Graduate Oversupply, Mismatched Degrees, and Employer Greed Collide with the “American Dream”

Workforce Magazine’s recent article by Faye Hansen, “Recruiters Still Court College Grads but Signing Fewer New Hires”, is, to say the least, a real eye-opener.  While it’s not uncommon for us to see things happening around us, such as emerging trends in hiring and slow-brewing shifts in talent market psychology, finding so much reinforcing data in one central source is highly unusual.  In fact, CERI’s survey touches upon so many societal and generational undercurrents that it’s difficult finding a place to begin. The following represents my best effort –

Key Data Point #1: 1.85 Million workers with bachelor’s degrees or higher are unemployed.  1.5 Million new undergraduates will receive their degree this year and enter the workforce.  These numbers “reflect a long-term trend toward producing more college graduates than labor markets can absorb.”

Insight: The American Dream, as we once knew it, may have officially evaporated.  Paraphrased best by Robert Kiyosaki’s ‘Poor Dad‘, the dream may be more irrelevant today than any time in our country’s history — “Study hard, earn a degree, and get a good job.”  I ask myself what may happen at the point Gen-Y becomes self-aware; aware that what they’ve been taught to believe their whole lives may have been wrong.  Seeing the cup as half-full, perhaps we will experience an explosion in entrepreneurialism.  Perhaps.

Key Data Point #2: In 2006, U.S. Colleges produced ~83k new graduates in the visual and performing arts, but only ~67k in engineering.  36 Percent of surveyed employers plan to hire engineering majors, while only 6 percent are looking for liberal arts or humanities graduates and only 5 percent looking for social science majors, “which are among the most popular majors.”  Such phenomenon further “represents an equally long-standing mismatch in the fields of study students pursue and the skill sets employers require.”

Insight: This immediately brings to mind a 2005 article, “Can America Compete?“, written by Geoffrey Colvin of Fortune Magazine.  He notes that within the engineering degrees, we are graduating 5 times less than India and 9 times less than China.  Obviously, there is the population disparity . . . however consider the statistics that in 2006, we experienced a greater number of performing arts graduates than engineering graduates.  This is a problem – a big problem.  As we did during the late 1950s, we must make science and math cool again.  Sure, we’re not racing the USSR to the moon, but I’m in agreement with Colin Powell that we need to start applying ourselves again.

Key Data Point #3: 29 Percent of surveyed employers indicate shifting their hiring in favor of new college graduates over experienced workers “primarily because of costs.”

Insight: Above all data points in the article, this is the one that left me with the worst taste in my mouth.  And not because I don’t get it – as a ‘numbers guy’ with a natural inclination toward financial analysis, I do.  I’m also aware that globalization lends to a normalization of the world’s wealth distribution and quality-of-life, of which a natural consequence is a leveling declination of our own (as the U.S. has consistently been noted as a society of overabundance.)  Speaking from a point of the Global Economy, these are good things . . . yet it hurts to say this, as I envision experienced employees with higher education denied employment over the fresh graduate for mere cost concerns.

Yes, despite my penchant for the financials, this is a crude vision of which I have a very hard time swallowing.  In addition, my gut tells me that if HR is going to focus purely on reducing initial salary offers, there will be a point of diminishing returns, and it will not be subtle.  It will be distinct.