More graduates are working less

Recent college graduates are having trouble finding jobs in this economy, reports Reason‘s Hit& Run.

The Sluggish Economy Slams Recent College Grads

For-profit students borrow more, but don’t earn more

For-profit college students borrow more than community college students, but don’t earn more, concludes a Center for Analysis of Postsecondary Education and Employment (CAPSEE) working paper.

Six years after enrollment, for-profit students are more likely than community college students to have earned a certificate or associate degree.

They have lower employment rates and earnings compared to all college-going students, but those disadvantages are “linked to their prior academic record and disappear when compared to community college students.”

However, in comparison with similar community college students, for-profit students borrowed about $13,300 more for their higher education. “This borrowing most likely reflects the higher tuition at for-profit colleges, which in turn may be driven by the students’ greater access to federal student loans.”

Employers, colleges try German-style job training

Germany’s job training model — a mix of vocational classwork and on-the-job apprenticeships — is catching on in the U.S., reports Jon Marcus for the Hechinger Report.

Students at Indiana’s Ivy Tech community colleges will be able to spend three days a week in class and two working — for pay — at companies such as Industrial Electric.

Ivy Tech plans to add programs in advanced automation and robotics, collaborating with employers who run assembly plants.

Students at Ivy Tech Community College. (Photo: Ivy Tech Community College)

Ivy Tech students practice welding skills. Photo: Ivy Tech Community College
In addition to Indiana, German-style job training programs are in the works in more than a dozen states.

The Obama administration is promoting academic credit for apprenticeships.

However, funding apprenticeships is expensive. “In Germany, employers pay 75 percent of the $19,850 annual cost of each trainee, and the government covers the rest,” writes Marcus. Ivy Tech is trying to get employers to cover the cost for trainees they hire.

Only about 10 percent of American 18- to 22-year-olds get on-the-job training, the OECD reports.

High youth unemployment and a shortage of skilled workers is a problem in Europe too, except for Germany, reports The Economist.

Skills are better than degrees, say workers

When it comes to career advancement, skills training is more important than a college degree, say workers who responded to Glassdoor’s Q2 2014 Employment Confidence Survey.

“While education is still valued as one piece of the puzzle for a successful career, we’re seeing a shift in the workplace,” said Rusty Rueff, a Glassdoor career and workplace expert, reports eCampus News. “Most employees feel gaining the latest skills relevant to their job and industry is more valuable to help advance their careers.”

. . . when asked what’s most important to advance their career and earn a bigger paycheck, more than three in five (63 percent) employees report learning new skills or receiving special training, compared to those who report receiving a college or graduate degree (45 percent), transitioning careers or looking for a new job or company (38 percent), and networking with professionals (34 percent), among other options.

. . .  three in four (74 percent) employees believe their employers value work experience and related skills more than education when evaluating job candidates.

Almost half of college graduates say their specific degree is not very relevant to the job they do today.

However, 56 percent say they’d be more successful in their career with a higher level of education.

“Going back to school may be one way to learn and improve, but there are also non-traditional ways, such as certificate programs, boot camps, webinars, online non-degreed courses, conferences and more,” said Rueff.

Community and technical colleges are seeing more “skill builders,” students who take one or two courses to build marketable job skills but have no interest in earning a degree.

Trained, jobless and in debt

Joe DeGrella of Louisville trained as a cardiology technician but works at AutoZone. Credit: Luke Sharrett for The New York Times

Millions of laid-off Americans have used federal aid to train for new jobs, reports the New York Times. Yet many end up jobless and in debt.

It’s not clear the $3.1 billion Workforce Investment Act (WIA), which was reauthorized last month, improves trainees’ odds of finding a job or their improving their earnings.  The feds don’t keep track.

When Joe DeGrella’s construction company failed, he met with a federally funded counselor, who “provided him with a list of job titles the Labor Department determined to be in high demand,” reports the Times. He chose a college certified to offer job training and received a federal retraining grant.

Two years studying to be a cardiology technician at Daymar College, a for-profit in Louisville, left him with $20,000 in debt and no job. Now 57, he moved into his sister’s basement and works at an AutoZone.

About 21 million jobless people entered retraining at community colleges, vocational and business schools, and four-year universities in 2012.

“The jobs they are being trained for really aren’t better paying,” said Carolyn Heinrich, director of the Center for Health and Social Policy at the University of Texas.

