When Barack Obama first became president four years ago, he set a goal to increase the nation's college graduation rate to 60 percent by 2020. The idea of working towards becoming a nation of college graduates, however, has a major problem according to a new report by the Center for College Affordability & Productivity.
There are not enough jobs that require a college degree.
Analyzing 2010 data from the U.S. Department of Labor, the report finds that of the 41.7 million working college graduates, barely half (51.9 percent) are working in jobs that require a bachelor's degree or higher. Thirty-seven percent are in jobs that require a high-school diploma or less. The rest (11.1 percent) are in jobs that require some postsecondary training such as an associate's degree.
In other words, there are 13 million college graduates working in jobs that don't require a bachelor's degree or more.
The problem was driven home for the report's lead author, economist Richard Vedder, when he needed some yard work done. "One day I had some guy cut down a tree," he says. "He had a master's degree in history."
So Vedder, the senior author of the report and director of CCAP, says he started to research the phenomenon of underemployed graduates — eventually leading to the report.
Number of graduates soars
It wasn't always this way. In 2010 the proportion of adults with degrees was 30 percent. This is five times higher than six decades ago. In the 50s or 60s the percentage of college graduates was in the single digits.
"When I started teaching in the (1960s) going to college was still a somewhat unusual, slightly elitist thing to do," says Vedder, who is a Distinguished Professor of Economics Emeritus at Ohio University. "Almost all graduates got a pretty good job. Even graduates in middle-quality state schools always got jobs."
While the number of college graduates has soared, the jobs that require that expertise hasn't — forcing an increasing number of graduates to take jobs that historically didn't require a lot of education.
It turns out, for example, that 15.4 percent of taxi drivers have college degrees, 12.9 percent of parking lot attendants have at least a bachelor's degree and 24.6 percent of retail sales people have at least a bachelor's degree.
Other studies (such as one at Georgetown University) have shown the earnings premium of college degrees. College graduates simply earn more than those who have just a high school diploma. This increase in potential income is seen to justify the expense of spending money on getting a degree.
The CCAP's report, however, says that although many benefit economically from going to college, there are still many that do not achieve those gains. Employers simply do not need as many college graduates as the colleges are cranking out.
The study says this "over-credentialing" of the population may also mean that society may be "over-investing" in higher education instead of looking at alternatives such as vocational training.
"Can you predict ahead of time if going to college is a good idea for someone?" Vedder says. "Yes, for a good number of people."
For example, if young people are average or below average in their grades, Vedder recommends trying perhaps a community college first. If they flourish, they may wish then to transfer to a four-year institution.
"We need to be more nuanced and be careful when we say whether it is a good thing for a kid to go to college," he says.
Report co-author Jonathan Robe, a research fellow at CCAP, also says individually it can make sense to get a degree. "The report may seem a little dismal," he says, "but we can't say college is worthless. If you have to distinguish yourself in the job market, the best way is a college degree."
The CCAP report estimates underemployment is likely to continue — projecting that the number of Americans with bachelor's degrees will grow more than 31 percent in the current decade. This is more than double the 14 percent growth expected in jobs requiring at least a bachelor's degree.
"We can't create overnight the jobs (for all the graduates) — not that many fancy nice upper-middle-class jobs will be available in the economy in the immediate future," Vedder says. "We can't have 50 to 70 percent of the working population be college graduates and expect them all to earn above-average incomes. That is mathematically impossible. This is something we have never faced before."
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