BFT656 Portrait of Store Clerk in Gourmet Food Shop teenager teen jobs unemployment people; business; food; 18-19; year; old; th
Alamy
By Katherine Peralta

Jeanina Jenkins, a 20-year-old from St. Louis, is stuck in a $7.82-an-hour part-time job at McDonald's that she calls a "last resort" because nobody would offer her anything better. "To work somewhere else, you need more than just a high school diploma," said Jenkins, who had to drop out of nursing school to help support her family. "I'm afraid for my career because I'm not in school anymore."

Stephen O'Malley, 26, wants to use his master's in history from the University of West Virginia to teach high school. What he's found instead is a bartender's job in his home town of Manasquan, N.J.

Jenkins and O'Malley are at opposite ends of a dynamic that is pushing those with college degrees down into competition with high-school graduates for low-wage jobs that don't require college. As this competition has intensified during and after the recession, it's meant relatively higher unemployment, declining labor market participation and lower wages for those with less education.

The jobless rate of Americans ages 25 to 34 who have only completed high school grew 4.3 percentage points to 10.6 percent in 2013 from 2007, according to Bureau of Labor Statistics data. Unemployment for those in that age group with a college degree rose 1.5 percentage points to 3.7 percent in the same period.

"The underemployment of college graduates affects lesser educated parts of the labor force," said economist Richard Vedder, director of the Center for College Affordability and Productivity, a nonprofit research organization in Washington. "Those with high-school diplomas that normally would have no problem getting jobs as bartenders or taxi drivers are sometimes kept from getting the jobs by people with college diplomas."

'Structural Change in the Labor Market' Is a Possibility

Recent college graduates are ending up in more low-wage and part-time positions as it's become harder to find education-level appropriate jobs, according to a January study by the Federal Reserve Bank of New York. The share of Americans ages 22 to 27 with at least a bachelor's degree in jobs that don't require that level of education was 44 percent in 2012, up from 34 percent in 2001, the study found.

The recent rise in underemployment for college graduates represents a return to the levels of the early 1990s, according to the study.
The rate rose to 46 percent during the 1990-1991 recession, then declined during the economic expansion that followed as employers hired new graduates to keep pace with technological advances. The researchers said it isn't clear whether two decades of increasing underemployment for recent graduates "represent a structural change in the labor market, or if they are a consequence of the two recessions and jobless recoveries in the first decade of the 2000s."

Competition can leave less-educated -- yet still qualified -- individuals with few employment options, said Heidi Shierholz, economist at the Economic Policy Institute in Washington. "College graduates might not be in a job that requires a college degree, but they're more likely to have a job," she said.

Less-educated young adults are then more likely to drop out of the labor market, said Paul Beaudry, an economics professor at the University of British Columbia who studies U.S. employment trends. The labor participation rate for those ages 25 to 34 with just a high school diploma fell four percentage points to 77.7 percent in 2013 from 2007. For those with a college degree and above, the rate dropped less than 1 percentage point, to 87.7 percent. "At the complete bottom, we see people picking up the worst types of jobs or completely dropping out," Beaudry said.

Without a High School Diploma, a Frustrating Career Search

The share of young adults 20 to 24 years old neither in school nor working climbed to 19.4 percent in 2010 from 17.2 percent in 2006. For those ages 25 to 29, it rose to 21.3 percent from 20 percent in that period, according to a Federal Reserve Bank of Boston report in December.

Those with the least education have trouble securing even the lowest-paid jobs. Isabelle Samain looked for work in Washington from April until September of last year. As prospective employers continually passed over her applications, the 20-year-old mother of two from Cameroon realized she was missing out because she lacked a U.S. high-school diploma. She cited a "frustrating and discouraging" search until she passed the General Educational Development test in December. She recently started working at Au Bon Pain in Washington for $8.50 an hour for 36 hours a week.

A year-long survey ending in July 2012 of 500,000 Americans ages 19 to 29 showed that 63 percent of those fully employed had a bachelor's degree, and their most common jobs were merchandise displayers, clothing-store and cellular phone sales representatives, according to PayScale, which provides compensation information. As the number of college graduates outweighs the availability of education-appropriate jobs and they take whatever they can get, everyone else is pushed down the ladder, said Katie Bardaro, PayScale's lead economist and analytics manager. "There's not really a lower-level job they can move into since they were already in a low-level job," she said.

