It’s college graduation season where parents’ thoughts turn to: “When will my kid get a job and get off our payroll?” I wrote a book about this a few years ago, and it is just as much of a nightmare now as it was then to figure out what college and degree will get graduates a job so they can take care of themselves.
It is unsettling to confront the reality that virtually no job is secure anymore, as the Trump administration is proving for federal government jobs. At the moment, things appear to be dire as private sector employers hold their collective breath—and also all their hiring—waiting to see once again whether a recession will happen. (I have one of those children whose job offer is placed on hold, and hopefully it’s only temporary.)
But there are some things that are sure bets, right? AI and technology companies certainly are where the future is. Tech jobs pay really well and are still growing, right? Bursting that little bubble is data from the New York Federal Reserve Bank, which has been tracking what happens to recent college graduates for some time now. If we are thinking just about whether they are getting jobs, the recent unemployment rate is a good guide. By that measure, what’s the best job? Nutrition, with an unemployment rate of 0.5%. Construction services is next at 0.7%. Others that are super low are surprising, such as special education and early childhood education majors.
But let’s get to the good stuff: tech. Computer engineering, which is mostly about building computers, has an unemployment rate of… 7.5%. For comparison, fine art majors have an unemployment rate of 7%. Computer science, more likely to focus on software, is at 6.1%. Turns out these graduates are not being snapped up right out of college.
What is going on here? It is important to step back and remember that graduates are entering a labor market that is constantly adjusting and handing trade-offs. To see some of the complications, note that you could always get some job if it doesn’t use your degree. For fine arts majors, about half aren’t really using their degree and are labelled as “under-employed.” For the computer-based grads, that figure is only about 17%, so when they get jobs, it is usually in their field and requires that degree.
Another question is: How well do these jobs pay? When graduates get jobs, the computer-based employees make twice as much as the fine arts grads, and they continue to make more later on.
The reality, though, is that while some students are listening to their parents and majoring in something that will “get them a good job,” nowadays nothing is a sure bet. Consider petroleum engineering majors; they vacillate between getting the highest-paid jobs or facing super-high unemployment, depending on the price of oil when they graduate. The problem for computer-based majors is that employers aren’t hiring generic computer grads and training them to do what they need. They want very specific skills based on their needs right then, something that is difficult to predict more than a year out, and college students pick their majors years in advance. Programming languages, for example, don’t stay hot for long as new ones come along reasonably quickly.
The other problem is that the “supply” adjusts, albeit with a lag, as students chase those hot majors. Data science as a field is booming but so is the supply of data scientists. That makes it harder for those grads to get jobs. Now there is the concern as to what AI will do to programming jobs (so far, not as much as pundits claim).
There are two conclusions here; the first for parents and students. Don’t obsess about finding the right major in high school. If you really want to focus on the high-paying jobs straight out of college, focus on the courses you take in your junior and senior year, just before you graduate, and map those onto the job market.
The second is for all of us citizens. Be very suspect of claims that college is not producing graduates “with the skills we need.” Graduates are really trying, but the problem is employers can’t—and don’t—try to tell them what will be in demand by the time they graduate. Employers who really want a more predictable supply of just-in-time graduates should get close to schools, participate in co-op programs and internships, to guide students along the way. That does require planning and commitment, which seems to be in short supply.
Peter Cappelli
George W. Taylor Professor of Management
Director – Center for Human Resources for the The Wharton School
