Just How Underemployed Is Gen Y?

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Gen Y is in a bind. This group of 18- to 29-year-olds has been told they must go to college in order to find a decent job. Yet upon graduating, few jobs are available to young people — and those that are open often don’t require a college degree.

Earlier this year, The Atlantic pointed to data indicating that 53% of recent college grads were either jobless or underemployed. Underemployment is of course better than unemployment, but many of the jobs new grads are taking don’t pay well enough to make much of a dent in student loan debt. The average college graduate owes roughly $25,000 in debt, and the total student loan debt is now greater than a trillion dollars.

Graduates are being forced in large numbers to take non-professional jobs until they can find ones tied to the career they’d been preparing for. A new study by my company, Millennial Branding, and the on-demand compensation data and software firm PayScale gives a good indication of how underemployed Gen Y truly is. We gathered information related to where Gen Y workers were most likely employed, what skills they were likely to have, where they aspire to work, what majors had the best (and worst) choice of jobs, and more.

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Here are the study’s major findings, which shed light on the state of today’s young workers:

They are graduating into poor-paying retail jobs. Our study found that over 63% of Gen Y workers have a bachelor’s degree, but the most commonly reported jobs for Gen Y don’t necessarily require a college degree. What’s ironic is that in order to compete for professional jobs in this economy, a B.A. is usually required, yet when everyone has one, it’s hard to stand out. The most common jobs for Gen Y workers include Merchandise Displayer, Clothing Sales Representative, and Cell Phone Sales Representative. You can bet that Gen Y would much rather have a professional job linked to their major than settle for a job at the mall that, in theory, a teenager could do.

They love working at technology companies. We found that the top-ranked companies for Gen Y are all tech companies that offer a high degree of job satisfaction, low job stress, high pay, flexibility, and meaningfulness of job. Qualcomm, Google and Medtronic were at the top of the list. Gen Y has not only demonstrated a propensity to use loads of technology as consumers, but young people today also like how tech companies treat their employees. Many of them offer telecommuting, they are fast paced, always innovating and allow them to work on meaningful projects that have an impact on society. High salaries don’t hurt either.

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They prefer working at small companies over larger ones. Millennials bristle in work atmospheres that are rigid and bureaucratic, which is how many big companies operate. Gen Y tends to be attracted to smaller companies because the environment is more flexible, and they are more likely to be given additional responsibilities and feel like they are part of something in high-growth mode. The highest concentration of Gen Y workers are at small companies with less than 100 employees (47%), followed by medium companies that have between 100 and no more than 1,500 employees (30%), and the fewest work in large companies with more than 1,500 employees (23%).

They are social media savvy.  To no surprise, Gen Y are masters of the social media universe. The most common Gen Y skills are focused on online marketing and social media, such as blogging, social media optimization and press releases. While most Gen Ys have profiles and are actively on social media, many don’t understand how to use the tools for business purposes. Despite this, they are very interested in working in social media for companies because they are passionate about the tools.

They are very entrepreneurial. Gen Y sees successful entrepreneurs, such as Mark Zuckerberg, and want to emulate their success. They see the best path to a successful career as starting a business that has a purpose. Relative to other generations, Gen Y is 1.82 times more likely to major in Entrepreneurial Studies, which was rarely ever offered as a major a few decades ago. More and more colleges are offering entrepreneurship classes in order to take advantage of Gen Y’s entrepreneurial ambitions.

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For the time being, however, when many of these entrepreneurial young people graduate, they are more likely to be collecting a meager hourly wage from behind a cash register than they are to be starting businesses.

Dan Schawbel is a Gen Y career expert and the founder of Millennial Branding. He speaks on the topic of personal branding, social media and Gen Y workforce management for companies such as Google, Time Warner, Symantec, CitiGroup and IBM. Subscribe to his updates at Facebook.com/DanSchawbel.
28 comments
Kate
Kate

I'm one of those Gen Yers who has been underemployed since graduating college, as have most of my friends. In my case, I took a job working at an amusement park, then spent two years working as a medical delivery driver, before finally going back to school via police academy - I graduate in December and will get a job in law enforcement, and I'll start working on my masters next year.

