What High Youth Unemployment Means For Our Economy
Written by Chris Lewis
More than a quarter million American college graduates worked for minimum wage last year—that’s 70 percent more than ten years ago. We can all agree that’s a sign of an unhealthy economy.
But what kind of unhealthy? Is degreed underemployment just a product of the Great Recession, or does it reflect more fundamental economic problems?
In a recent paper, economists Paul Beaudry, David A. Green, and Benjamin M. Sand argue that there has been a “great reversal” in the demand for skilled labor. That is, fewer employers need to hire employees with college degrees. The Daily Beast’s Megan McArdle suggested that the findings mean “A BA is now a ticket to a job in a coffee shop.”
Ominously, the reversal began well before the recession started.
“Many researchers have documented a strong, ongoing increase in the demand for skills in the decades leading up to 2000,” the researchers wrote. “In this paper, we document a decline in that demand in the years since 2000, even as the supply of high education workers continues to grow.”
So does that mean we’re headed for an education surplus? Are those college-educated minimum-wagers here to stay?
It’s too early to tell, according to Dean Baker, co-director of the Center for Economic and Policy Research.
“I do think we will need more college grads,” Baker told Campus Progress. “The question is: do we need them at the same rate we’re producing them? And that’s just much less clear.”
To find out for sure, though, we’ll have to bring the economy back to full employment.
“Let’s assume the economy does recover five, six years out,” Baker said. “I think we’ll see a lot of college grads working at jobs that would not ordinarily require college degrees.”
However, that doesn’t necessarily mean they’ll be working for minimum wage. Even if it’s not a requirement for the job, employers will likely still be willing to shell out for the skill set and credentials provided by a college degree.
But, once the economy has recovered, if college-educated Americans still find themselves in dead-end jobs, there might be a political gain in their economic pain. As The Roosevelt Institute’s Dorian Warren said recently:
“The Millennials who are more privileged and get to boomerang are finally starting to feel and realize just a sliver…of what these groups of poor black and brown kids are experiencing, and that does open up possibilities for alliance and solidarity.”
This post was originally published by Campus Progress.
Photo: Kymberly Janisch/flickr