A Generation Out of Luck

The class of 2013 will face a jobs and career crisis when they graduate. Gary Lapon examines the different dimensions of the crisis – and why it’s taking place.

What happens to a dream deferred?

Does it dry up
like a raisin in the sun?
Or fester like a sore—
And then run?
Does it stink like rotten meat?
Or crust and sugar over—
like a syrupy sweet?

Maybe it just sags
like a heavy load.

Or does it explode?
—Langston Hughes

College graduation is supposed to be a time of celebration—a time for graduates to look back on years of hard work and achievement, and forward to a bright future filled with promise.

Yet the class of 2013—the young women and men who were submitting college applications in the fall of 2008 as the world financial system came to the brink of Armageddon following the collapse of Lehman Brothers—are facing a future that of uncertainty and diminished prospects.

They are the latest entrants into what has been dubbed the “lost generation”—so-called because the high rates of unemployment and underemployment its members endure at the start of their working lives drag them down throughout their working lives, making it more and more difficult to maintain the standard of living of their parents.

Only half of recent graduates have been able to find a full-time job that makes use of their degree. Yet all are still left with the bill from college, with the average student loan burden nearing $30,000. With the number of new graduates expected to outstrip the number of new jobs requiring a degree over the next several years, this trend will only get worse.

If the current priorities of big business and the politicians who serve them continue to set the agenda, millions of young people will be robbed of their hopes for the future.

But this isn’t inevitable. For most of the class of 2013, their best possibility for a decent future lies not in the rat race for ever-scarcer decent jobs, but joining together to fight to improve conditions in the jobs they do have and to demand a fundamental transformation of a system that treats them as expendable.

A report released last month by the Economic Policy Institute (EPI), titled “The Class of 2013: Young graduates still face dim job prospects,” paints a picture of a jobs crisis for youth that has multiple layers.

To being with, nearly 9 percent of college graduates aged 21-24 who aren’t in graduate school are unemployed, actively looking for work and unable to find it. This is more than double the rate for college graduates over age 25.

Those who have been able to find jobs are making less money. Average hourly wages, adjusted for inflation, for young college grads were $16.60 in 2012, the lowest they’ve been since 1997—when most recent grads were in elementary school—and just 25 cents greater than they were in 1989, before many were even born. Had wages kept up with the inflation-adjusted growth in the gross domestic product, which rose by 72 percent over this period, the hourly wage would be over $28 today.

Once student debt is factored in, there has plainly been an outright decline in living standards. The average recent graduate with $25,000 in debt pays between $200 to $300 a month, depending on their repayment plan—a huge burden given the stagnant or dropping income.

Recent grads are also much less likely than previous generations to find jobs with benefits. Just 31.1 percent of employed recent grads have employer-provided health insurance, compared with 60.1 percent in 1989. Just 27.2 percent have a pension.

An increasing number of college grads are working jobs that pay minimum wage. According to the Wall Street Journal, nearly 300,000 people with at least a bachelor’s degree are making the minimum wage, double the number in 2007.

The lack of decent jobs with benefits makes it easier for employers to take advantage of young workers, who they know have few other options. Maria, a health care worker in Massachusetts in her early 20s, who earned her bachelor’s degree while working full time, explains her situation:

I worked as a switchboard operator when I completed my associate’s degree. I took a promotion to case manager, and my new supervisor assured me that I would get a raise after I got my degree. I took the job, and in my last semester, while completing my bachelor’s, I was offered a job at another agency. It was better-paying, but I had to turn it down because I was pregnant and needed the paid maternity leave at my current job, which the new job didn’t offer, and because I was promised a raise. It’s been more than a year after I got my bachelor’s, and I still haven’t received a raise or found a job in my field.

Beyond joblessness, rising debt and falling wages, there’s the issue of underemployment: those unable to find full-time work, and those working in jobs for which they are overqualified.

An increasing percentage of recent graduates qualify as “underemployed,” which includes those who are unemployed, those working part-time but seeking full-time work, and those who looked for work in the past year but have given up. According to the EPI report on the Class of 2013, the rate of underemployment for recent college grads jumped from 11.2 percent in 2008, at the beginning of the Great Recession, to a peak of 19.8 percent in 2010, just after the official beginning of the “recovery.” Underemployment was still at 18.3 percent in 2012.

