New College Grads Not Doomed to Life as Baristas After All

Working through college by taking a job at Starbucks is one way to avoid student debt — the company covers undergraduate tuition for most employees.

But media stories about a lack of good job openings sometimes suggest that many recent college students have few options better than becoming a full-time barista.

Fortunately, new research out of the Federal Reserve Bank of New York concludes that working in a low-skill job after college is not as common as stereotypes suggest.

Researchers Jaison R. Abel and Richard Deitz explain in a blog post published this week that the college-educated barista is more myth than reality:

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. …

Further, our analysis suggests 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.

The researchers used data from the U.S. Census Bureau’s American Community Survey from 2009 to 2013 to analyze the types of jobs held by underemployed recent college grads (defined as those ages 22 to 27 who have at least a bachelor’s degree) after the Great Recession.

They found that roughly 45 percent of those graduates worked in a “noncollege job.” The study authors defined a “college job” as one where “at least 50 percent of the workers in that job indicated that at least a bachelor’s degree is necessary.”

Looking specifically at the 45 percent of underemployed recent college grads who worked noncollege jobs after the recession, the researchers found:

• The largest share (25 percent) worked jobs in the office and administrative support category, which paid an average annual wage of $37,207.
• Nearly half worked in relatively high-paying jobs, with more than 10 percent in the information processing and business support category, more than 10 percent in the managers and supervisors category, and more than 10 percent in the sales category — all of which paid an average annual wage of about $52,000 to $59,000.
• 19.3 percent worked jobs in the low-skilled service category, which includes waiters and waitresses, cashiers, bartenders, cooks and baristas, and paid an average annual wage of $23,584.

What’s your take on underemployment among recent college grads? Share your thoughts below or on Facebook.