Steve Hine, Research Director DEED’s Labor Market Information Office December 8, 2014 N ORTH S TAR S UMMIT Mapping Economic Prosperity for Minnesota

These are tough times for too many recent college graduates Many are not finding suitable employment and are earning low wages ( school year) Award Number of Graduates Grads With Reported Wages 1 Year Out Median Hourly Wage 1 Year Out Median Hourly Wage 2 Years Out Certificates (less than 4 years)11,2557,629$14.57$15.30 Associate Degree21,05015,045$15.01$16.35 Bachelor Degree31,69819,966$16.86$19.30 Graduate Degree14,5968,893$29.75$31.48 All Awards78,67551,585$17.05$18.85 The wage rate needed to provide a minimal standard of living to a partnered couple with one child and one full-time worker is $19.37 per hour, but the majority of the jobs held by recent grads are not full-time, and they wouldn’t support a family if they were

Less than half of working grads have full-time permanent jobs Award Annual Median Earnings of All Employed Graduates in 2 nd year after graduation Percent working full- time and year-round in 2nd Year Median Earnings of Full-time Employed in 2nd Year Certificates (less than 4 years)$22,62335%$36,001 Associate Degree$24,48037%$37,772 Bachelor's Degree$30,13043%$41,497 Graduate Degree$52,40351%$64,419 All Awards$29,83142%$42,942 The annual equivalent of that livable wage for a married couple with one child is $40,290, so the 42% of all grads and the 43% of bachelor grads with a permanent full-time job are just making it two years after graduation. Those with less than a BA are still not, even when employed full-time.

Employment and projected growth by major occupational group ranked by size, with current median wage Big differences in growth rate don’t cause big changes in composition $ $ $ 9.07 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 13.83

As a consequence, many college grads are working in these occupations Occupation Number with 4 years of college or more Share of total with 4 years or more Retail Salespersons 20, % Secretaries and Administrative Assistants 14, % Childcare Workers 8, % Nursing, Psychiatric, and Home Health Aides 8, % Cashiers 6,3337.4% Personal Care Aides 6, % Waiters and Waitresses 6, % Recreation and Fitness Workers 3, % Janitors and Cleaners 3,4765.1% Grounds Maintenance Workers 3, % Construction Laborers 3,2679.6% Receptionists and Information Clerks 3, % Stock Clerks and Order Fillers 2,5206.2% Data Entry Keyers 2, % File Clerks 1, % Bartenders 1, % Billing and Posting Clerks 1, % Maids and housekeeping cleaners 1,7585.7% Food Preparation Workers 1,6347.6% Word Processors and Typists 1, %

This mis-alignment of college grads taking non-college jobs explains unemployment disparities As college grads exhaust college job options, they move down and displace lesser educated people from their jobs Employers find these educated candidates attractive, even if their education is not required for the job Lesser educated workforce are left with no available opportunities in face of competition from better educated, hence remain unemployed or leave the workforce altogether Proper alignment between college education and workforce needs is crucial to employment success of the lesser educated

Examples of fields of study (2-digit CIPs) with differing employment outcomes Instructional Program Bachelors Degree Award Number of Bachelor Degree Graduates Annual Median Earnings of All Employed Graduates in 2 nd year after graduation Percent working full-time and year- round in 2nd Year Median Earnings of Full-time Employed in 2nd Year Well Aligned Engineering1,217$55,48969%$59,124 Construction trades25$53,67576%$55,472 Computer and information science647$51,99068%$56,277 Health profession2,577$50,02140%$59,646 Engineering technologies165$47,68868%$51,960 Business, management, and marketing6,272$38,66764%$45,289 Poorly Aligned Visual and performing arts1,562$17,83329%$31,039 Transportation and materials moving51$17,73135%$26,447 Communications technologies/technician21$17,629N/A* Area, ethnic, cultural, gender, and group studies168$17,54028%$30,300 History443$16,51329%$34,154 Theology and religious vocations337$15,74130%$33,185 Compare median earnings and percent employed full-time year-round between these two sets

Further evidence/examples of differing employment outcomes across fields of study Top 5 industries of employment (%) and median wages paid in each $ $ $ $ $ $ $ $ $ $ Computer and information science Comparison of any other pair of majors from previous chart would reveal the same discrepancies in employment outcome

Academic attainment varies across racial/ethnic groups Share of 25+ population with no more than HS and at least an AA, 2013 ACS

What does this information tell us? If wage and employment rates are the outcome of interaction between supply and demand, they tells us a great deal about which fields of study are in demand and which are not Providing these data to young people selecting a major, and to incumbent workers looking to change careers, would allow them to better self- select into areas with better opportunities Data for all fields of study are on our website at employment-outcomes/ employment-outcomes/

What about the future ? Currently, college grads at all levels are struggling as they enter the workforce, but faster growth is predicted in areas requiring college education, especially at the AA and MA levels The challenges faced by college grads are more daunting in some fields of study than others, and future trends will increase this disparity, but information-based self-selection can help While growth in jobs will be greatest at certain levels of education and in specific fields, most jobs of the future will still not require post-secondary education Expanded access to necessary education & training and to suitable employment by our disadvantaged populations will be increasingly necessary to achieve continued growth and prosperity As job growth and labor force slowing continue, and as college- educated workers find suitable employment, workplace exposure/engagement for teens that may not enter post-secondary, but who can succeed in lesser skilled employment with some preparation, will become even more beneficial

N ORTH S TAR S UMMIT Mapping Economic Prosperity for Minnesota