by S.A. Prince
The Economic Policy Institute (EPI) released a mind blowing report this week.
The Class of 2016 Report
In this report, the EPI looked at the high school and college graduates entering the job market (not enrolled in further schooling). There is so much information within the above report that this article alone is not going to do it justice. It is important that you take the 15-20 minutes it will take to read through its statistically laden content.
There are a few stats, and particularly the EPI’s analysis that I’d like to address:
Before I address these stats, there are two definitions you need to know:
Underemployment Rate– Created by adding unemployed workers who are looking for work, to the amount of workers employed part-time but seeking full-time work.
Unemployment Rate– People who are jobless, actively seeking work, and available to take a job; the number of unemployed as a percentage of the labor force (the sum of the employed and unemployed).
- 65.8% of people age 24-29 do not have a college degree
- For college graduates the unemployment rate is 5.6%; the underemployment rate is 12.6%
- For high school graduates the unemployment rate is 17.9%; the underemployment rate is 33.7%
- Young black college graduates have a unemployment rate of 9.4%; this is higher than the peak rate of 9.0% for young white graduates during the recession
- Between 2004 and 2014 there was a 92% increase in the number of student loan borrowers
The EPI suggests two ways for us to fix this problem:
- We should ensure that all workers that want a job can find one.
- “we should raise the minimum wage; make it easier for workers to bargain collectively for higher wages; strengthen and enforce labor standards (for example, we should make more workers eligible for overtime pay and combat wage theft by employers); provide earned sick leave and paid family leave; provide undocumented workers a path to citizenship, which will give these workers (and native workers in similar fields of work) more leverage to command higher pay; and end discriminatory practices that contribute to race and gender inequities.”
What the EPI suggests is unrealistic and highly improbable in a capitalistic society. First they suggest raising the minimum wage. That in itself isn’t bad if you believe in the “minimum wage” theory, suggesting that setting a wage floor promotes wage equality.
I don’t believe in the “minimum wage” theory as it does set a wage floor, and in doing so, lets the government dictate the minimum value of a worker, as oppose to the worker and the employer negotiating minimum value. The minimum wage hurts the entry-level employee who must accept it, especially when you consider it doesn’t automatically increase with inflation.
The EPI also suggests that “we should ensure that all workers that want a job can find one.” They never suggest whether these jobs will come from the public or the private sector, but let’s assume that it’s a mixture of both.
If the government were to guarantee a private sector job for everyone, along with increasing the minimum wage, they’d be putting businesses in a tough position. They’d be telling a business, “Not only are we going to increase your minimum wage, but we are going to force you to take on X amount of employees each year. Yes, you can fire in accordance with your state’s laws, but you will have to maintain this amount of people within your workforce regardless of any other factors.” That’s unfair to businesses, and I would predict that many of them would close their doors or move their operation. I do however agree that the wage disparity between the minimally paid worker and the maximally paid worker is unacceptable.
If the government were to guarantee public sector jobs, then those jobs would have to be funded by the taxpayers. Let’s say that these jobs would all be at the Average Hourly Earnings of $25.43 per hour. That would put an incredible amount of pressure on the taxpayers, especially those making less than that per hour amount. What would incentivize them from leaving their lower-paying private sector job for the guaranteed public one?
The issue pertaining to college graduates and their lack of employment must be viewed at its roots. These roots are parenting and the educational system.
The student who has graduated high school or college has done the minimum required of them. The minimum is not enough anymore, as we live in the age of the exceptional. “There are no more jobs for people who don’t want to think.” Renowned author and marketing guru Seth Godin says this in his book “Linchpin.” For further reading on what it takes to succeed in the new global market economy, I suggest picking up a copy of “Linchpin.”
Continuing on, in a society that is becoming increasingly technological it is odd that the educational system has not evolved with it. Yes, there are more gadgets in the classroom like laptops and I-Pads, but I’m not talking about that. Nearly everything in our society is run by computers, yet schools aren’t teaching computer coding. The jobs of the future, and the ones that are going to be lucrative, will be related in some manner to technology. Learning computer language should be a must.
Much of education also focuses on teaching children to “do” instead of “think.” Doing is helpful when creating a solid foundation, but thinking is connected to innovation and initiative, and both are necessary to be successful in today’s world. The monotonous assembly-line jobs that our parents and grandparents worked are no longer available, and those that still do exist are being phased out. If you work a monotonous job, your employer is looking for an affordable automated process to take over for you. That you still have your monotonous job is likely due to the fact that they’ve yet to find an affordable ersatz.
Parenting also plays a role in the fact that many high school and college graduates can’t find employment. Many of our parents and grandparents worked the aforementioned monotonous jobs. They graduated high school or college and jobs were waiting on them, good jobs. I often hear my grandparents discussing “the good ole days” where they worked at Carrier and Chrysler, often welding or doing some other job that is now not only automated, but being done in another country. They worked that job for 20, 30, or 40 years and retired, still living off their 401K. Let me reiterate, those days are over.
Except those days aren’t over in the minds of our parents and grandparents. Many of them still believe that graduating, more so college than high school, will equate to having access to a quality lifestyle. It doesn’t, but they teach us that it does. That’s why my fellow Millennials rank and file into institutions of higher learning. While our parents and grandparents worked extremely hard to build America, many of them lacked the entrepreneurial spirit required in today’s global economy, not because they didn’t have great ideas, but because they never needed to make use of them to survive.
If we are to economically survive and pass something of value on to the next generation to build upon, my fellow Millennials and I must find and invoke out entrepreneurial spirit. We must build our own sole proprietorships, partnerships and corporations, and do business with one another. Now that the torch has been handed to us we must not ask for government intervention, but forge our own paths through our genius that is within.