Blogs:

Have you heard of the law of diminishing marginal returns? Walk into any of our country’s economic class and you will certainly hear of this. This law says that any goods or service can reach a point where another additional product can greatly reduce the value and offer smaller benefits. This is what is exactly happening with our college graduates according to a CCAP study that presents empirical evidence towards this.

This study shows that with increased college graduate production, the returns are fast diminishing. According to data published by the Bureau of Labor Statistics, a number of college graduates today remain unemployed or employed in lower level jobs. This issue of under employment shows that many students end up with jobs after completing their graduation which they could have got even as a high school dropout.

Since the year 1967, the proportion of adults with college degrees in our country has almost tripled. As the number of college graduates started exceeding the available employment, predictably, people were forced to opt for lower skilled employment.

According to a 2008 data, an estimated 17.4 million college graduates in America are working in jobs that do not actually require a bachelor’s degree. It is evident that by supporting the higher education, not much benefit is enjoyed by the American taxpayers.

Though there is no consistent annual data available and there are many other limitations to it, the fact still remains that there is great saturation of graduates with no corresponding job opportunities here.

Some opine that the recent recession can be the reason for greater rate of underemployment prevailing today. Of course, it is definitely true that the recession has had a huge impact on the labor market. However, the current upward trend in college graduates began well after the 2008 recession. It could be much higher today than what it was in the year 2008.

An interesting fact to be noted is that there was no dramatic increase in under employment rate during the previous recessions of 1973-75 and 1981-82. This shows that labor market contractions due to recession are not the sole reasons for underemployment numbers. Of course, not every college graduate faces this depressing situation and diminishing returns are not setting in for every one of them.

According to data, economic benefits that usually come along with college education are not exactly reaped by marginal graduates.  Students go to great lengths and take on a huge burden of loan to go through college. Considering the huge financial investment they make to obtain their degrees, it seems they will be more comfortable if they simply skipped college and found productive employment.

It is definitely not dishonorable choosing to work in jobs that do not require a college degree. In fact, it is much better than being saddled with a low level job and a huge loan. A below average sociology graduate is worse off than a plumber who provides necessary service to the society.
Maybe we can just divert resources to productive alternatives and not make graduation such a big deal.