The share of recent college graduates in "good non-college jobs," those with higher wage-growth potential, such as dental hygienists, has declined since 2000, according to the New York Fed study. Meanwhile, the portion has grown for those in low-wage jobs paying an average wage of below $25,000, including food servers and bartenders.

Wage Disparity Continues to Grow

The education-wage disparity has grown since 1979, when high school graduates were paid 77 percent of what college graduates made; today they make about 62 percent, according to a study by Pew Research Center released last month. College graduates ages 25 to 32 working full-time now earn on average $17,500 more annually, adjusted for inflation, than those with just a high-school diploma. In 1979, it was $9,690 more.

Twenty-two percent of those ages 25 to 32 with only a high school diploma live in poverty, compared with 6 percent of today's college-educated young adults, according to the Pew study. Only 7 percent of those in that age group with just a high school diploma lived in poverty in 1979, compared with 3 percent of college graduates.

Those in the U.S. in the top one-fourth of income distribution have an 85 percent chance of going to college, compared with 8 percent for those in the lowest quarter, said Peter Henry, dean of the Stern School of Business at New York University, told Bloomberg TV.

Advancement Opportunities in the Restaurant Business

Tthose with college degrees have more opportunity to advance even in lower-paying fields. Kimberly Galban, 34, vice president of operations at the One Off Hospitality Group in Chicago, cites her career as an example.

She got a job as a hostess at Blackbird, a One Off restaurant, while pursuing a bachelor's degree in Germanic studies and communications at the University of Illinois at Chicago in 1999. "The formality of classes, papers and grades did lend a hand in where I am today because I had a broader sense of cultures, interactions and interpersonal skills," said Galban, now also a partner at Nico Osteria, one of seven restaurants managed by One Off.

Of the company's more than 700 employees, more than 60 percent hold college degrees, yet fewer than 10 positions require a degree, she said. "We would rather have somebody who is passionate, knowledgeable about their craft and really hospitable than somebody who walks in and says 'hey I have a master's degree,'" Galban said. "But the funny thing is, the majority of our servers, bartenders and people who work in the corporate office do carry either a master's or Ph.D."


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28 Comments

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mingthemercilessone

I am not going to weep any tears for your generation having to start out in low-paying jobs because you dropped out of school "to help your family". You could have helped your family a lot better and more lucratively by staying in school. That "help your family" ploy was used back in my day by families who didn't want to lose control over their children's lives or didn't want their children to achieve more than they did.

Furthermore, the Baby Boomers faced just such an economic fact of life once the leading edge of them crashed into the job market. I had friends with PhD's in history who were driving taxi cabs in NYC to make ends meet.

So, stay in school. Major in something that will be worthwhile in the job market. If your penchant is history, you're going to need a PhD or you'll spend your days flipping burgers and wrapping up burritos.

March 08 2014 at 4:17 AM Report abuse -3 rate up rate down Reply
wbearl

The company I last worked for had a contract with GE, so we had GE engineers under foot all the time. Those engineers started at a lower wage than our janitorial staff. GE fired 1/4 of their staff every year and hired new people. The people fired are usually young engineers that are due a raise and/or a promotion, they then hire new college kids at little better than minimum wage. But remember the President of GE is a friend of Obama and chairs Obama's Jobs Board.

March 08 2014 at 1:59 AM Report abuse +2 rate up rate down Reply
rivers360

This event of low paying jobs seems a dirty secrete that Obama won't face. WallStreet loks great, but it is in-part due to so many people out of work (government reporting of unemployment is understandted times 3). Emplyorers have the pick of the crop and can offer low wages, which makes DOW and other Wall Street indicators look great, and have been great.

This is the reverse of what Obama wished (low paying pay for highly qualified individuals, so NOW obama is beating his "raise minimum wage drum".

No faith in Obama in me. Was a bit once early on, now....get him out of office, and out of country if possible.

March 07 2014 at 11:33 PM Report abuse +2 rate up rate down Reply
eeverettm

Majoring in liberal arts, humanism...isn't going to get you anything. Get a trade!

March 07 2014 at 2:29 PM Report abuse +6 rate up rate down Reply
2 replies to eeverettm's comment
foubabou

You're exactly right. I didn't have the money for college, parents willing to foot the bill and going deep into debt on the belief that someday I'd have enough income to pay it off wasn't in style so after a few years of slipping around I went in the Army.

7 years later I got out as a Warrant Officer flying helicopters, 4 years solid experience in mid mgmt, no debt, pretty decent salary, GI Bill, strong resume, had traveled Europe (Octoberfest '76, what a week?) and was ready to take on the world at 26 years old. A skill that has allowed me to work around the world in some pretty interesting places doing some very interesting things.