Laid-off workers spend less to take classes at community colleges. However, completion rates low. Defaults are a growing problem.

At Florida Keys Community College, the default rate is 19.4 percent, reports the Times.

The college charges nearly $11,000 for a two-year degree to get a job as a nursing assistant. Median — not starting pay — for a nursing assistant in Florida is less than $26,000 a year.

The updated WIA requires states to “track former students to determine if training helped them find work with sustainable wages,” reports the Times.

. . . In some states, data and academic studies have suggested that a vast majority of the unemployed may have found work without the help of the Workforce Investment Act.

In South Carolina, for example, 75 percent of dislocated workers found jobs without training, compared with 77 percent who found jobs after entering the program, according to state figures.

The Times confuses the student loan program with workforce development,writes Mary Alice McCarthy on EdCentral. Job trainees get grants though many also borrow to pay for college programs.

WIA spends $3 billion a year, the Higher Education Act provide over $150 billion a year in federal grants, loans, and tax credits. “A large share of that money goes to support students earning associate’s degree and occupational certificates,” writes McCarthy.

The government is “a terrible prophet for labor needs down the road,” writes Ed Morrissey on Hot Air.  The WIA should subsidize “employer-based training for jobs that need filling now or in the near future,” ensuring that people are trained for “real jobs.” Even then, taxpayers will end up paying for training that would have occurred anyhow.

Morrissey recalls the classic Tennessee Ernie Ford song:

You pass 16 classes and what do you get?
Another day older and deeper in debt.
Saint Peter don’t you call me, it wouldn’t be cool.
I owe my soul to the vocational school.

CC, for-profit grads look the same to employers

Job seekers are as attractive to employers with a for-profit certificate or degree as with a community college credential, concludes a Calder working paper by five economists.  The study tracked callbacks by employers in response to fictitious resumes.

Applicants with “some college” did little better than those with just a high school diploma. Again, employer responses were similar whether  resumes cited a for-profit or community college.

Resumes were submitted for jobs in administrative assisting, customer service, information technology, sales, medical assisting (excluding nursing) and medical billing, and office work.

Community colleges provide a much better labor market payoff, the study concluded. “It is more expensive to attend for-profit colleges,” Cory Koedel, a University of Missouri economist and one of the co-authors, told Inside Higher Ed. Earning a community college credential provides a better return on investment.

Given the image of for-profit colleges as “greedy diploma mills,” it’s surprising their graduates did so well, responded Stephen R. Porter, a professor of higher education at North Carolina State University. “I was astounded that there was no difference between the groups.”

Job seekers must be prepared for a lot of rejection.

Employers’ overall response rate — meaning a positive, non-perfunctory reply via phone or e-mail — was 11.6 percent for applications that listed community colleges compared to 11.3 percent for those that listed for-profits. Likewise, the split for interview requests was tilted slightly in community colleges’ favor, at 5.3 percent versus 4.7 percent. Those splits fell well within the study’s margin of error.

Employers were even less interested in applicants with “some college.” Given low completion rates, that’s a very large group of people.

What will I earn with a degree?

North Carolina is making it easier for students to predict the dollar value of college degrees, reports AP. A new state web site will provide median earnings, employment and post-degree education by major, degree and campus.

Five years after earning an associate degree in cardiovascular technology, community college graduates average $60,869. Other top-earning degrees are radiation therapy technology, fire protection technology, nuclear medicine technology and clinical trials research associate.

The median income for associate degree graduates in all subjects was $30,345 after five years. (The search function isn’t fully operational for associate degrees and doesn’t work at all for certificates.)

Nuclear engineering graduates average $89,537 a year five years after earning a bachelor’s degree. Theater graduates average $10,400.

“Of course, there are many paths to success. So this is not a recommendation, it’s just a way to arm students and families with good, useful information,” said Peter Hans, who pushed for the project when he was chairman of the University of North Carolina Board of Governors.

Anthony Carnevale, director of Georgetown University’s Center on Education and the Workforce, said North Carolina’s program, inaugurated last week, is one of the best at showing the value of a degree. He expects college instructors to hate it. “They don’t get up every day and think about getting somebody a job. They’re teaching history or something, so this is news to them,” Carnevale said.

All the top-paying degrees are in engineering and technology. assocdegreechart

Maine also has launched a site with earnings information by degree for community college and state university graduates.

