Nathaniel Beck is a Political Science Professor at New York University.
More Misleading Unemployment Numbers Quoted By the Media
Wednesday, May 16, 2012 - 02:00 PM
(A version of this article appeared on the political science blog The Monkey Cage)
Last week, On the Media did a story about how the figure of 85% of recent college graduates living at home is based on a more or less made up number. But this is not the only statistic about college graduates routinely cited by the media as a sign of the economic apocalypse. In this article, I take on a number that has more foundation in reality, but, taken out of context, makes it sound like the job situation for recent college graduates is hopeless.
I begin with a quote from Frank Bruni’s New York Times column, of April 19, 2012. After stating that college graduates, in general, have an unemployment rate half that of those with only a high school degree, he goes on to argue:
[this] doesn’t capture the grim reality for recent college graduates, whose leg up on their less educated counterparts isn’t such a sturdy, comely leg at the moment. According to an Associated Press analysis of data from 2011, 53.6 percent of college graduates under the age of 25 were unemployed or, if they were lucky, merely underemployed, which means they were in jobs for which their degrees weren’t necessary. Philosophy majors mull questions no more existential than the proper billowiness of the foamed milk atop a customer’s cappuccino. Anthropology majors contemplate the tribal behavior of the youngsters who shop at the Zara where they peddle skinny jeans.”
Bruni makes two claims: half of recent college graduates are unemployed or underemployed, and that those who fail to major in business, engineering or the sciences will end up only asking if a customer will like fries with that.
Bruni is not alone in citing the 53.6% number and the plight of the poor humanities major. The statistics was the “Stat of the Day” on the Atlantic’s web page of April 23, 2012. And yesterday, Mitt Romney delivered a speech citing this statistic, saying "Half of the kids graduating from college can’t find a job that uses their skills. Half."
The source of this data is an analysis done for the Associated Press and reported in various newspapers. The analysis in the AP story is based on research by Neeta Fogg and Paul Harrington of Drexel University in “Rising Mal-Employment and the Great Recession: The Growing Disconnection between Recent College Graduates and the College Labor Market” which appeared in “Continuing Higher Education Review” (2011, v. 75, pps. 51-65).
Before looking at the report itself, it is only fair to note that another post in The Atlantic by Jordan Weissmann notes that in 2000 the number of unemployed and underemployed college grads were "at a low of 41 percent, before the dot-com bust erased job gains for college graduates in the telecommunications and IT fields.” Obviously an increase from 41% to 54% is hardly trivial, but only Weissmann seems to have provided the comparison which shows that even in boom times, 40% of recent college graduates have troubles in the job market.
Fogg and Harrington define underemployment (which they call mal-employment) as a college graduate not being employed in an occupation “which utilize[s] the skills and knowledge that are commonly thought to be acquired through a college education.” (p. 55-56). While that article does not specify what such occupations are, it does note that the occupations “generally include profession, technical, managerial and high-level sales occupations….” (p. 55). Of course many of these require an advanced degree, so recent college graduates under age 25 are unlikely to be eligible for such occupations.
Is the current recession is this falling off of a cliff, even if a smaller cliff than headlines scream? Fogg and Harrington show a mal-employment rate for college graduates under 25 of 34% in 2000, 34% in 2007 and 39% in 2010. Unemployment was only 4.5% in 2007, so the increase in mal-employment from 2000 to 2010 is not simply a consequence of the current recession. Headlines make the United States look like Spain; the situation is not good, but we are far from Spain.
Are the mal-employed all art history and anthropology majors? Fogg and Harrington’s indicate the cost of being a humanities/liberal arts major may not be as high as Bruni claims. While the chart shows that about one third of humanities/liberal arts majors were mal-employed, about 30% of business/management majors were similarly mal-employed, and (is the glass half full or half empty here?) about 18% of engineering and math and computer science graduates were mal-employed.
Using the same American Community Survey for 2009 and 2010 as Fogg and Harrington, but focusing on actual unemployment by major, Carnevale, Cheat and Strohl (Hard Times, Georgetown University, Center for Education and the Workforce, 2011) have similar findings (p. 7). Recent college graduates with a business major have a 7.4% unemployment rate, those with an arts degree have an 11.1% rate (with social science majors having an 8.9% rate and humanities/liberal arts students having a 9.4% rate). Combining these two studies, it is clear that being an arts major does not guarantee underemployment or unemployment, nor does being a business major totally guard against that.
The current job market is bad for everyone, including recent college graduates (and other youth seeking a first job), and the costs of long term unemployment or underemployment are high. But it is not responsible to tell college students that their lives will be terrible unless they study engineering, and that the career prospects or current college graduates are orders of magnitude worse than a decade ago. Neither of those statements are consistent with current data.