As the EPI researchers point out, this “does not include “skills/education-based” underemployment (e.g., the young college graduate working as a barista).” College graduates working in jobs that don’t require a college degree is not a new phenomenon, but has gotten worse in recent years, the EPI report found:

[I]n 2000—when jobs were plentiful and the unemployment rate was 4.0 percent—40 percent of employed college graduates under age 25 worked in jobs not requiring a college degree…[T]he share of young college graduates working in jobs not requiring a college degree increased over the 2000–2007 business cycle, increased further in the Great Recession, and has not yet begun to improve…

[I]n 2007, 47 percent of employed college graduates under age 25 were not working in jobs requiring a college degree, and…this share increased to 52 percent by 2012. This increase underscores that today’s unemployment crisis among young workers did not arise because these young adults lack the right education or skills.

As the EPI researchers and other economists have shown, these effects will have a lasting, if not permanent, impact on the future prospects of recent graduates. “Research shows that entering the labor market in a severe downturn can lead to reduced earnings, greater earnings instability, and more spells of unemployment over the next 10 to 15 years,” the study reports.

Less than half of recent grads are working in a full-time job that requires a degree. Even some of those who have a full-time job have had to take a second just to make ends meet. Gloria, who graduated from Rutgers last year with a journalism degree, finally found a full-time job in her field after nine months of searching, while working in retail and living with a relative:

I started applying for jobs in January of 2012, four months before graduation. By graduation, I was excited, but so stressed out…I had done everything right! Double major, minor, decent GPA, tons of extracurricular activities, study abroad, unpaid internship. I took advantage of everything that my school had offer: I wrote for the paper, volunteered at the radio station, worked for the television channel and even created my own website.

Now I finally have a job in my field, but it’s only a temporary position, and I work a second job that I wouldn’t have taken in high school, just to afford to live in a dorm-sized studio apartment with roaches. Honestly, it’s hard. This past year has been the toughest one yet. All my dreams and all the stuff that I had believed growing up had collapsed…it’s all a lie.

This doesn’t mean that the alternative—not going to college—is any better. If young college graduates are facing a jobs crisis, young workers with only a high school diploma are facing a catastrophe.

For the 40 percent of high school graduates aged 17-20 not enrolled in higher education, official unemployment averaged 29.9 percent from March 2012 to February 2013, more than three times that of recent college graduates. Underemployment for young high school grads stands at a shocking 51.5 percent—which means more than half are unemployed, working part-time when they’d rather work full-time or have looked in the past year, but have since given up.

The jobs and career crisis facing the class of 2013 begs several questions: What is causing this crisis? Is this a temporary blip or the “new normal”? What can be done to change it?

The most obvious cause of the crisis for young workers is the one afflicting working people of all ages. According to the Center for Budget and Policy Priorities, nearly four years into the official “recovery” from the Great Recession, there are still more than three people looking for work for each job opening:

[T]he economy has recovered only about 6.2 million of the 8.7 million jobs lost between the start of the recession in December 2007 and early 2010…employment was 1.9 percent (2.6 million jobs) lower in April 2013 than it was at the start of the recession.

According to the EPI’s Heidi Shierholz, it would take more than 8 million jobs to replace those and keep up with population growth, which could take more than five years at current rate of monthly employment increases.

Recent graduates are at a disadvantage when competing for jobs since they lack the experience of older workers. And increasingly, older workers have been forced to look for jobs that were once considered entry level. A survey by Rutgers University found that of the 23 percent of respondents who suffered a layoff during the Great Recession, more than half of those who had found another job were making less than they were before.

As Brad Plumer illustrates at the Washington Post’s Wonkblog, some 60 percent of the jobs lost during the Great Recession paid between $13.84 and $21.13 per hour, yet only 22 percent of the new jobs created since then fall into that category. The majority of the new jobs, some 58 percent, are low wage, paying less than $13.84 an hour.

