Where the Jobs Aren’t

The news isn’t good for recent college graduates.

The sheer number of kids in their 20s moving back in with mom and dad isn’t just anecdotal; going back to the class of 2006, half of them—half!—don’t have jobs.

Here’s Quentin Fottrell in SmartMoney.com:

Only a half of those who graduated since 2006 are now employed full time, according to a recent Rutgers University survey.  More college graduates are settling for jobs that in years past would have gone to those without degrees, while people in their 30s are now occupying jobs once taken by recent graduates….

If all the young people who’ve already given up looking for jobs are included—the 1.7 million people aged 18-29 who’ve been out of work for more than a year—the latest 8.2% unemployment figure would be closer to 16.8% for that age group…That’s the highest unemployment rate for that age group since World War II…

Not to mention the huge debt load many of them must repay.

Copyright: olly/Shutterstock.

And it’s not only recent college grads. A stunning article in The Washington Post over the weekend showed that even older graduates who followed the practical path and went into the hard sciences are struggling years after they got their PhDs.

“There are too many laboratory scientists for too few jobs,” wrote Brian Vastag, who noted that President Obama “has made science education a priority”:

Although jobs in some high-tech areas, especially computer and petroleum engineering, seem to be booming, the market is much tighter for lab-bound scientists—those seeking new discoveries in biology, chemistry and medicine.

Part of this is sheer supply and demand: “The supply of scientists has grown far faster than the number of academic positions,” Verstag wrote, as a government-backed research boom in the early 2000s petered out while “the number of new PhDs in the medical and life sciences boomed, nearly doubling from 2003 to 2007…”

I’m sure the government-is-causing-all-the-problems crowd is nodding their heads now. But it’s not just the government’s fault; a massive restructuring of the drug industry also is to blame:

The pharmaceutical industry once was a haven for biologists and chemists…But a decade of slash-and-burn mergers; stagnating profit; exporting of jobs to India, China and Europe; and declining investment in research and development have dramatically shrunk the U.S. drug industry, with research positions taking heavy hits….Since 2000, U.S. drug firms have slashed 300,000 jobs…

Copyright: Cartoonresource/Shutterstock.

These people didn’t major in art history, philosophy, or the silly media courses that have proliferated at second-rate universities; they went into science, biology and chemistry, and worked hard to get the advanced degrees they thought would open the door to good, rewarding careers.

Some of this is cyclical, of course. The Arab oil embargo and Iranian hostage crisis of the 1970s drove up oil prices and spurred a boom in students studying petroleum engineering. When oil prices plunged in the 1980s, they were out of luck.

And there may be some breakthrough in biotechnology or medicine that changes everything. But does anyone expect big drug companies to hire hundreds of thousands of researchers again in the United States? No, they’re likely to need fewer extra people and pay them less in labs overseas.

Free market capitalism has been a great boon to mankind. Alternatives like socialism and communism have been catastrophes.

But no human institution is perfect, and in the Great Recession millions of people—not just the unskilled or laid-off construction and factory workers—have experienced capitalism’s downside. The system just isn’t working the way it used to for too many, and neither presidential candidate has proposed workable ways to fix it.

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2 Responses to Where the Jobs Aren’t

  1. John Wright July 16, 2012 at 2:53 pm #

    I was the only native English speaker, and probably the oldest as well, on a recent phone conference with people in Malaysia, China, Hong Kong and Singapore about a manufacturing problem.

    Probably most of the attendees were college graduates, but of foreign universities, and they could converse in Cantonese and English(fortunately for me).

    Just as much of America has replaced American manufactured goods with imported goods, I believe multi-national corporations are substituting globally available human capital (foreign college graduates) for American graduates.

    And a debt free foreign graduate will find a lower paid job more attractive than an American with a high college debt load will.

    I don’t know of any solution as the USA could simply be entering the age of the global wage equalization, in which wages, subject to various frictional effects such as language/cultural barriers, time zones, transportation costs, tariffs, local laws, and tax policy, equalize around the world.

    This does not augur well for a high priced American college education unless it leads to a high paid job obtained through connections established at the school.

    I wonder if eventually families will start to invest globally in college education either by
    1. sending their children overseas for a less expensive and globally focused education.
    2. sending their children to less expensive public schools and allocating the spare funds they would have invested in an expensive university to sponsoring several overseas students education that will be obligated to pay back this investment.

    If option 2 is realistic, someone will probably develop a spin on a REIT = Foreign Student Investment Trust = FSIT.

    • HowardRGold July 16, 2012 at 5:58 pm #

      Interesting idea, John, but the opposite is also happening: Chinese students are coming to US universities–not always the top-tier ones–in order to get American degrees which often give them more opportunities at home. They pay full freight and are often subsidized by parents and grandparents who can devote all their resources to the one child in the family.

      Interesting world, no?

      Thanks for reading and commenting,
      HG

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