The college-educated barista stereotype may be a thing of the past.
The Great Recession led to many graduates working at jobs that didn’t require a degree, but economic recovery and some working experience has moved them up through the workforce, according to Fox Business.
A new analysis on underemployment from the New York Federal Reserve discovered that “many of those who started their careers in a low-skilled service job transitioned to a better job after gaining some experience in the labor market.”
“Although many recent college graduates are ‘underemployed’—working in jobs that typically don’t require a degree—our research indicates that only a small fraction worked in a low-skilled service job in the years following the Great Recession,” economists Jasion Abel and Richard Deitz writes.
Millennials who graduated during the recession can earn lower wages that harm their earnings potential for decades, but at least they’re starting to see better economic returns. That’s good for skill developing, and larger earnings will help pay down debt, buy a house, or accumulate more savings.
Underemployment wasn’t always so bad, though. About 40 percent of underemployed graduates ages 22 to 27 worked in sales, public safety, as managers and supervisors, and in information processing and business support between 2009 and 2013. A college degree wasn’t necessary, but workers earned an average wage of $50,000. About 20 percent of underemployed graduates worked in low-skilled service jobs, which was roughly 9 percent of all recent graduates.
Even when graduates find themselves underemployed, they don’t end up as low-skilled workers. Their jobs required skills and talent that they gained from college.
As more people graduate with a degree, graduates don’t stand out as much as they used to. Graduates do better than non-graduates, but for some, a degree isn’t a quick path to a good job. A few years as a barista or salesperson might be necessary to build up skills before they can advance. As those graduates aged, the number of those in low-skilled service jobs halved.
With the economy recovering, underemployment isn’t such a big concern. “Underemployment appears to be temporary for many young graduates, part of an expected transition from school to the labor market,” Abel and Deitz note.
That’s good news for millennials, and good news for economic productivity.
