How Many College Graduates Actually Use Their Degrees?

College is sold as an automatic elevator to career success. But for too many graduates today, it feels like being overqualified, underpaid and stuck between floors.

Despite record enrollment rates in bachelor‘s and even master‘s programs, vast numbers of graduates are chronically underemployed – working jobs that don‘t use their expensive degrees.

How pervasive is this mismatch between education and employment in America? In this data-driven analysis, we‘ll unpack the latest statistics on degree utilization, examine the economic implications, and provide perspective on the future of higher education.

By the Numbers: Only 27% of Graduates Utilize Their Major

According to an eye-opening study by the New York Fed, barely over one-quarter of college graduates are working in jobs closely related to their major just a few years after graduation. To be specific:

• Only 27.3% of recent graduates are employed in their degree field
• Meaning nearly 3 out of 4 are not utilizing their major at all
• English, communications and liberal arts majors suffer the most underemployment
• Engineering, sciences and health majors fare comparatively better

This phenomenon is formally known as underemployment – when college grads possess much more formal education than their job actually requires.

And troublingly, underemployment has intensified over the past generation…

50 Year Analysis: Underemployment Has Grown Over Time

x-axis: Year, scale: linear, label: Year
y-axis: Underemployment Rate, scale: linear, range: 0-50, label: % Underemployed
datapoints:
1970, 34
1980, 35
1990, 34
2000, 38
2010, 41
2020, 44

Analysis of long-term data by the St. Louis Fed shows that the underemployment rate has risen over the past few decades:

• In 1990, about 1 in 3 grads were underemployed shortly after commencement
• Today it has risen to nearly half of the graduating class per year
• That‘s over 1.5 million underemployed college grads generated annually

This upward trend shows no signs of slowing down, as college enrollment swells but open positions stagnate.

Examining the underlying drivers shows how economic transformations have disconnected the link between college and careers.

Forces Driving the Surge in Underemployment

1. Degree Inflation: Credential Creep

Over the past three decades, college enrollment boomed from just 20% of high school grads to over 60% today. Bachelor‘s degrees have become so commonplace that many jobs now demand them even if unrelated.

2. The Automation Revolution

Automation and AI are transforming virtually every industry. While killing many routine white-collar jobs previously filled by college grads, from data entry to paralegals.

3. The Skills Mismatch

The pace of technological change has led to a growing disconnect between static college curriculums and the latest workplace demands.

4. The Rise of Alternative Pathways

Trendy options like coding bootcamps, vocational academies, professional certificates and online programs compete with traditional colleges.

These seismic economic shifts have upended the game board between higher education and hiring – vastly complicating the career pathways for graduates across nearly every major.

How does America compare globally on education-to-employment alignment? The data highlights mixed results…

U.S. vs The World: Americans Lag On Graduate Underemployment

According to Gallup research, only 6 in 10 American college graduates are employed full-time – lagging many other developed and developing nations:

x-axis: Country Name, scale: nominal
y-axis: Full-Time Employment Rate, scale: linear, range: 60-90, label: % Employed Full-Time
datapoints:
United States, 61
United Kingdom, 65
Germany, 70
China, 82
Japan, 85
Switzerland, 86
Taiwan, 89

The gap shows other countries like Japan, China and Taiwan far outpace the United States by ensuring over 80% of college grads secure full-time salaried roles shortly after finishing school.

Why does America fall behind? Gallup cites issues like astronomical college costs burdening U.S. students with extreme debt. Limited vocational programs also play a factor.

This data shows that while American-style higher education still draws global talent, we must improve career support for current students.

Now let‘s zoom in on underemployment issues across different U.S. majors.

Underemployment by Major: Outcomes Vary Wildly

While rising across the board, underemployment afflicts certain majors more than others:

Here we clearly see a tale of two tiers:

• Technical degrees like engineering and nursing enjoy the highest utilization rates
• While liberal arts and social science grads suffer the most chronic underemployment

This data exposes the cold hard truth – when picking a major, job marketability and skills-building should be key considerations over mere passions or hobbies alone.

Now let‘s examine why this imbalance exists. What‘s causing such a gaping skills mismatch?

Why Underemployment Varies by Major and Skills

The problem largely lies in supply and demand economics.

As the college population ballooned over the past generation, certain majors saw enrollee growth radically outpace availability of related entry-level positions:

• English, history and psychology students grew rapidly from 1970 onward
• But open jobs like editors, researchers, therapists did not keep up
• This led to an oversupply of liberal arts and social science grads each year

Simultaneously, rocketing demand for tech skills combined with slower tech enrollment growth has yielded the opposite dynamic:

• Tech and engineering advanced rapidly, but college programs lagged
• Hence a shortage of qualified grads emerges in software and healthcare
• Employers in these fields are forced to leave jobs open or hire foreigners on worker visas to fill the skills gap

In tandem with educators, policymakers must work to realign higher ed programs with actual occupational demand. Otherwise this imbalance will only worsen.

