People with more education tend to have lower unemployment rates than those with less education. The jobless rate for workers with a BA degree or higher was only 3.8% in March versus 11.1% for those with less than a high school diploma and 7.6% for those with a diploma, but no college.
The bad news is that higher education may be losing its value as a sure way to get a job, especially a good one. That’s because too many people are going to college and majoring in subjects that may not meet the requirements of the available jobs. So there may be an excess supply of highly educated people who aren’t qualified to fill the job openings.
In March, there were 49.2 million people in the labor force with a BA degree or higher. That’s up 20.4 million in the past 20 years. Over the same period, the number with some college or an associate degree rose 9.2 million to 37.2 million in March. While the unemployment rates for college educated workers are relatively low, their jobless rates currently remain relatively high at this late stage of the business cycle.
Just as troubling is that many of the people coming out of college may be taking jobs requiring relatively low skills. If so, then they are inadvertently boosting the unemployment rates for people with less education. People with college degrees may be crowding out those with high school degrees in the labor market. The former college students are increasingly saddled with debts to pay for their education and are especially anxious to get a job, any job to make their loan payments. Of course, quite a few are simply defaulting on their loans.
Today's Morning Briefing: Why No Jolt in JOLTS? (1) JOLTS showing fewer job gains than official tally. (2) Help is wanted. So why aren’t hires rising faster? (3) Maybe job seekers aren’t qualified for the jobs. (4) Could more job openings cause unemployed to stop looking? (5) Fed’s doves won’t be happy if jobless rate falls on shrinking labor force. (6) Average duration of unemployment remains too high. (7) A degree will still get you a job, but maybe not one that requires a degree. (8) College degrees crowding out high school diplomas? (9) Analysts spent Q1 cutting earnings estimates across the board. (10) Fiscal Cliff deal could boost earnings. (More for subscribers.)