The age-old promise of the college wage premium is slowly dying. The WSJ estimates that nearly half of college graduates with jobs are underemployed—that is, working in jobs for which their degree isn’t typically necessary:
Economists have generally assumed the problem was temporary: As the economy improved, companies would need more highly educated employees. But in a paper released Monday by the National Bureau of Economic Research, a team of Canadian economists argues that the U.S. faces a longer-term problem.They found that unlike the 1990s, when companies needed hundreds of thousands of skilled workers to develop, build and install high-tech systems—everything from corporate intranets to manufacturing robots—demand for such skills has fallen in recent years, even as young people continued to flock to programs that taught them.
That students are expected to spend four years of their lives preparing for jobs they were already qualified for borders on the outrageous. But with college tuition at an all-time high and total student debt at $1 trillion, there’s an even bigger problem here. College grads can no longer count on the most basic return on their investment: solid professional employment.Jobs that pay $10 per hour won’t go far toward paying back six-figure loans. If students remain stuck in low-paying jobs, as the report suggests, this debt burden could become a permanent fixture in their lives.Change is coming. Within the near future tuition costs may drop, or perhaps skipping out on college altogether will become a more socially acceptable alternative for high school grads. But until that day, parents and rising college freshmen may want to consider the choice of their majors more carefully.