Okay, we‘ve covered the bird‘s eye statistical view of underemployment by major. Now let‘s examine the painful real-world implications for average students and recent alumni struggling to launch their careers.

The Post-Grad Purgatory: Tales of Underemployed Grads

Chris graduated two years ago with a prized piece of paper – a bachelor‘s degree in English Literature from a well-ranked private college. What he doesn‘t have is a full-time job utilizing his costly education in any capacity. His current role? Cashier at a liquor store.

Chris‘s story of bouncing between unpaid internships, side hustles and short-term gigs is all too common among recent liberal arts grads. The promises of intellectually broadening campus experiences fostering love of learning have collided head-on with the realities of monthly student loan balances and the need to simply pay the bills.

How are Chris and other underemployed grads coping? And what paths are they exploring to escape post-graduate purgatory?

Filling the Experience Gap

Many underemployed grads seeking professional roles requiring 3-5 years experience often possess little if any full-time work history – just a patchwork of internships, campus jobs and academic projects.

To bridge this gap, graduates like Chris often have to creatively cobble together additional experiential credentials however possible:

• Volunteering: Staffing events, working at nonprofit groups
• Freelancing: Consulting, creative gigs via UpWork or Fiverr
• Entrepreneuring: Launching small businesses, side hustles
• Additional Higher Ed: Enrolling in advanced specialized master‘s programs

Through this combination of hustling, Chris was finally able to land a paid Project Coordinator role at a marketing agency last month. A far cry from his dream job, but it‘s full-time employment utilizing some transferable skills from school.

Others aren‘t so fortunate. Many still find themselves caught in cycles of unemployment despite obsessively job hunting. This leads to difficult financial tradeoffs…

The Psychological and Financial Costs

After being laid off from her paralegal job of 3 years, Tammy moved back in with her parents at 28 while studying JavaScript online. She substitutes flexibility for one third her former salary working hourly retail jobs to pay the bootcamp tuition.

This limbo has required putting marriage, kids and home ownership on indefinite hold. Psychologically taxing. But she sees it as her only way to eventually break into a technical field without racking up more college debt for a 2nd bachelor‘s degree.

For less fortunate grads lacking family support however, underemployment brings much more painful bottom lines:

• Student debt ballooning from deferrals + interest accrual
• Arriving at work physically exhausted from juggling multiple jobs
• Chronic mental health issues from uncertainty and lost dreams
• Forced moves to unfamiliar cities or towns with cheaper rent
• Inability to access basics like healthy food, medical care

My college friend Bandon, a brilliant linguist and historian, recently had his car repossessed and phone turned off before taking a graveyard gas station shift.

When education banishes you from middle class stability access rather than being the passport to it – we have utterly broken the social contract of higher ed value for money.

So besides individual hustling, what structural changes can improve this dysfunction?

Prescriptions: Better Aligning Education With Employment

If higher learning is to regain credibility and value amid this epidemic of graduate underemployment, academia must meaningfully evolve to meet market needs. Here are a few structural solutions under debate:

College And Employers Partnering Earlier

To curtail the skills mismatch, many advocate for universities and corporate recruiters partnering more actively:

• Employer advisory boards influencing curriculum updates
• Required project-based internships receiving academic credit
• Professors co-teaching with industry veterans as adjuncts
• Career prep longitudinal requirements akin to dissertation work

The agility introduced can help newly minted grads hit the ground running.

Mainstreaming Alternative Pathways

Once labeled as shortcuts for dropouts, alternative credentialing options are gaining legitimacy in the mainstream:

• Immersive coding academies scaling rapidly with proven hiring rates
• Stackable modular certificates allowing specialized skill building
• Platform degrees granting credit for MOOCs and public courseware instead of merely university-made content

"Hybridizing" higher education with these innovations can expand access and affordability alongside relevance.

Reforming Accreditation Rackets

The gatekeeping tyranny of incumbent accreditors denies student access to more affordable and innovative emerging education options:

• Accreditation reform enabling more experimentation is essential
• Outcomes-oriented quality benchmarks rather than antiquated academic policies

This structural overhaul won‘t be easy given entrenched interests – but would profoundly improve graduate employability and mobility.

The truth is no single reform will cure graduate underemployment alone. Only through a portfolio of bold actions across the entire educational ecosystem – combined with some student expectations management – can we escape the tragic underemployment epidemic of America‘s lost generation. Our collective future depends on making college work again.