At the same time, the U.S. Bureau of Labor Statistics reports that the jobless rate for workers with at least a bachelor’s degree fell to 2.9 percent for the month of September. How can both be true? Many of those with jobs are considered “underemployed,” since they are in jobs that don’t require a college degree.
Unlike unemployment, underemployment does not have a universal measurement, nor does it receive as much attention. The lack of an underemployment figure—in particular, a measurement based on educational attainment—leaves the picture of how graduates are doing fuzzy.
A survey released in August by PayScale, a compensation-research company, attempts to fill some of the void, finding that graduates over a broad range of college majors have significant levels of underemployment. The findings highlight nine majors, including criminal justice, business management, and sociology, that have underemployment rates of over 50 percent.
The online survey, of 68,000 workers, also found that majors in the STEM fields have lower levels of underemployment.
PayScale’s measure of underemployment includes those who are underpaid, those who are not using their education or training, and those who work part time but want full-time work. Gary Burtless, an economist at the Brookings Institution, told The Chronicle in an email that while underemployment is a subjective term, PayScale’s definition is “as defensible as anyone’s.”
That definition is along the lines of what is typically thought of as underemployed. Perhaps less so is the BLS’s underemployment rate, which counts the unemployed, those marginally attached to the work force, and part-time workers who would like to work full time. Someone with a bachelor’s degree working full time bagging groceries does not count as underemployed in the bureau’s statistics.
Mr. Burtless noted that the PayScale survey’s respondents were self-selected, which raises some questions about its reliability.
The methodology means “the sample of respondents could differ wildly from one college major to another,” Mr. Burtless said. “Perhaps an outsize share of ‘general studies’ majors have time on their hands and have run into the PayScale questionnaire. ... At the same time, business-management majors may be too busy to answer the questionnaire, and consequently the responses obtained from this group are not representative of the situation of business majors more generally.”
Katie Bardaro, lead economist at PayScale, said some steps had been taken to minimize the online respondents’ “biases.”
More broadly, neither the BLS figure nor PayScale’s survey results tell us much about trends in underemployment, or the overall number of underemployed graduates.
Are More College Graduates Finding Themselves Underemployed?
That’s where researchers at the Federal Reserve Bank of New York come in. The bank has underemployment figures (using a definition similar to PayScale’s) going back to 1990. The latest tally puts the June underemployment rate for those with at least a bachelor’s degree at 34.6 percent. It estimates that recent graduates—those with bachelor’s degree or higher, ages 22 to 27—fare even worse, with 46 percent underemployed.
Researchers found that the underemployment rate for college graduates over all has held steady in recent years, but the rate for recent graduates has increased, despite an improving economy and a falling national jobless rate.
“Even though the level of underemployment was comparable to the early 90s,” said Jaison R. Abel, a researcher at the bank, “when you look at the types of jobs held by underemployed recent grads, you see a smaller share are working in good noncollege jobs and a larger share are working in low-wage jobs.”
That pattern “indicates that the quality over all has deteriorated,” Mr. Abel added.
According to the bank’s data, nearly twice as many recent underemployed graduates hold low-paying jobs (less than $25,000 per year in salary, such as retail clerk or waiter) today as they did in the early 1990s. Meanwhile, the share of underemployed graduates with what are called “good noncollege jobs,” like electrician or mechanic, which pay above $45,000 per year, has dropped significantly.
The gist of the New York bank’s data is something many young graduates already know: The lack of jobs that pay well and do not require a college education (such as manufacturing jobs, which declined in recent decades) has made the job market a less forgiving place for graduates still trying to find their footing.