Here I sit 36 years later sipping cafe at a local pastelaria semi retired (still do a little consulting) moved to the EU 6+ years ago. Mostly ride the Harley around searching for long lost forgotten castles along the frontier. Still smile when remembering an elderly relative a few years ago wondering how much I could have done with my life if only I had gone to college.

With all the opportunities in the world it is a little hard for me to muster much sympathy for someone that took thousands in easy education loans for an unmarketable degree when they could have been learning a skill. Now they are upset because they believe the govt (or parents) owe them a college education, the nation owes them a job of their liking and the world owes them a successful life.

March 08 2014 at 5:19 AM Report abuse +3 rate up rate down Reply
jj2301

Yep. Too many are afraid to get their hands dirty, whether they have an education or not.

My father has a PhD and was a professor. The grad students that impressed him weren't so much the ones that were brilliant, but the ones who weren't afraid to jump in, get their hands dirty and solve problems. I used to watch him interact with them and he'd always remark "That kid's going places". He was right. The world needs hard workers and problem solvers, not master theoreticians that sit in coffee houses and discuss the next entitlement that's going to lift the human race out of its current funk.

As my wife loves to say: You can't teach attitude and it pretty much trumps everything else.

March 08 2014 at 10:49 AM Report abuse rate up rate down Reply
viewer

Can't even afford to ride the bus but its ok cause price of computers and houses are down (oh, I forgot---gov't told banks no risky loans, so no mortgage for house or condo.) And tax my puny pay for gramps SS and medicare but none left for me in 30 years.

March 07 2014 at 2:46 AM Report abuse +3 rate up rate down Reply
AL CONFER

For far to many years, the thinking was to have everyone to go to college and look at the degrees some of these people come out with...Some are nothing more than advanced basket weaving and nothing more..Its tim that peope in this country get back into the trades, and forego, college degrees that are worthless...Of course we would have to retrain the mindset in America and these young people had better realize that the jobs are where you actually have to get your hands dirty...

March 07 2014 at 2:24 AM Report abuse +3 rate up rate down Reply
1 reply to AL CONFER's comment
jj2301

That's the rub. These people come out of school, expecting a six-figure salary, bennies and a BMW waiting at their new townhouse. They're unpleasantly surprised to find out that everything mommy and daddy told them is BS. They're not special; rainbows and puppies don't emanate from their posterior.

In the immortal words of my father: Congratulations on your degree. Now, it gets really hard.

March 07 2014 at 1:15 PM Report abuse +3 rate up rate down Reply
viewer

Even if you find a job, $$$ has been devalued---can't afford to buy anything, including food, gas, cable, cell phone---nuttin!

March 07 2014 at 1:44 AM Report abuse +4 rate up rate down Reply
1 reply to viewer's comment
foubabou

Hogwash. Money still buys stuff. If you have a marketable skill, you can find a job. One company in my industry has 185 full time fully benefitted openings available today. (I just checked their website.) Most starting salaries are in the 50K-60K range with many a week on/week off schedule around the US.

If'n you can't buy food, gas, cable and cell phone on that something is wrong with your budgeting.

March 08 2014 at 11:31 AM Report abuse +1 rate up rate down Reply
viewer

Outlaw and high-tax cigs but legalize pot.

March 07 2014 at 1:38 AM Report abuse +3 rate up rate down Reply
charlie4562r

The decline of our capitalist system will occur when the government runs out of other peoples money to spend! The redistributionist's will have nothing left to redistribute!!

March 07 2014 at 1:01 AM Report abuse +8 rate up rate down Reply
Garfield Whittak

jacobsgold, your child is just plain lucky....such accomplishment cannot be expected millions of times over (because the economy just can't produce so many opportunities given a lack of resources). Eventually, given rising income inequality and poverty, even your child will suffer from the organic decline of the capitalist system as it succumbs to the burden of increasing debt!

March 07 2014 at 12:29 AM Report abuse +1 rate up rate down Reply
1 reply to Garfield Whittak's comment
foubabou

Ah, yes, luck. Where preparation and opportunity collide.

March 08 2014 at 5:26 AM Report abuse rate up rate down Reply
1 reply to foubabou's comment
jj2301

Amen! We make our own "luck", for the most part.

March 08 2014 at 10:51 AM Report abuse rate up rate down