Settling for a subpar job can hurt your career
Underemployment after college proves difficult to escape
CHICAGO — Since graduating from college last month, Gabriel Villagomez has been polishing his resume, updating his LinkedIn profile — and worrying.
Sure, the job market looks promising for new grads. And Villagomez, who plans to apply to medical school, just needs a job to hold him over for a year or so.
But with student loan bills looming, Villagomez can sense how the need for a paycheque — any paycheque — could suck him into a job that doesn’t take advantage of his education. He has seen cousins and friends abandon ambitions and fall into the rut of low-wage work when life gets in the way.
“I’m worried about not following through on my plans,” said Villagomez, 27, who spent five years in the Marine Corps before enrolling at University of Illinois at Chicago, where he majored in economics and minored in biology. “Sometimes it’s easier to get stuck in these other fields.”
While the nation’s sunny jobs reports show low unemployment and growing payrolls, the jobs available aren’t necessarily good ones, and many new college graduates find themselves settling for less than what they bargained for. Nearly 43 per cent of recent college graduates are underemployed — that is, working in jobs that don’t require a college degree, according to March numbers from the Federal Reserve Bank of New York.
While making lattes or staffing a cash register is often considered a youthful rite of passage during that bumpy transition from campus to the workforce, new research suggests that settling for a subpar job out of the gate can harm career prospects for years to come.
Two-thirds of new grads who were underemployed in their first job out of college were still underemployed five years later, while only 13 per cent of new grads who landed college-level jobs right away were underemployed five years in, according a study released last month by Burning Glass Technologies, a labour market analytics company, and the nonprofit Strada Institute for the Future of Work. The cycle gets harder to escape as time goes on. Three-quarters of those who were underemployed five years after college continued to be so at the 10-year mark, according to the report.
The skills and professional connections gained in the first job help lead to the next and then the next, and those who missed the early boat have a hard time catching up. Their earnings fall behind. Recent college graduates who are underemployed earn, on average, $10,000 less per year than their counterparts doing college-level work, the report found.
Women are disproportionately affected. Forty-seven per cent of women were underemployed in their first post-college job, versus 37 per cent of men, the report found. The researchers didn’t examine the reasons for the gender divide, but it could be linked to the growing specificity of job descriptions, as research has shown that women are less likely than men to apply for a job if they don’t believe they meet all of the listed requirements, said Burning Glass CEO Matt Sigelman.
In decades past, wandering aimlessly for a while after college was an accepted part of the transition to adulthood. Today’s new grads face a very different labour landscape that favours the focused, the researchers said.
For one, ballooning student debt makes it unwise to cut short earning potential. In addition, employers no longer expect new hires to stay with the same company for the long haul, so many don’t invest in entry-level training, yet they also have high expectations that people come in with a specific skill set, Sigelman said.
Meanwhile, the population of college graduates has risen markedly — more than a third of people over 25 now have at least a bachelor’s degree, compared to about a fifth 20 years ago — which has made it harder to stand out and has allowed employers to make college a prerequisite for jobs that traditionally didn’t require it. And new graduates face competition from older peers still recovering from the misfortune of graduating during the Great Recession.
As a result, Sigelman said, college students can’t wait until the second semester of their senior year to visit the career services office, and should start thinking strategically about career paths closer to freshman year.
A risk of underemployment is that it could discourage students from seeking a four-year degree. But most good-paying jobs do require college, so a better solution is for colleges to improve their career planning offerings, said David Attis, managing director of strategic research at EAB, an education consulting firm based in Washington, D.C. For example, he said, Queen’s University in Ontario has created a “major map” that outlines the courses to take, the clubs to join, the internships and study abroad opportunities to pursue, and students sit down in their first or second year to look at the occupations that could be relevant.
Students who are drawn to majors that have poor employment outcomes should also be encouraged to develop skills that the job market values, according to the Burning Glass report. The firm’s research has shown that liberal arts students, more than half of whom are underemployed in their first jobs, can significantly boost their employment and earnings prospects by acquiring additional skills, such as data analysis, graphic design and social media.
To avoid, or escape, the underemployment trap, new grads should try to be underemployed in a field where there is a room to move up into college-level positions, Michelle Weise, chief innovation officer for the Strada Institute, said. Taking jobs as help desk technicians or community health workers are more likely to get back on track than those who wait tables.