Another friend of mine is going to graduate school to get her masters in accounting - she was told in college that her math/business double major would be enough to get her where she wanted, only to discover that it wasn't. Yet another friend, an English major, is in nursing school. We all graduated with degrees into a world where degrees are virtually useless.

We're learning to get by in creative ways (why is illegal downloading so popular? Who has $15 for movie tickets or a CD?!) and moving back in with our parents (I'll have been back two years at the end of January, and my goal is to have a concrete plan in place to move out before my 26th birthday at the end of March). There's been a rise in Gen Yers who are self-employed or contract out as social media experts, because that's what we can do.

But basically, we all understand one fact - degree or no degree, all of us are equally screwed.

Michael A Rowland
Michael A Rowland

Today's education system is way too easy.  College is the new high school.  There are plenty of students in public universities who honestly shouldn't be in college.  I've given lessons and homework out that I would have had no problem doing in middle school.

fiafa
fiafa

Try looking up entrance exams for colleges from previous centuries. It's enlightening to see how dumbed down and provincial modern colleges are. (At the same time, I think the vast majority of people can and should do better in life by going to trade school or finding a mentor. College isn't for everyone, and it shouldn't be the only valid life track.)

secondfold
secondfold

I think one of the best deal now for a teenage still at home might be to work 4-5 years,  save all that money while he has no expenses and put a cash down on an investment such as housing etc.. Because really, whatever you can graduate in, 50k-100k in the red by your early 20's is just insane.

secondfold
secondfold

Generation Y was told to go to University and get degrees, as this would lead to a good job. After graduation, these students bombed every companies and institutions they could with their oh-so-educated-resume. HR specialists weren't impressed a bit as these applications filled their databases of potential candidates (Yes, nowadays you are not allowed to meet managers anymore. Fill the form and good luck in the lottery.) It is not uncommon anymore to see engineers grads etc driving taxi cabs.. The education system is outdated and became way too slow and irrevelant with the ever increasing speed of the industrial system.

18235
18235

a lot of college grads are just plain stupid, with college having dumbed down to get the most money.

and THE ATLANTIC is a leftie rag that doesnt allow non-liberal posts.

fiafa
fiafa

 This is true. However, it's possible to tell the kids who are intelligent from the kids who aren't intelligent. All it requires is bringing them in for an interview and asking them a few questions.

Heck, you can often just rule out anyone who majored in Underwater Basketweaving Studies right off the bat.

Mary Waterton
Mary Waterton

Between the export of GOOD high-paying manufacturing jobs to China and Washington's brain-dead Keynesian insistence that they need to "stimulate the economy" by issuing large numbers of H-1B visas to internationals (60,000 back in May), well, there just aren't any GOOD jobs left for these poor kids.  And POOR is the operative word because they have borrowed $50K to $100K and now can't find a job that will allow them to repay their debts.

Wise up America. Knowledge is good; college is crap.  Neither Bill Gates nor Steve Jobs earned a college degree. Think about that.

swampwiz
swampwiz

Agreed - why are we even having a debate about admitting in H1B engineers when there are plenty of unemployed newly graduated and "seasoned" early middle aged folks like yours truly?

tenguzero
tenguzero

As a 30-year-old working in the IT dept. at a medium-sized tech company in MA, I can empathize with this "Gen Y" group and the difficulties they're having getting their feet in the door (I was there myself not too many years ago). However, I'm close enough to "Gen X" that I can say I spent the majority of my K-12 years with little more than a school "computer room" that consisted of a dozen dusty Apple IIs, my family didn't get a computer until I was in 8th grade, and I didn't have a cell phone until my early 20s. I speak of the fact that I straddle the fence because I feel it allows me to justify my viewpoint on this situation: deal with it.You only have to read between the lines on this article to understand that "Millenials" are ultimately their own worst enemies. But first:

