Too many college graduates?

A growing number of college graduates are underemployed, concludes a new study from the Center for College Affordability and Productivity.

About 48 percent of employed U.S. college graduates are in jobs that the Bureau of Labor Statistics (BLS) suggests requires less than a four-year college education. Eleven percent of employed college graduates are in occupations requiring more than a high-school diploma but less than a bachelor’s, and 37 percent are in occupations requiring no more than a high-school diploma;

In 1970, fewer than one percent of taxi drivers and two percent of firefighters had college degrees; now more than 15 percent do in both jobs. Increasingly, new college graduates are working as clerks, cashiers, retail sales reps and waiters and waitresses, the report found. About five million are in jobs the BLS says require less than a high-school education.

Comparing average earnings for high school and college graduates is misleading, the report warns. “Overproduction of college graduates lowers recent graduate earnings relative to those graduating earlier.”

Not all colleges are equal: Typical graduates of elite private schools make more than graduates of flagship state universities, but those graduates do much better than those attending relatively non-selective institutions;

Not all majors are equal: Engineering and economics graduates, for example, typically earn almost double what social work and education graduates receive by mid-career;

The number of college graduates is projected to increase by 19 million in 20 years;  the number of jobs requiring a bachelor’s degree is projected to increase by 7 million, according to the BLS.

If President Obama’s college completion goal is met, even more young people will be competing for a limited number of professional jobs, warns Richard Vedder, co-author of the study and director of CCAP. Soon, would-be janitors will need “a master’s degree in Janitorial Studies.”

The “college for all” movement is misguided, CCAP argues, calling for “new and cheaper ways to assure employee competency”  and investing “less in four year degree programs and more in cheaper training, including high school vocational education.”

College graduates continue to earn significantly more than non-graduates, Anthony Carnevale, director of the Georgetown Center on Education and the Workforce, tells Inside Higher Ed.

“You can’t have a 48 percent surplus of college graduates and an 84 percent college wage premium over high school,” Carnevale wrote via e-mail. “This advantage wouldn’t have been growing along with the number of college graduates since 1983. The market is very responsive to labor supply…. If there was an over production the employers would’ve figured it out some time over the past 30 years.”

Nearly half of sales reps in the wholesale and manufacturing industries have four-year degrees in what the BLS considers a high school-level job. “What Vedder doesn’t point out is that sales representatives with B.A.s make $73,000 a year compared with sales representatives with high school degrees who only make $38,000 a year,” says Carnevale.


Vedder: Look at Pell recipients’ graduation rates

We spend tens of billions of dollars on Pell Grants for low-income students, but don’t know what percentage earn a degree, writes Ohio University Economics Professor Richard Vedder of the Center for College Affordability and Productivity, in an open letter to Rep. John Kline chair of the House Education and Workforce Committee and Rep. Virginia Foxx, chair of the higher education subcommittee.

Here is my idea: Require the U.S. Department of Education to collect and publish, by institution and for the nation as a whole, data on the academic success of Pell Grant recipients. What is the four-year graduation rate? Six-year graduation rate? Freshman to sophomore retention rate?

The graduation-rate statistics “are almost certainly embarrassingly, appallingly low,” Vedder writes, citing other research which shows a strong correlation between many Pell recipients and low graduation rates. But, whatever the numbers, we ought to know.

Pell recipients tend to have high risk factors, such as low-income status and “mediocre secondary-education performance (in part the consequence of low-quality primary and secondary public schools),” Vedder writes.

Nonetheless, if we spend over $40-billion annually on Pell Grants, wouldn’t it be interesting to know how much of that is associated with academic success, and how much with academic failure? How many college graduates are there that owe their degrees to Pell Grants? Is that number high or low in relation to the cost of the program?

Hearings also could investigate setting time limits on grant eligibility or rewarding students who complete a degree quickly.

Should a student with a very low probability for success, based on low high-school grades, test scores, etc., be given probationary Pell Grants, continued receipt of which is contingent on good academic progress? In short, should there not be some performance standards, as there are for most private forms of higher-education student assistance?

The number of Pell Grant recipients has exploded. Vedder suspects some grants are going to middle-income families who probably would find a way to send their child to school without the grant.

It is amazing that the Education Department doesn’t track success rates for Pell recipients. I asked Education Secretary Arne Duncan about it in a meeting in March. He said he suspected the graduation rate was low, but didn’t know.