College grads taking many low-wage jobs

The unskilled see hunt for work get even tougher

WASHINGTON — Jeanina Jenkins, a 20-year-old high school graduate from St. Louis, is stuck in a $7.82-an-hour part-time job at McDonald’s that she calls a “last resort” because nobody would offer her anything better.

Stephen O’Malley, 26, a West Virginia University graduate, wants to put his history degree to use teaching high school. What he’s found instead is a bartender’s job in his home town of Manasquan, N.J.

Jenkins and O’Malley are at opposite ends of a dynamic that is pushing those with college degrees down into competition with high school graduates for low-wage jobs that don’t require college.


As this competition has intensified during and after the recession, it has meant relatively higher unemployment, declining labor market participation, and lower wages for those with less education.

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The jobless rate of Americans ages 25 to 34 who have completed only high school grew 4.3 percentage points to 10.6 percent in 2013 from 2007, according to Bureau of Labor Statistics data. Unemployment for those in that age group with a college degree rose 1.5 percentage points to 3.7 percent in the same period.

‘‘The underemployment of college graduates affects lesser educated parts of the labor force,’’ said economist Richard Vedder, director of the Center for College Affordability and Productivity, a nonprofit research organization in Washington.

‘‘Those with high-school diplomas that normally would have no problem getting jobs as bartenders or taxi drivers are sometimes kept from getting the jobs by people with college diplomas,’’ said Vedder, who is also a Bloomberg View contributor.

Recent college graduates are ending up in more low-wage and part-time positions because it has become harder to find education-level appropriate jobs, according to a January study by the Federal Reserve Bank of New York.


The share of Americans ages 22 to 27 with at least a bachelor’s degree in jobs that don’t require that level of education was 44 percent in 2012, up from 34 percent in 2001, the study found.

Competition can leave less-educated — yet still qualified — individuals with few employment options, said Heidi Shierholz, an economist at the Economic Policy Institute in Washington.

‘‘College graduates might not be in a job that requires a college degree, but they’re more likely to have a job,’’ she said.

Less-educated young adults are then more likely to drop out of the labor market, said Paul Beaudry, an economics professor at the University of British Columbia in Vancouver who studies US employment trends.

The labor participation rate for those ages 25 to 34 with just a high school diploma fell four percentage points to 77.7 percent in 2013 from 2007. For those with a college degree and above, the rate dropped less than 1 percentage point, to 87.7 percent.


‘‘At the complete bottom, we see people picking up the worst types of jobs or completely dropping out,’’ Beaudry said.

‘College graduates might not be in a job that requires a college degree, but they’re more likely to have a job.’

The share of young adults 20 to 24 years old neither in school nor working climbed to 19.4 percent in 2010 from 17.2 percent in 2006.

For those ages 25 to 29, it rose to 21.3 percent from 20 percent in that period, according to a Federal Reserve Bank of Boston report in December.

Those with the least education have trouble securing even the lowest-paid jobs. Isabelle Samain looked for work in Washington from April until September of last year.

As prospective employers continually passed over her applications, the 20-year-old mother of two from Cameroon realized she was missing out because she lacked a US high school diploma.

‘‘I don’t even remember how many places I applied,’’ Samain said of the ‘‘frustrating and discouraging’’ search.

Samain passed the General Educational Development test in December and recently started working at Au Bon Pain in Washington for $8.50 an hour for 36 hours a week.

A yearlong survey that ended in July 2012 of 500,000 Americans ages 19 to 29 showed that 63 percent of those fully employed had a bachelor’s degree, and their most common jobs were merchandise displayers and clothing store and cellular phone sales representatives, according to Seattle-based PayScale Inc., which provides compensation information.

The share of recent college graduates in ‘‘good non-college jobs,’’ those with higher wage-growth potential, such as dental hygienists, has declined since 2000, according to the New York Fed study.

Meanwhile, the portion has grown for those in low-wage jobs paying an average annual wage of below $25,000, including food servers and bartenders.

Yet those with degrees have more opportunity to advance, even in lower-paying fields.

Kimberly Galban, 34, a vice president at One Off Hospitality Group in Chicago, cites her own career as an example.

She got a job as a hostess at Blackbird, a One Off restaurant, while pursuing a bachelor’s degree in Germanic studies and communications at the University of Illinois at Chicago in 1999.