-Do I think the baby boomers have screwed us? Sure -- they created many of the social support systems in service today, then they grew them, and now they're going to crash them (and leave the younger generation holding the bag). They built the housing industry up to astronomical heights, then they cashed out their homes or used them as ATMs, then they crashed the industry when their artifically inflated bubble burst courtesy of all the Fannie/Freddie BS they instituted and Wall Street games they invented. Now they're taking not only the benefits that their generation enjoyed along the way (pensions, houses that were purchased at dirt-cheap prices and thus are still worth money, etc.) but they're also preparing to start drawing on SS, medicare, and other programs that (while they certainly contributed to and are entitled a share of) they never cared to do anything about overhauling, and will therefore likely fold under the weight of their generation's burden.

-Do I think the colleges are screwing us? Sure -- they've relentlessly raised tuition rates year after year in the name of more activities, more new buildings, more fad-degree programs, more sports teams, and on and on. They've sold an entire generation on the strength of crap like "Global MBAs" and "Entrepreneurial Studies". They've led people to believe that to get anywhere in the world, you NEED a degree, and you NEED that degree from a school that has Professor So-and-So on staff. Then they waste 75% of the credit hours they charge for by subjecting students to politically slanted lectures from holier-than-thou professors, mindless PowerPoint presentations that build few skills beyond the art of nursing an energy drink to stay awake, and near-useless labs that teach you what something is, but not why it is or how it became that way (they leave that to you to figure out for yourself by reading that grossly overpriced textbook that you'll never ACTUALLY use because you're too busy writing papers and preparing slideshows and dicking around with the abundant amount of extracurricular activity the school provides because they know if they dangle it out there to a bunch of young adults, by the very nature of chemistry said young adults will bite.)

In the end though, it all comes back to the 18-29 year-olds that are suffering through this, because they have the power to change their lot -- if only they cared to. Instead, they're content to sit around in their parents basement, work their underpaying jobs, and do little more to change their situation outside of bitching about it on blogs and social media sites and forums and Youtube. Newsflash kids --just because you built up all that college debt and are so media-savvy and were told by your parents all through growing up that you're a special flower and you will excel at anything you put your mind to and you shouldn't settle for anything that runs contrary to your ideals, doesn't mean you're entitled to crap. I spent $10k on an excellent, intensive computer support program at a local technical education center, and the month I graduated the tech bubble burst (the big one in 2001). I tried to get into the field -- didn't happen, so I waited tables and worked at RadioShack and went back to school a couple years later to get my Associates degree at a local community college (and it only cost me another $16 or $17k.) Then when I graduated it STILL took me a couple years to find a job in my industry. Eventually I did, but it took hard work and a desire to make it happen  -- not hours blogging and tens of thousands of dollars of debt for junk degrees. And furthermore (using this very article as an example) I didn't get all mopey because at 22 years old Google didn't come to my front door and offer me a dream job after I went to college. And I didn't expect ideas as abstract as entrepreneurship would immediately take me to the land of success because some professor taught me a class about it. I put my nose to the grindstone, I paid my dues in years at a help desk, and now I'm in a pretty good place. It's not hard, you just have to quit expecting the world to come to your doorstep and offer up it's bounty. It doesn't work that way. Unfortunately, for all the school debt and good intentions of your parents and idealistic lectures from professors, no one bothered to drive that time-tested lesson home to you. And you don't even care to heed it anyways.

Lerra
Lerra

Gen Y'ers work at small companies not out of preference, but because that's who is hiring. Many large companies receive enough applicants that they are able to hire older and more experienced workers for entry level positions. Large companies also tend to offer better benefits, and their stability is appealing to people with families. There's also more room for upward advancement. There is less competition for openings at small no-name companies, so young workers are more likely to be hired in those positions.

Bill Manning
Bill Manning

They should do what I did. Drop out of high school and start your own online websites. Make what you want depending on how much work you put into it and work at home. No degree required.  

