The U.S. economy would seem to be on a good footing based on an unemployment rate of 3.7%, which represents the lowest figure since December 1969. In addition, there were 7 million job openings as of September 30, 2018, and “only” 6.8 million officially unemployed. However, there seems to be a trend, developed during the last decade or so, in which Corporate America is requiring a college degree for jobs that have historically not needed one.
According to Joseph Fuller, Forbes, this “degree inflation,” was predicated “on the belief that these college-educated employees would be smarter, more productive, and more engaged than workers without a degree.” But, only about one-third of the US adult population has attained a four-year college degree. According to Mr. Fuller, “the result is a misalignment between supply and demand for these kinds of jobs.”
Furthermore, studies have shown that these degree-holders doing jobs that would ordinarily only require a high school degree are not performing at a higher level. Worse, they tend to be less engaged and have higher turnover rates. By requiring a college degree, companies are holding back many working-Americans from achieving a career path to a better standard of living.
Thinking that the only way to achieve future success is to attain a college degree, many high school graduates are going to college and incurring massive educational expenses when the job that they ultimately occupy didn’t need a degree at all. There is a correlation to the tremendous expansion in the use of student loans ($1.5 trillion in debt) that we’ve witnessed since 2006.
Today, we have more than 40 million Americans with student loans and those outstanding balances have more than doubled to roughly $34,900 per student in just the last 12 years. Worse, we now have more than 11.5% of outstanding student loan debt that is 90-days or more dilinquent.
The great recession is likely to blame for this unfortunate trend, as recent college graduates during that time were happy to get any job so that they could actually begin to repay their student loan debt. Taking any job, especially one in which you are over-qualified, keeps others out of the workforce and wage growth lower than we should be witnessing with these levels of unemployment.
Lastly, the impact from these trends has forced many younger Americans to remain at home with relatives. We have the greatest percentage of 18-34 year-olds living at home or with other family than we’ve ever had. This has a profound impact on the economy. This trend will only be reversed if Corporate America would once again require only a high school degree for jobs that have historically only needed one.