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College grads lose big in this economy

Monday, March 22, 2004

Robert Reich called them "symbolic analysts." They were the college-educated workers supposedly insulated from the global pressures that condemned others with less schooling to job insecurity and layoffs.

"Symbolic analysts are in ever greater demand in a world market that places an increasing value on identifying and solving problems," Reich wrote in 1991.

The message: Get a college education; earn a bachelor's degree or more. That is your immunization against the outsourcing, offshoring and downsizing that frighten so many workers today. The Clinton administration, in which Reich served as secretary of labor, pushed that solution, and so has nearly every politician, policy expert and corporate executive.

Young people listened, all too well. In this recovery, college graduates are losing ground faster than any other group, and that is partly because there are now so many graduates. More than 27 percent of the population has a bachelor's degree normally earned in four years of schooling. That is up from 21.3 percent in 1990 and 17 percent in 1980, according to the Census Bureau, and the proportion is rising by a percentage point or so every couple of years.

From this group come management consultants, lawyers, software and computer engineers, research scientists, corporate executives, financial advisers, strategic planners, advertising executives and television producers. These are Reich's symbolic analysts, and their great contribution is conceptual thinking.

Well, if America's college graduates -- the men and women with the equivalent of a bachelor's degree or more -- are so special and in such demand, why are they suffering in the current job market? No other group has taken the beating they have in the last four years. The percentage of all college graduates 25 and older who hold jobs fell from just over 78 percent in 2000 to just under 76 percent in 2003. That was the lowest level in more than 25 years, according to an analysis of Labor Department data by the Economic Policy Institute, a research group in Washington. And they are joining the rolls of the long-term unemployed at a faster rate than any other group, educated or not.

The 25- to-35-year-olds have been hit the hardest. The portion employed in this group of college graduates dropped from more than 87 percent in 2000 to 84.1 percent late last year. That was also the lowest since the late 1970s, and their average wage has fallen since 2001.

Let's not blow these hardships out of context, however. College graduates are still more likely to have jobs than others, and their wages are notably higher. "In terms of employment, college graduates enjoy a big premium, just not as big as it used to be," said Lawrence Katz, a labor economist at Harvard. "They appear more vulnerable to economic shocks than in the past. And we don't fully understand why."

The bubble economy of the late 1990s contributed to the distress. Companies over-hired the college educated, particularly in high-technology areas.

Demographics play a role. College graduates are being hired. But only 2.5 college grads are landing jobs for every 3.5 getting degrees, and so the ratio of employment to population falls.

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