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Limited prospects

Finding a job proves a tough course for college grads

When the Brockton nonprofit she worked for lost funding and cut her hours, Katie Deane moved to New York City in February 2003 in search of full-time work. She's still looking.

Deane holds an advanced degree in health and human services management from Brandeis University, but she's had to resort to temping, waitressing, babysitting, and other part-time jobs to pay her bills.

"I have networked, cold-called, and sent mass mailings," said Deane, 26. "I will take anything -- interesting or not -- as long as I can have a decent salary and health insurance. I know the economy is tough, but I think something else is happening for people in my age bracket."

Deane may be right. She is among 11.1 million US college graduates between 25 and 35 years old. Among this group, the rate of employment was lower in 2003 than at any other period since the economic downturn of 1979, when 84.9 percent held jobs, reports the Economic Policy Institute, a liberal research group in Washington, D.C.

The exception: new graduates. Their unemployment rate fell to 2.9 percent in February, from 3.0 percent, according to the US Bureau of Labor Statistics.

For degreed job seekers 25 and older, however, the push to find viable work is tougher than ever because the sectors that are more likely to employ them, such as telecommunications, finance, educational services and high technology were hard hit by the recession.

That's certainly true in Massachusetts, which continues to shed those jobs even as the national economy shows signs of recovery, said Denis McSweeney, New England commissioner of the Bureau of Labor Statistics. The state lost 9,500 jobs last month, the biggest decline since February 2003, when employers eliminated 16,100 jobs, according to the state's Division of Unemployment Assistance.

McSweeney reports that among the business sectors in the state that employ large numbers of college graduates, the most dramatic job losses occurred in the information sector. In 2004, for example, the number of jobs in that sector stood at 88,800, down from 116,400 in 2001, representing a drop of 23.7 percent.

"For college graduates, there is no doubt about it," said McSweeney. "Their situation has deteriorated over the last few years."

Another reason for their job hunting difficulties: There are more college graduates in the US workforce than ever. "We have doubled the share of college-educated workers, including those with advanced degrees, from 14.6 percent in 1973 to 29.1 percent in 2003," said Jared Bernstein, senior economist at EPI. "At the same time, productivity growth received an added boost from the improved education and experience of our workforce."

EPI's findings suggest a college education no longer guarantees success in a labor market where 39.9 million workers have degrees. In 2003, for example, the percentage of employed college graduates aged 25 to 35 was 84.3 percent, down from 87.4 percent in 2000, EPI reported. For those workers, real hourly wages fell by 2 percent over a two-year period, from $22.45 in 2001 to $21.99 in 2003.

For all college graduates, including those 36 years-old and up, the number who were jobless for six months or more has quadrupled since 2001, reports EPI. Specialists attribute the problem to employers' reluctance to invest in expensive labor and competition from skilled workers abroad, including the offshoring of white-collar jobs.

"There are many reasons why we are having difficulty creating enough jobs for these folks," said Mark Zandi, chief economist and founder of Economy.com. "There is now a global labor market for all workers, low skilled and high skilled. Secondly, employers are reluctant to step up and hire workers who require not only wages, salaries, and bonuses, but also benefits such as healthcare and pensions. If they hire a highly educated and skilled individual now, will they be able to still use that person down the road?"

At the same time, the nation's productivity rate increased by more than 3 percent last year, say economists. They predict gross domestic product will increase by 4 to 5 percent in 2004. GDP measures the value of goods and services produced.

Martin Regalia, chief economist at the US Chamber of Commerce in Washington, D.C., points to other signs of economic growth, including increases in real household wealth and the resurgence on Wall Street.

For jobless workers, however, such news raises a question: "If economic growth is up, why aren't jobs?" It's a concern that's bound to be an issue in an election year. The AFL-CIO, for example, is sponsoring a nationwide bus tour called "Show Us the Jobs" featuring 51 unemployed workers from each state who will tell their stories. The tour across the Rust Belt is timed to counter the Bush administration's ongoing efforts to spread the news about economic expansion.

Regalia agreed the percentage of unemployed college graduates is probably higher today than two years ago, but said the quality of labor has improved so firms don't need as many highly skilled workers to meet their goals.

"This is why firms are not going right out and hiring a bunch of people," he said. "The other part of it is that much of the unemployment this time around is structural. People are being laid off and they are sitting on the sidelines until they learn how to make lawn mowers or tractors or, in an extreme case, go back to school."

Michael J. Greis, 45, of Needham, is back in school, pursuing an MS degree in finance at Boston College. He also holds degrees in molecular biophysics and biochemistry from Yale University. When a stint as corporate relations director for a local university didn't work out, Greis left in early 2002, certain he'd land full-time work. It hasn't happened.

Greis hopes an advanced degree will give him an edge in the job hunt. When not in school, he volunteers at a cable television station in Needham. He also relies on paid consulting assignments to help meet expenses. And Gries is a member of a networking group of unemployed professionals called WeWantWork-Boston.

While Greis understands the value of education, he wonders whether future technological advances will make some jobs obsolete before workers can realize a return on their investment in retraining.

"Some of the jobs that are being destroyed today required several years of education to do them," he said. "But if they are being destroyed faster than you can possibly train for them, how can anybody in the workforce keep up? And who will pay the bills while you are getting this education? In all the discussion about jobs and training, no one has looked at that."

Diane E. Lewis can be reached at dlewis@globe.com.

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