structural (due to a fundamental disconnect between the hiring needs of employers and the type of employees on offer) or cyclical (meaning the jobless rate is due to a downturn in demand for stuff). On this point economists still cannot agree. For his part, Federal Reserve chair Ben Bernanke has argued the economy’s problem is mostly cyclical. Others at the Fed, such as Federal Reserve Bank of Minneapolis president Narayana Kocherlakota, have argued just the opposite, that the problem is structural.
A new working paper by the IMF argues both. It finds that about 75 percent of unemployment is cyclical, while 25 percent is due to structural factors. The folks at Manpower agree. ManpowerGroup president Jonas Prising says the breakdown changes depending on the segment of the workforce you’re looking at. For college graduates, the main problem isn’t that they don’t have skills; it’s that they have the wrong ones. “Liberal arts skills are in over-supply, and that’s an education issue,” he says. “Being a college graduate doesn’t mean you’re work-ready.”
The solution? A better education system that informs students early about the jobs the workforce really needs. And flexible companies that are more willing to hire graduates with basic skills and then train them to fit the company’s needs before putting them on the job. Prising calls these job candidates a “teachable fit,” and it’s a concept he says companies will have to get used to. “We’re at a point in the cycle where companies look at 9% unemployment and think they must be able to find the perfect match for the job, so they’re slow and deliberate about hiring. Over time that expectation will fade, and companies will have to take a roll in making talent more employable,” he says.
Should that time come, it will sure beat chasing after another $150,000 degree.