So mid- and late-career workers are taking jobs that used to be entry-level positions for recent grads or jobs that don’t even require a degree, placing them in greater competition with younger workers to the detriment of workers of all ages. As Sherry Wolf, an author and contributor to SocialistWorker.org, explains:

I graduated college in 1987, have worked since I’m 14 years old and am now a highly skilled writer, editor and copy editor, yet I’ve spent the last year receiving unemployment insurance for the first time in my life, supplemented by freelancing gigs. What’s stunning to me about the current economy is not just the paucity of full-time jobs with benefits, but that neoliberal restructuring has meant that experienced white-collar workers like me are now being paid a piece rate on the level of recent college graduates, while 20-somethings are forced out of my field almost entirely, and compelled to find jobs as baristas.

If trends continue, things are likely to only going to get worse for young college grads. A recent report by the Center for College Affordability shows that from 2010 to 2020, “The number of college graduates is expected to grow by 19 million, while the number of jobs requiring a bachelor’s degree is expected to growth by fewer than 7 million. We are expected to create nearly three new college graduates for every new job requiring such an education.”

Finally, it’s important to keep in mind that not all college degrees are created equal—nor are outcomes anywhere near equal for all college graduates. Higher education, like the society as a whole, has become increasingly unequal in recent decades. Rather than a means of mobility between classes, colleges often function as a means to maintain class stratification and reproduce inequality.

As Thomas B. Edsall pointed out in a New York Times blog last year:

Seventy-four percent of those now attending colleges that are classified as “most competitive,” a group that includes schools like Harvard, Emory, Stanford and Notre Dame, come from families with earnings in the top income quartile, while only three percent come from families in the bottom quartile…in the nation’s 1,000-plus community colleges, almost 80 percent of the students came from low-income families.

The elite schools are a key place for the wealthy to develop social networks that they will use—in addition to family connections—to land high-paying jobs after college. And elite college alumni networks will aid them in obtaining employment throughout their careers.

Poor and working class graduates will find themselves locked out of these networks. Thus, they will need to take up the task of organizing with co-workers to fight for rights at jobs for which they are overqualified.

Just as it took the union drives of the 1930s to make industrial jobs “good jobs” with decent pay and benefits, and the struggles of the 1960s and ’70s to do the same for public-sector jobs that provided a way out of poverty for many African Americans and women, the majority of today’s working class college graduates will need to focus on collective struggle, rather than hope that individual striving will allow them to make it against the odds.

Ultimately, the mismatch between the number of young graduates and the jobs that require degrees raises questions about the nature of higher education in society, our relationship to work, and whether education should be shaped by the needs of business or the collective social needs of the majority of people in society.

Businesses, although they complain that college students aren’t qualified, benefit enormously from a situation where the supply of the commodity they need to purchase—in this case, the labor power of college-educated workers—exceeds the demand. This drives down the price of that commodity—the wages and benefits of workers.

And with students and their families shouldering an increasing burden of the cost of higher education while companies cut back on training programs, businesses are able to pass along the cost of training a new generation for be exploited onto workers themselves.

This state of affairs makes sense—and money—for employers, but is disastrous for the vast majority of people. With so many highly educated people underemployed, not only are they worse off, but society as a whole can’t benefit from their wasted talents.

Meanwhile, in a society so wealthy that a fraction of the bloated military budget could make higher education free for all, there’s no reason not to expand access to higher education—and to create the public-sector jobs that could provide people with the opportunity to use their education to serve those in need.

For example, average class size in public secondary schools is nearing 25 and is almost double that of private schools. Doubling the number of public school teachers would remove this disparity and create more than 3 million jobs, which would finish replacing the jobs lost during the recession and then some.

There are about 2.4 doctors for every 1,000 people in the U.S., among the lowest ratios in the industrialized world, trailing countries with much less wealth like Kazakhstan (3.8), Cuba (6.7) and Lebanon (3.5). Training an additional 400,000 doctors would put the U.S. in a comparable position with other advanced countries like Germany and France. It could easily be paid for with the savings from switching to single-payer health care.

Clearly, the need exists for more college-educated workers, not fewer. But creating opportunities for them to use their training and talents will require a major shift in social priorities—and achieving that will require mass struggle and organizing.

If the class of 2013 wants a future, they will have to fight for it.