College isn’t paying off for most black grads

Black college graduates with a four-year degree are more likely to be unemployed and underemployed than their classmates, reports A College Degree is No Guarantee by the Center for Economic and Policy Research.

In 2013, 12.4 percent of black college graduates between 22 and 27 were unemployed ompared to 5.6 percent of all college graduates in that age range. Furthermore, more than half (55.9 percent) of recent black college graduates who were employed were working in a job that doesn’t require a bachelor’s degree. That compares to 45 percent of all recent graduates.

Fewer underemployed college graduates are finding high-paying, non-college jobs, the study found.

Screen Shot 2014-05-20 at 3.17.37 PM

CREDIT: CEPR

Manufacturers see skills gap


Workers assemble the Chevy Volt electric vehicles and Opel Amperas at the General Motors Detroit Hamtramck Assembly Plant on Oct. 11, 2011, in Hamtramck, Mich.

More than half a million skilled manufacturing jobs remain unfilled due to the labor skills gap in the U.S., according to one estimate.

Many job applicants lack the basic math and computer skills needed to train for high-tech manufacturing jobs, employers complain.

U.S. manufacturing employs more than 12 million workers.  An estimated 600,000 skilled manufacturing jobs are unfilled, according to a 2012 Deloitte study.  That could increase as more baby boomers retire.

“If we can’t fill the skills gap, it’s going to be very difficult to be competitive in the global market,” said Ted Toth, vice president and managing director of manufacturing technologies at Rosenberger-Toth, which manufactures parts for satellites and cellphone towers.

. . . “To understand the skills gap, we have to understand how the public understands manufacturing,” the head of the New Jersey-based company said. “They see it as a dark, dirty, dangerous industry.”

Young people need to be told that manufacturing is a viable alternative to pursuing a bachelor’s degree, said Toth. Employees are “blue tech” workers, he said.  “They utilize technology such as computerized machines and robotics, and also in new and exciting careers in three to four times the minimum wage.”

Business leaders in two western Ohio counties are working to interest high school students in skilled trades jobs. The Auglaize & Mercer County Business Education Alliance is raising money to hire an outreach coordinator who will visit local high schools.

Electrical contractor Jack Buschur wants to find high school graduates interested in training to be electricians. “We have lots of opportunities,” Buschur says. “We’d like to keep our young people in the area and see them make a very good living.”

Bring back shop classes, writes Josh Mandel, Ohio state treasurer, in a Wall Street Journal op-ed.Too many young people have four-year liberal-arts degrees, are thousands in debt and find themselves serving coffee at Starbucks or working part-time at the mall,” he writes. “Many of them would have been better off with a two-year skilled-trade or technical education that provides the skills to secure a well-paying job.”

Gainful employment for all

Gainful employment regulations are baaaaaaaack. The Obama administration will try again to regulate career training programs — primarily at for-profit colleges — that leave students in debt they don’t earn enough to repay. 

The draft “includes standards for debt-to-earnings rates and other language that could generate significant debate,” reports the Washington Post. The Education Department estimates that 9 percent of career training programs could fail to meet the new standards.

The White House push is too narrow, argues Reihan Salam on Reuters.

The Department of Education plans to identify vocational programs that leave their average graduate paying a high share of their earnings in loan payments (8 percent or more of total earnings, 20 percent or more of discretionary earnings) as well as those with a high average loan default rate (of 30 percent or more). Programs that cross these red lines in two out of three years will lose the right to offer their students federal financial aid.

Curbing the abuses of this sector could do some good. But career training programs represent a small subset of the higher education universe. If we take a somewhat wider view, it seems pretty puzzling that, say, business or engineering majors at four-year colleges and universities aren’t being treated as enrollees in vocational programs.

Many recent college graduates are underemployed and unable to pay back student loans, Salam argues. Most thought their degree would lead to a good job.

If the regulation were applied to all of higher education, programs like a bachelor’s degree in journalism from Northwestern University, a law degree from George Washington University Law School and a bachelor’s degree in social work from Virginia Commonwealth University, would all be penalized,” complains Steve Gunderson, president of the Association of Private Sector Colleges and Universities, the for-profits’ trade association.

Why not “protect consumers from the least effective post-secondary programs” in all branches of  higher education?, asks Salam. Whether it’s overpriced paralegal training at a career college or an overpriced bachelor’s in film studies from a private nonprofit college, the borrower is likely to default.