File this under “The Obama Economy”.

Jeanina Jenkins, a 20-year-old high-school graduate from St. Louis, is stuck in a $7.82-an-hour part-time job at McDonald’s Corp. that she calls a “last resort” because nobody would offer her anything better.

Stephen O’Malley, 26, a West Virginia University graduate, wants to put his history degree to use teaching high school. What he’s found instead is a bartender’s job in his home town of Manasquan, New Jersey.

Jenkins and O’Malley are at opposite ends of a dynamic that is pushing those with college degrees down into competition with high-school graduates for low-wage jobs that don’t require college. As this competition has intensified during and after the recession, it’s meant relatively higher unemployment, declining labor market participation and lower wages for those with less education.

The jobless rate of Americans ages 25 to 34 who have only completed high school grew 4.3 percentage points to 10.6 percent in 2013 from 2007, according to Bureau of Labor Statistics data. Unemployment for those in that age group with a college degree rose 1.5 percentage points to 3.7 percent in the same period.

“The underemployment of college graduates affects lesser educated parts of the labor force,” said economist Richard Vedder, director of the Center for College Affordability and Productivity, a not-for-profit research organization in Washington. “Those with high-school diplomas that normally would have no problem getting jobs as bartenders or taxi drivers are sometimes kept from getting the jobs by people with college diplomas,” said Vedder, who is also a Bloomberg View contributor.

Recent college graduates are ending up in more low-wage and part-time positions as it’s become harder to find education-level appropriate jobs, according to a January study by the Federal Reserve Bank of New York.

The share of Americans ages 22 to 27 with at least a bachelor’s degree in jobs that don’t require that level of education was 44 percent in 2012, up from 34 percent in 2001, the study found.

The recent rise in underemployment for college graduates represents a return to the levels of the early 1990s, according to the New York Fed study. The rate rose to 46 percent during the 1990-1991 recession, then declined during the economic expansion that followed as employers hired new graduates to keep pace with technological advances.


 
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