Half of college graduates may be headed for unemployment

Half of college graduates may be headed for unemployment
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The U.S. Bureau of Labor Statistics (BLS) revealed last week that 14.7 percent of Americans (or roughly 23 million) are now unemployed as a result of COVID-19. It’s the highest unemployment rate since the Bureau started tracking unemployment on a monthly basis in 1948, with some saying the real number is actually much higher.

The Bureau’s report also detailed job losses by industry, with some of the greatest losses in industries that college students flock to: Education and health services (-2,544,000), professional and business services (-2,128,000) and government (-980,000).

IDEALS, our nationally-representative study across more than 120 colleges and universities, asked students about their experiences with various forms of diversity in college, but we also asked about their career aspirations.

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In Spring 2019, we asked college seniors – last year’s graduating class – what industries they planned to enter upon graduation, and some of the highest proportions of students selected education and health care (24 percent combined), business (20 percent), and government (4 percent). Taken together, this means that about 50 percent of students who graduated just one year ago aspired to enter industries with some of the greatest job loss numbers in April 2020. Smaller proportions of students expected to pursue careers in media (3.9 percent), social services (1.9 percent), advocacy (1.7 percent), religious and intentionally secular communities (0.91 percent) or the service sector (0.28 percent), while 6.4 percent reported being unsure about their career aspirations. 

There is, however, a silver lining to these findings. Notably, less than 1 percent of last year’s graduating class aspired to enter leisure and hospitality professions (included in what IDEALS termed the “service sector”), which far and away saw the greatest job losses in April 2020 (-7,653,000) according to the BLS report. This is likely because many jobs in the service sector do not require a post-secondary degree.

Another reason to hope is that the lionshare of last year’s grads (31 percent) planned to enter more than one employment sector, according to our study. Perhaps this indicates that graduates aren't locked into one sector, demonstrating a versatility that could be a huge advantage in the current job market.

But for a perplexing number of recent college graduates, our findings suggest that they are facing, or will soon face, what some are calling the “worst job market in modern history.” To make matters worse, thousands of internships are being canceled, which are usually a dependable stepping stone into industries like business and government.

All of this is bad news for higher education, which is considered an attractive option to most 14-23 year-olds because they want better jobs and financial security. Public universities have also faced mounting pressure from their state governments to improve their job placement rates (i.e. performance funding), with the threat of losing critical state funding if their outcomes don’t measure up.

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Unfortunately, if recent graduates have no other choice but to take a job they are overqualified for, they will be in good company; a recent study found that as many as 43 percent of recent college grads face underemployment, or are working jobs they are overqualified for. 

Of course, recent graduates could always forego the current market and pursue an advanced degree for the time being. In fact, our study found that two-thirds of the 2019 class aspired to a master’s, doctoral or professional degree (e.g. J.D. or M.D.).

While having an advanced degree has been linked to higher earnings and competitiveness in the job market, aspiring students may have more difficulty in the current season securing the financial aid and fellowships that typically help defray the more substantial costs of going to graduate school. Furthermore, will students be content paying the heftier price tag to take classes virtually? Early reports suggest not. 

Recent graduates have a lot to consider, in as much time as $1200 can afford (if they are even eligible for the one-time stimulus relief check or fortunate to attend a college offering emergency aid). They should take whatever opportunities they can to develop the job skills needed to succeed in a post-COVID world, including adaptability, tech savviness, innovation and data literacy, and take advantage of whatever services their school’s career center provides.

They should also maintain realistic expectations and goals. Despite well-intentioned remarks that “the economy always bounces back,” it could be much slower to recover than we think. Most importantly, they should be vigilant in caring for their mental and emotional health. 

Finally, recent grads should maintain a healthy diet of hope. Though Americans have an insatiable appetite for bad news, one recent report found that 46 percent of around 7,000 companies are still hiring. This unique season of waiting may be the only opportunity new graduates have to honestly evaluate what they would bring to a new job — their social habits, work ethic and any plans they have (or don’t have) for personal growth and professional advancement. Though the ideal job might not be there right now, seizing this time to improve and prepare will pay off in the long run.

*The authors would like to thank Kevin Singer for helping to write this piece and Lori Durako Fisher for analyzing the data. 

Matthew J. Mayhew is the William Ray and Marie Adamson Flesher professor of educational administration at Ohio State University and co-principal investigator of IDEALS. Follow him on Twitter @MattJMayhewPhD. Alyssa N. Rockenbach is a professor and alumni distinguished graduate professor of higher education at North Carolina State University and co-principal investigator of IDEALS.