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The Secret of Underemployment

• Lowell Matthews

We like stories about people pulling themselves up by their bootstraps. I remember a film from the 80s called The Secret of My Success. In the movie, Michael J. Fox’s character, a recent university graduate, lands an entry level job in finance only to learn that his job is eliminated before he even starts. Then, after a series of interviews and job search misadventures he finally gets a job in the mail room of a large corporation. In the end, thanks to his cleverness and hard work, he gets the girl, the dream job (co-running the corporation with the girl), and a future.

In the real world, we are learning that many college graduates who take the lower-level job remain underemployed in jobs that don’t require a four-year degree. In other words, the mail room job may lead to another mail room job and never to a position further up the career ladder. Call it the secret of underemployment. A study just released by Burning Glass Technologies and the Strada Institute for the Future of Work, The Permanent Detour, sheds a light on both the rate of underemployment and its detrimental effects on worker’s career paths and earnings over time.

For the study, researchers analyzed educational and employment data from over four million resumés and job postings. They found that 43 percent of college graduates in the sample were underemployed in their first job. As the graphic below relates, those starting out underemployed are more likely to stay that way, even after a decade of working.

The Permanent Detour Underemployment's Long-Term Effects Graphic about lower salary.


And, not surprisingly, the underemployed workers earned an average of $10,000 less annually than their appropriately employed peers. (Conversely, of the workers in the sample who started out appropriately employed, 87 percent of remained that way five years later).

The Permanent Detour Underemployment's Long-Term Effects Graphic about lower salary.

Female graduates were found to be even more at risk for ongoing underemployment in the study. Women graduates were significantly more likely to be underemployed following college graduation than their male counterparts (47% to 37%). And almost two thirds of the women in the sample who were initially underemployed remained that way five years later.

In other words, this research says your first job matters a great deal. This is contrary to what many of us have been taught or believed about just getting your foot in the door.

There is one bright spot in the study though—the risk of underemployment in STEM fields was lower, for both men and women. For example, only 3 in 10 computer and information science degree holders held an initial underemployment position following graduation. And five years later that number fell to fewer than 2 in 10 who were still underemployed.

It is for this reason—and many others—that we emphasize computer science and information technology pathway opportunities for all students before they reach college. In general, the report also underscores the need to create stronger and more direct connections between specific degree or career pathways programs and corresponding (i.e., appropriate) job opportunities with state and regional business and industry partners.

There is much more to unpack in the Burning Glass report, and it is just the first in a series that will focus on underemployment and how it may be a permanent detour from success. Hopefully, this will remain a secret no longer and we can continue to work on policies to ensure student success.

About the author

Lowell Matthews

Lowell is the Director of College and Career Pathways for ExcelinEd. He previously served as Staff Director for the Florida Legislature’s Senate Committees on Education Pre-K-12 and Higher Education, where he helped create Florida’s industry certification incentive to create a nexus between education and the workforce. Lowell is a graduate of the University of Michigan and Vanderbilt University Law School. He also served in the U.S. Army. He lives in Rochester, MN with his wife and two kids.