Recent college grads face 36%
'mal-employment' rate
By Tami Luhby @Luhby June 25, 2013: 5:56 AM ET
Not all recent college
grads are putting their degrees to work on their jobs.
NEW YORK (CNNMoney)
More than a third of recent college grads with jobs are working
in positions that don't require a degree.
Economists call that
figure the "mal-employment" rate, and right now it tops 36% for
college-educated workers under the age of 25, according to figures crunched by
Andrew Sum, director of the Center for Labor Market Studies at Northeastern
University.
"People don't go
to college to be a waiter or a bartender," Sum said. "They lose and
we lose." The official unemployment
rate for grads under age 25 was 7% in May, but that doesn't reflect all those
who are under-utilized in one way or another. Nearly 8% of grads are working
part-time, but would like full-time positions. These workers aren't counted in
the mal-employment rate.
Not surprisingly,
hospitality and retail are the most common occupations of the mal-employed. Of
the nearly 3 million recent college grads, 152,000 are working in retail sales
and nearly 100,000 work as waiters, bartenders or in other food service posts.
Another 80,000 serve as clerks or customer service representatives, with 60,000
working in construction or manual labor.
Also, recent grads who
worked in their chosen fields while in school had an easier time landing
college-level jobs, Sum said. Location is important, too. Those living in the
South, Southwest and West had a rougher time because the labor markets are
weaker there.
College grads didn't
always have it this tough. In 2000, the mal-employment rate was less than 28%. But
the Great Recession hit this group hard. Though the economy has improved in the
past three years, those gains haven't yet translated into better job
opportunities for young adults. "Labor demand is still relatively weak,
and you have increased competition for jobs with adults," said Sum, who
thought the situation would have improved by now.
Little help for the
long-term unemployed
Taking a job below
your education level carries a high financial toll. The mal-employed earn up to
40% less per week than their peers, Sum found. That could make it harder for
them to pay off their student loans, move into their own apartments and
even get married.
It can also affect
their earnings for decades, since they enter the wage ladder at a lower rung,
said Carl Van Horn, founding director of the Heldrich Center for Workforce
Development at Rutgers University.
Van Horn asked
Rutgers' career services office how the job market looks right now for the
school's recent grads. They told him that the market has loosened up from last
year, but that many grads are working in positions that don't require degrees.
He expects that to continue.
"Employers are
taking college grads over high-school grads, but paying them high-school grad
wages, he said. 
First Published: June
25, 2013: 5:56 AM ET
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