What Matters for College Students (and Colleges) in this Economy

January 19, 2021

The academic calendar is very different for college students this year, but one thing remains the same: the spring semester is when many will be looking for jobs after graduation and summer internships.

The pandemic has dramatically changed the job outlook for new college graduates. Today’s newsletter summarizes a newly released paper on what the post-pandemic economy might look like for those with freshly minted degrees and how they (and their colleges) can best position themselves for success.

? Academic deans, career services professionals, student life officials: You're invited to join me next Thursday, January 28 at 11 a.m. ET for a virtual event that will explore the evolving labor market and the skills needed to successfully move from higher ed to a job and remain competitive throughout life.

• Expert panel: Handshake’s Christine Y. Cruzvergara, Texas A&M’s Myra Gonzalez, and Southern Company’s Cre'Shannon Reuven.

Sign up here.

? It’s January, so that means I’m booking talks and workshops for the year ahead:

• For high school parent groups and college counselors interested in professional development, I have talks and workshops related to my new book on admissions.
• For college leaders and trustees, there are options for presentations and workshops related to my continuing research on what's next for higher education after the pandemic.

Reach out to learn more.

The Bachelor's Recession

When job postings started to fall off last spring, those that required a college degree declined more than jobs for high-school graduates. That’s one of the findings of Good Jobs in Bad Times, a new paper out last week that I co-authored with Matt Sigelman, the CEO of the labor market analytics firm, Burning Glass Technologies.

What’s happening: New graduates with bachelor’s degree were hit particularly hard by the Covid recession: postings for such degrees fell 40% last spring.

• What’s more, entry-level jobs for those with bachelor’s degrees and little work experience dropped most precipitously.
• As Wharton’s Matthew Bidwell has found (see graphic below), jobs requiring a bachelor’s degree tend not to be open at the entry level. With new college graduates competing with millions of experienced workers who have been sidelined, the pandemic seems to be accelerating this phenomenon further.

Why it matters: If history is any guide, new college graduates could struggle for years.

• Studies have shown that graduating in a recession affects salaries, employment prospects, and even the health and happiness of young adults.
• Previous to the pandemic, 4 in 10 college graduates were underemployed in their first job—meaning they were in jobs that didn’t require their level of education.
• And things didn’t get better for them. Graduating into underemployment meant they were five times more likely to remain stuck in mismatched jobs after five years compared to those who weren’t underemployed.

Context: We’ve been hearing for years that the bachelor’s degree is the new high-school diploma. Early evidence from the pandemic recession is that it could be even worse than a high-school diploma for those graduating from college in the coming years. Previously, when times got tough, colleges and students hunkered down and waited out an economic recession. But this might not be the time to simply stand pat for both groups.

• Students need to lean into their skills development and take not just any job, but jobs that can lead to better roles down the road.
• Meanwhile, colleges need to cultivate greater demand by building fresh degree programs, offering new kinds of credentials, and establishing complementary advising services that can get students into careers.

Bottom line: After the last recession, several colleges got the hint and realized that if students don’t think a college will do enough for them to get hired after graduation, they will look elsewhere. Those colleges have a head start for the next iteration of career services.

• The president of one of those institutions, Denison University, sent me a note over the weekend telling me about Launch Lab. Check out this next generation career-services center which will be open to any student enrolled in a liberal arts college or liberal arts major from the moment they enroll through their fifth reunion.

?In other words, there’s hope if students and colleges follow the right approach.

What is clear is that for learners of all ages breaking into the post-college job market is increasingly about the skills they possess, and less about where they go to school or their specific degree.

• Burning Glass has identified 14 foundational skills (see graphic below) critical to unlocking millions of jobs, even in this economy.
• These skills across a range of domains—digital, human, and business—are the building blocks of successful careers, not only facilitating the first step but also gaining importance over the span of a working life.
• While each skill is valuable on its own, students who develop multiple competencies across skill groups earn significantly more and experience increased job mobility and advancement.

Be smart: The analysis for the paper identified two categories of occupations suitable for those leaving college in the current economic climate.

? Target Occupations:  Professions across a range of majors with solid salaries and where employers continue to hire at the entry level.

• They might not be the first jobs someone thinks of when a student asks, “what can I do with a major in X?” but these jobs do typically require a college degree.
• Target occupations include insurance agents, information security analysts, and clinical laboratory technologists.

?‍♂️  Lifeboat Occupations:  Jobs that typically require less than a bachelor’s degree but allow employees to gain important skills they can use to transition later on to high-paying occupations that require a four-year degree.

• Take, for example, a computer user support specialist. Although the job typically doesn’t require a bachelor’s degree and pays an annual salary of $55,000, the skills developed in the role can eventually lead to a position as a network and computer system administrator making an average of $87,000 yearly.

Bottom line: For both “target occupations” and “lifeboat occupations,” students need to have the right sets of skills to stand out and gain entry in a highly competitive market. Here’s the good news: they still have time to acquire specific skills that can make them stand out in comparison to the competition, especially if forward-thinking career offices help out.

The New Normal Econony

Being ready for the post-pandemic economy means colleges and universities need to step in aggressively to plan for the academic programs that will be the lifeblood of their institution and drive enrollment for the long term.

Four distinct economies are likely to emerge from the crisis that will provide opportunities for institutions to step in to meet learners:

1. The Readiness Economy. To get ready for the next crisis, whether it’s a public health emergency or an environmental one, will require investments in health care, biotech, cybersecurity, green technology, and infrastructure. This, in turn, will spur demand for graduates with the skills to address these vulnerabilities. Biotech hiring, for example, was already up 36% last spring and summer.
2. The Remote Economy. Remote work may be the most influential legacy of the pandemic. The result will be a growing reliance on the data, software, and infrastructure that powers working from anywhere
3. The Logistics Economy. Global supply chains that were interrupted by the virus are already being reimagined. These changes will require new types of logistical support, which is one reason why FedEx Ground and FedEx Logistics plans to 35,000 new employees in the next five years.
4. The Automated Economy. The pandemic is likely to only accelerate the adoption of artificial intelligence, especially in knowledge work—and that may drive demand for graduates in fields like autonomous systems and advanced manufacturing.

Bottom line: Colleges that offer the right mix of academic programs to serve the four emerging economies post-Covid will shore up their financial sustainability, while ensuring students’ career opportunities. In many ways, institutions already have the mix of courses or programs in their catalog; they might just need to reorganize them to match growth areas.

?Read more: Download the paper, Good Jobs in Bad Times, here.

SUPPLEMENTS

At the peak of desegregation in 1988, around 37% of Black students nationally attended schools with a majority of white students. Only 19% did so in 2018, according to a report from The Civil Rights Project at UCLA.

In the last 40 years, a college degree has become the “big dividing line” in US society, as wages for college graduates have increased at a much faster rate than high school graduates. A look at recommendations by the world's top experts on how to rebuild more equitable societies.

Until next time, Cheers — Jeff

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