Commentary: New Fed Study Shows Impact of Not Considering Employment Prospects When Choosing A Major
The Federal Reserve Bank of New York says recent college graduates in the U.S. face a more challenging job market, causing them to remain unemployed or take lower paying jobs than their counterparts in the past two decades. Elvina Nawaguna of Reuters wrote a good article on the report (Jobs become more elusive for recent U.S. college grads), but here are the key points from the study that jumped out at me:
· Graduates with technical skills or who serve growing parts of the U.S. economy fared better i.e. Healthcare workers had an unemployment rate of around 3 percent.
· Problems facing new graduates are compounded because they often graduate with a mountain of debt. The average student owes $29,400.
· The underemployment rate for recent graduates is 44 percent because recent graduates end up taking low-paying jobs or jobs that don't require a college degree such as bartenders, waiters or retail clerks.
The consequences of not being employed upon graduation make the task of choosing a major all that more critical. Young people today will either graduate with a great advantage - a good education and a good job - or they will graduate with a great disadvantage - years of debt that will limit their future life choices.
I'm always struck with how differently many international students approach their education and employment: They want a solid education (no matter how hard it is) that leads to a good job that affords them the lifestyle to do what they enjoy in their free time (travel, hobbies etc.). Too often, the U.S. students I talk to want to study something they enjoy that isn't too hard without any consideration of the consequences that decision will have on their employment prospects upon graduation. This report should serve as a good reminder of how costly the latter approach can be in these tough economic times.