Adam Ultraberg
Adam Ultraberg

Yes, these college graduates should follow your example and drop out of high school.

armynod
armynod

Tech company jobs low stress?  This study is a joke.

Cynthia Rouse
Cynthia Rouse

This is what happens when the corporate plantation, and unregulated banks can do whatever they wish. Anything under $15@hour is slave labor. My advice to young people is this, unless you are entering a top profession; law, medicine, accounting or finance, you need to become an entrepreneur. It is not possible to survive, marry, raise a family and prosper on $9.50@hour; and that is what these jobs pay. I would like people to remember something else; all of these politicians, who talk about the middle class, have done nothing but pass laws favoring corporate rule and deregulation for the last 30 years. What kind of leaders do this to their own people? We have two "political parties" carrying out one foreign and monetary policy. That is who is running the US now; the federal reserve, the "too gargantuan to exist" banks(see LIBOR), and the military/defense contractors.

@hour:disqus 

The people are totally left out of the equation; and I can only assume that these "people" want an impoverished and enslaved population, with severely diminished civil rights, when the global economy crashes. I think that is their plan.

To what is left of the middle class, do not buy a house, the worst is still yet to come; keep your assets liquid; and stop spending so much on the unnecessary, if you want to survive the next crash.

Ruth Raynor
Ruth Raynor

Who would want to work for some massive company where you're an anonymous cog? I love working for smaller ones, you quite often meet the CEO face to face in the coffee room, or even spend a few hours doing their filing for them. This builds up rapport between head honcho and little worker bee- I want to do a job better when I see that my output directly affects someone, and they might empathise more with me, or deliver praise directly to me so I know I'm doing a good job.

Being Gen Y only really sucks if you try to live out the dream of your parents' generation- life long employment, home and car ownership, 3 kids, keeping up with the Joneses. If you choose your own path and choose work with what you can achieve then you'll be much happier. I know several people only a few years older than me (I'm 22) who went and started up their own company instead of working for someone else. It's hard work, but they're happy to have that control over their life.

Gary McCray
Gary McCray

Gen Y as yet another euphemistically tagged generation is now called is screwed.

We have stuck them with the weight of everything we have and are continuing to do wrong.

They have no chance of achieving the relative affluence of either our or our parents generation and are more likely destined to face global economic collapse and worse.

Inflation, downgrading of pay scales and huge under employment of over qualified young people means they are going to be an unhappy and rebellious group.

Their discontent is likely to grow until reckoning is inevitable.

V.

Cynthia Rouse
Cynthia Rouse

If banks are "too gargantuan to exist" does anyone notice when all of the money disappears; or are they like the "black holes" in space that absorb all matter, and anti-matter, and 360T in global derivatives stuffed into every bank, in every country, in the world. The Mars rover found some old paper from countrywide last week, in a dust cloud, that was bundled with luxury mortgages from Calcutta bundled via Deutsche, Barclays, and Standard rip off.

Cynthia Rouse
Cynthia Rouse

Not to mention the dimunition of their first and fourth amendment rights. It is shameful the outright thievery and corruption that most people have been forced to endure. I think, at this point, if it was fixable, they would have fixed it. I think right now they are trying to contain it and manage the decline.

armynod
armynod

It ain't broke for the 1%.

Cynthia Rouse
Cynthia Rouse

There aren't enough of them to sustain the entire planet.

armynod
armynod

Well, at least they shouldn't need health care.

Alan Hodgson
Alan Hodgson

 And even worse, they'll be expected to pay for the boomer's retirement and medicare. Good luck with that.

zza371creek
zza371creek

I do think tech companies are today's factory jobs. A long time ago Factory jobs where what most people enjoyed doing and loved working for big factories like ford. You got high benefits and a lot of time off.

I am not sure how long tech jobs will remain in this country. With the growing power of overseas tech companies and growing education of people overseas. I think the tech jobs will be like the factory jobs and all end up overseas in the next few years.  More so as remote technology such as the cloud kick in.