Job Outlook for Recent College Graduates
“This spring’s college graduates face better job prospects than the dismal environment encountered by last year’s grads. But that doesn’t mean the job market is thriving,” so reported The New York Times in May. Perhaps this uptick could be compared to the Detroit Lions, who statistically improved in 2009, bringing their record to 2-14, over the 2008 debacle of 0-16. The National Association of Colleges and Employers (NACE), which tracks recruitment data, found that 24 percent of 2010 college graduates who applied for a job have one waiting after graduation, up from 20 percent last year. But the average salary offered to graduates with a bachelor’s degree has slipped 1.7 percent from last year to $47,673.
Andrew M. Sum, an economics professor at Northeastern University, said the job market was dismal for this year’s college and high school grads. “Many college graduates are taking jobs that do not require bachelor’s degrees, like retail clerk, office assistant or sales.” Using federal labor statistics, he has found that only 51 percent of college graduates under age 25 were working in jobs that require college educations, down from 59 percent in 2000. In 2007, 5.4 percent of college graduates under the age of 25 were unemployed; the official rate is now around 9.0 percent.
This may explain why unemployment among high school graduates is so alarming: college grads are willing to take jobs that high school grads used to get. Currently, high school graduates under age 25 who did not enroll in college, suffer a jobless rate of 24.5 percent, up from 11.4 percent in April 2007. One could also conclude this is the logic behind President Obama’s plan to develop 500,000 skilled workers in the U.S. and the sizable investment he plans to make to see that it happens.
Where’s the Opportunity?
Dona Gaynor, Director of Career Management Services for Florida Tech, commented, “The degrees that show the most promise for jobs are computer science, computer engineering, electrical engineering and other similar technical majors.” Adding, “We also see an increased demand this year for accounting and business majors, especially in the local area.” This is also reflected in the higher than average salaries Florida Tech graduates earn – $55,000 per year.
Gaynor’s observations are confirmed in the job market nationwide. One surprise that the NACE reported in its 2011 Job Outlook, was that the employment opportunities for accountants will rise 22 percent, according to the U.S. Department of Labor. Closely related careers include budget analysts and loan officers. These can expect salaries of $65,900 for Loan Officers, $68,960 for Accountants and $70,660 for Budget Analysts.
Salaries for finance majors rose 1.6 percent, to $50,546 in the past year, while those for liberal arts majors fell 8.9 percent to $33,540 – a point not lost on my own son who majored in Theology, but now works as a stockbroker for E-Trade Financial. For graduates with computer-related degrees, salary offers rose 5.8 percent, with an average salary of $58,746.
As the economy has improved, Wells Fargo Bank has increased hiring for financial analysts and entry-level positions in marketing and auditing. Deloitte LLP (DTTL), the consulting and accounting firm, has hired 5,300 college graduates, up from 4,800 last year. “Our businesses are beginning to pick up,” said Diane Borhani, Deloitte’s national director of campus recruiting. “Our hiring demand is directly correlated to our business growth.”
A CNN Money report concluded, “Large companies, those with more than 4,000 employees, plan to decrease hiring of all graduates by 3 percent, and medium-sized companies, those with between 500 and 4,000 employees, expect to lower hiring by 11 percent. Smaller companies, however, may provide a bright spot in the job market for new graduates. Employers with fewer than 500 staff members said they expect hiring at their companies to jump by 15 percent. These companies will hire 11 new graduates on average in 2010, and 8 of them will be at the bachelor’s level.”
Phil Gardner, director of Michigan State University’s Collegiate Employment Research Institute, believes the most sought-after graduates in the future will be those who majored in environmental science and statistics, for whom job opportunities will climb by 6 percent and 11 percent, respectively. “There is a reawakening in American society that environment sustainability is important, and there’s also a lot of stimulus money in that area.” Along these lines many job placement experts encourage college students to “follow the money,” meaning the federal stimulus money, as the best way of predicting where job potential will be, along with projected spending, e.g. health care.
One option some undergrads are choosing is to continue their education at the graduate level, thus delaying their entry into the job market until the recovery becomes more favorable. All the available data demonstrates that higher degrees usually translate to higher earnings, and in some professions those degrees are essential. Others, for much the same reason, are returning to school, hoping to make the most of a down economy by adding a baccalaureate or graduate degree to their resume.
