College grads – How does one define underemployed?

psu graphicThe graphic to the right caught my attention at the Penn State Collegian website a couple of weeks back. The article was titled “Report: Half of college graduates overqualified for current job.” That kind of title is sure to gather the attention of the students on any major college campus.

The data is credited to the Bureau of Labor Statistics in the graphic. However the source is a report by the Center for College Affordability and Productivity and are provided in their recent report “Why Are Recent College Graduates Underemployed? University Enrollments and Labor-Market Realities.”

The thrust of that report is that a large number of college graduates are working at jobs that do not require the education that they have so diligently worked to attain. And in the view of the Center for College Affordability and Productivity spent too much money to get.

In reality the numbers in the report are derived by the Center for College Affordability and Productivity based on Bureau of Labor Statistics (BLS) data and the centers definition of underemployment. The BLS does defines underemployment very different manner. Thus it is inappropriate to attribute the measures of underemployment in the Center for College Affordability and Productivity report to the BLS.

A rule in statistical analysis is that when claims are made that seem a bit extreme one should look very carefully at how the concepts are defined and measured. A favored tactic is to define the concept in a way than makes the number advantages to the cause being advocated. In this case consideration of how “underemployed” is derived from the BLS data is key to understanding the claims made in the center’s report.

The center used information from BLS to determine if a degree was required for a specific occupation. The authors used what BLS states as the entry level educational requirements for the occupation. For registered nurses this is an Associates Degree. This is a very conservative approach as then by the centers methodology any registered nurse who enters the field with a BS degree or later attains a BS degree is considered underemployed. This reflects a stagnant view of the labor force which says that employers do not value additional learning or training once someone a been hired. It also ignores the fact that while employers may well hire someone with a associates degree they would prefer the more advance degree. In the nursing profession BS degrees have given for well over 40 years. In the state of California over 60 percent of the 309,000 registered nurses have a BS or higher degree (American Community Survey Data, US Census Bureau, 2011 public use file calculation.) Be clear, the authors of the report are claiming that those 202,000 nurses are underemployed. It is this type of definition that results in their large estimates of underemployed in this country. They then use these inflated numbers to make their case on the value or lack there of a college education.

The Center for College Affordability and Productivity world view is very different than that most of the rest of the country. Teachers in our high schools systems usually must have a college degree. To enter the field in many jurisdictions it is not necessary to have a teaching certificate. However to be retained by the school district the individual must earn the teaching certificate within some period of time. Once having done that they are then required to take continuing education courses. Under the model of used by the center, the teaching certificate is not required to enter the profession, thus the teachers who have obtained one are now underemployed. If they go on to earn a master degree later, that are also underemployed. This same logic can be applied to just about any profession. I do not think that this is a world view that we wish to embrace. It ignores the continuing education environment that now exist in the working world.

It is upon this foundation of sand that the center built their house of straw.

There are other problems with the report. The most obvious is using data in the midst of the recession to measure their concept. A student who graduates with a 3.5 GPA, but cannot find a job in his field, not because of his or her lack of skill or training, but due to the recession who then takes a temporary job until he can find one in his profession is by the centers measures underemployed. They have placed the blame on the education variable when the blame is more properly placed on the recession. The student who goes onto graduate school but takes a part time job as a local bartender to pay for her education is considered underemployed. Every job I held while I worked my way through college years ago did not require a high school diploma. Was I underemployed. No, I was making money to pay for that college education.

A model that describes underemployment as the center has measured the term is fatally flawed. Such a concept must take into consideration the dynamics of the labor market and the dynamics of the employment situation. There are multiple ways to enter any profession. Taking the lowest common denominator and claiming that all others are underemployed is not a good measure. Taking the entry level requirements and applying that to all employees at any time in their career is not a good measure.

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