Market Watch | August 22, 2012
By Quentin Fottrell

After four years of college, many graduates are ending up in jobs that only require the ability to operate a cash register with a smile.

After commencement, a growing number young people say they have no choice but to take low-skilled jobs, according to a survey released this week. And while 63% of “Generation Y” workers — those age 18 to 29 — have a bachelor’s degree, the majority of the jobs taken by graduates don’t require one, according to an online survey of 500,000 young workers carried out between July 2011 and July 2012 by PayScale.com, a company that collects data on salaries.

Another survey by Rutgers University came to the same conclusion: Half of graduates in the past five years say their jobs didn’t require a four-year degree and only 20% said their first job was on their career path. “Our society’s most talented people are unable to find a job that gives them a decent income,” says Cliff Zukin, a professor of political science and public policy at Rutgers.

The jobs that once went to recent college graduates are now more often going to older Americans. Over the past year, workers over 55 accounted for 58% of employment growth, says Dean Baker, a co-director of the Center for Economic and Policy Research, a nonprofit think tank in Washington, D.C. Why? Employers think older workers are a safer bet and more likely to stay, he says. Unemployment hovered at 6.2% in July for workers over 55, according to the Labor Department, but was more than double that rate — 12.7% — for those ages 18 to 29.

As a result, college graduates are finding themselves locked into lower-paid jobs. “The shaky economy has forced many of them into a world of underemployment,” says Katie Bardaro, lead economist for PayScale. The starting salary for a graduate is $27,000, 10% less than five years ago, the Rutger’s study found. “Unlike those who graduated five years ago,” Zukin says, “the long-term expectations of this generation are not being met.”

Graduates must either face years of underemployment or go back to graduate school, experts say.

“This generation of young Americans are trapped,” says Paul T. Conway, president of Generation Opportunity, a nonprofit think tank based in Arlington, Va.

Dave Marshall, 23, earned a bachelor’s degree in sociology from the University of Florida in Gainesville last year, works in private security and is a reservist in the U.S. Army’s National Guard. “My education is almost irrelevant in the private security field,” he says, “but it’s a job.”