John Antonelli worked for years at Sea Ray Boats in Merritt Island as a Microsoft Certified Technician. Making the kind of money he did, with a generous benefit package, college wasn’t that important to him. However, when he was laid off, it took him over two years to land a similar job at Harris Corp. In the process he realized, “My position was much more tenuous and my ability to market myself was far more limited without a college degree than I realized, so I decided to go back, starting at BCC.” He admits that balancing the learning curve at a new job, along with the responsibilities at home are challenging, but he feels the long-term payoff will be worth it.
Nelson McDonald graduated from Cocoa Beach High in ‘73 and went on to the University of Tennessee where he majored in Accounting. Preferring the fast paced and creative environment of real estate development, over that of a CPA, he became a specialist in golf community marketing in the Southeast. But then the real estate market had a stroke. Having received a legacy from his father, he decided to do something he always wanted – get an MBA from Harvard, which he finished this spring. “Some people have asked me if I think I can get a balancing ROI on what the degree cost me. For me, that was secondary; it is the satisfaction of achieving a lifelong goal that I wanted.”
The Elephant in the Room
One benefit local graduates may have, according to Florida Tech’s placement office, is that many employers make recruiting decisions based on the location of a school, and in tough economic times, they might recruit only at local schools to save travel costs. Others have reduced the number of the “key schools” that they recruit from to save recruiting costs, which means they might stop attending career fairs or conducting on-campus interviews at some schools.
Another point FIT’s Dona Gaynor pointed out was, “Most employers have diversity recruiting goals and are actively seeking students to reflect these goals, especially in majors such as engineering.”
Of course, the elephant in the room, in all this discussion, is the skyrocketing cost of collegiate education and the debt load graduates are entering the job market with. As one writer observed, “Amid this grim economic atmosphere, young workers are compelled to take on gargantuan levels of student debt and are confronted by the complete absence of even the threadbare social safety net available to other demographics.” In other words, student debt is being taken over by the government in order to keep the spigot open, yet this form of debt offers none of the conventional relief of a real estate “short sale” or even bankruptcy protection.
Students graduating with a bachelor’s degree from public four-year institutions owe, on average, $19,535. Undergraduates completing degrees at private four-year institutions now owe, on average, $25,350. In comparison, these same figures in the 2000-2001 academic year were $14,916 and $16,906 respectively. Some are beginning to refer to this as “Going broke by degrees.”
What is more, the cost of college keeps going up. In 2008, on average, a four-year degree from a public institution cost $57,000; by 2020 that price is expected to jump to $126,000. For private colleges, the cost was $134,000, but by 2020 the cost is estimated to be $300,000. For the first time the amount of student debt has passed that of credit card debt, but it is a debt carried by the federal government, which could be a potentially volatile and a politically manipulated situation.
Still Your Best Investment
According to the database at the Department of Education, there are over 4,100 public and private, four-year and two-year colleges in the United States. This does not include the growing number of online or extension campuses, which puts the number well over 5,700. Based on a study commissioned by USA Today, there are over 18 million college students in the U.S. and just over 17 percent of the population has a baccalaureate degree, in fact, 53 percent of Americans have gone to some college.
In 2010, approximately 1.6 million students received their four-year degree in the U.S. Why? The following shows the amount of money the average person earns throughout a lifetime for the different types of college degrees. It is still one of our best investments.
• Doctoral Degree – $3.4 million
• Professional Degree – $3.2 million
• Master’s Degree – $2.5 million
• Bachelor’s Degree – $2.1 million
• High School Diploma – $1.2 million
Where are the Jobs?
The Bureau of Labor Statistics projects these occupations will see the largest percentage increase in the next 8 years:
|Network Systems and Data Communications Analysts||53.4|
|Medical Scientists, except Epidemiologists||40.4|
|Biochemists & Biophysicists||37.4|
|Computer Software Engineers, Applications||34.0|
|Computer Software Engineers, Systems Software||30.4|
|Personal Financial Advisers||30.1|
Source: Bureau of Labor Statistics (BLS) employment projections for the occupations that will see the largest increase in employment in percentage terms that require a bachelor’s degree or higher in the next 8 years.