Mal-employment on the rise
You’ve heard of unemployment and underemployment. Now say hello to “mal-employment,” when college graduates with limited job prospects are forced to take work that doesn’t require a college degree.
According to new research from Andrew Sum, a professor of economics and the director of the Center for Labor Market Studies at Northeastern University, the problem is skyrocketing among recent graduates. Was all that tuition money a waste? And what can college grads who find themselves “malemployed” do to keep moving forward?
1. Mal-employment is an epidemic
In 2000, about 30% of 20- to 24-year-olds were working in jobs that did not require college degrees. By 2010, that percentage had risen drastically to almost 40%, according to Sum’s research. At the beginning of this year, there were twice as many four-year college graduates working as waiters and bartenders as engineers.
2. It’s not about self-esteem—it’s about salary
The problem isn’t that precious college graduates have to get their hands dirty. Rather, the issue is that people who paid for a college education aren’t getting the expected return on that investment—and might never get it. Right now, malemployed college graduates are earning about 35% less than their peers with jobs requiring degrees, such as engineers and computer professionals, according to Sum.
3. Meanwhile, twenty-somethings are struggling to get out of debt
The average college student these days graduates with more than $4,000 in credit card debt and $24,000 in student loan debt. A 2009 Fidelity survey of workers age 22 to 33 reported that they have an average of more than three credit cards, 20% carry a balance of more than $10,000, and 25% believe they will never be free of credit card debt in their lifetimes. It’s hard to pay back that kind of money on a cashier’s salary.
4. What can young people do?
My #1 tip is to live at home for a while after graduation to save money. These days, it’s totally normal, and nothing to be ashamed of: One recent survey found that 85% of those graduating last spring planned to move back home, up from 67% in 2006. Even when you get a job, stay at home as long as you realistically can. Money that would have been spent on rent could be saved, or used to pay off credit cards and student loans. Meanwhile, position yourself to move onward and upward as soon as possible: Take on special projects at work, volunteer in your preferred field, and network as much as you can. Remember: It’s better to be malemployed than unemployed.
5. What about parents?
Parents whose twenty-something kids are malemployed and back at home can follow a few guidelines to help everyone stay sane. First, don’t sacrifice too much: Adult children living at home should contribute to the household, either by paying token rent or doing substantial chores. Talk with them about the basics of financial planning, and introduce them to a budgeting site like mint.com. If you can afford to help financially, spring for health insurance rather than covering car loans or credit-card bills. At the end of the day, you just need stay positive and supportive: Most kids will eventually find their way, but in this economy it doesn’t come easy.
Do you know anyone who’s mal-employed? What issues is he/she facing?
This post originally appeared on TheTakeaway.org.