“This year’s college graduates are entering the worst job market since the Great Depression”: Burning Glass CEO
Matt Sigelman Burning Glass Technologies CEO joins the Yahoo Finance Live panel to discuss the crisis of unemployed college graduates.
Video Transcript
AKIKO FUJITA: Well, the jobs outlook especially dire for new college graduates. That could have far reaching implications beyond this year. According to data out from Burning Glass Technologies, those who graduate into unemployment are five times more likely to remain stuck in mismatched jobs after five years compared to those who graduate during normal times. Let's bring in Matt Siegelman. He is the CEO of Burning Glass Technologies.
Matt, it feels like certainly after the financial crisis, there was a lot of talk of these students who are graduating into huge uncertainty and how much that set them back because they couldn't find a job. They went back to grad school that increased the student debt level. I mean, is there a real fear here of a repeat on that front?
MATT SIGELMAN: There certainly is. This year's college graduates are entering the worst job market since the Great Depression. You know, the headlines we just heard are that about usually less educated workers who are losing their jobs. That's certainly where most of the job losses have been, but what college graduates are seeing is a dramatic loss of opportunity. At the peak of the pandemic back in May, job postings for entry-level college graduates fell 45% just from March more than for any other level of education, and in fact, that still hasn't recovered.
Job openings for those with or without a college degree are actually back up to pre-pandemic levels. For college graduates, that's still down 20%, about a 1/2 a million fewer jobs for college graduates today than we saw pre-pandemic. And Akiko, you're exactly right.
What we've learned from past recessions is that those who start out underemployed tend to stay-- stay on the sidelines throughout their careers. Even before the pandemic, even when the job market was red hot, we found that 43% of college graduates were winding up in jobs that didn't require their degree. And those who start out in jobs, like a barista or other kinds of jobs that you didn't need to go to college to get, turns out that those people, 3/4 of them, are still underemployed 10 years out.
ZACK GUZMAN: Yeah, Matt, any time you kind of compare to the depression, you're going to catch some attention here. Just to look back at what happened during, you know, the financial collapse in '08 and '09, how would you compare this generation of college grads to those that came out then, because that's probably the more recent example to point back to, and we know that those Americans, college grads back then in that crisis also had a tough time getting back into the jobs that they wanted?
MATT SIGELMAN: Well, that's right. They had a tough time. I think what's different today is this. The silver lining of the very dark cloud of the Great Recession is that it changed perceptions of education. And I think today's generation of college students are asking tougher questions, are putting more focus up front into questions of what they need to learn, what kind of careers are open to them, and not just trusting that the college education is the rising tide that floats all boats.
Skills matter when it comes to what you do when you graduate, and even this pandemic is no different. Even a lot of this is going to come down to what kind of career you're targeting. Even as, for example, entry level marketing jobs are down 40% year over year. Jobs that are not that far away from that is e-commerce analysts are up 46%. Lab techs are up 26%. So there are opportunities that are growing in this economy.
In fact, we've recently been looking at the kind of jobs that are growing the fastest, various emerging economies that we think are going to define the post-COVID job market, and we think they will combine create about 18 million jobs in fields like readiness, logistics, the green economy, going to grow twice as fast as other parts of the economy and come to represent one in six jobs within the next five years.
AKIKO FUJITA: Matt, the other alternative for students or graduates who can't find jobs is to go back to school. And I've heard a number of students say, look, I've always wanted to go to law school. I've always wanted to go to grad school. Why not do it now? Of course, that comes with more debt being piled on.
And I wonder how you look at that calculation right now. If you were a graduate, let's say, looking for a job for the last year. You decide to go to grad school. You take on more debt. What's the setback years down the line?
MATT SIGELMAN: So I think there's a couple of costs here beyond the significant cost of tuition, the opportunity cost of not being in the job market, but I think, you know, let's call it like it is. If you would ask people a year or two ago, they would have said, law school is dead. MBA programs are dead. There's a huge decline in enrollments in a lot of programs. A lot of MBA programs closed.
So I think grass is always greener. I think the key thing to bear in mind here is this. The same things that will make graduates successful coming out of college are key to making sure that you're going to be successful if you do decide to go and get a graduate degree, an MBA, a law degree, or whatever it may be, and that's that you need to be very focused on what are the opportunities that I'm going to target. Afterwards, how do I make sure I'm acquiring the skills along the way that are going to land me a good job at the end.
ZACK GUZMAN: That's very interesting, and obviously, a very tough position for a lot of these college grads to be in right now. Our hope is that things do get better quickly for them. Matt Sigelman, Burning Glass Technology CEO, appreciate you coming on here to join us today.
