Job v. Budget Crisis: Leaders Debate the Cause of High Unemployment for College Grads
Education leaders butted heads on Tuesday over which economic issues contributed most to the 4.2 percent unemployment rate for recent college graduates.
Some at the hearing hosted by the White House Education and the Workforce Committee attributed the unemployment rate to a higher-education funding deficit while others argued it was a result of a jobs deficit.
Laura Fornash, Virginia secretary of education, argued the need for increased federal funding to higher education.
“You (Congress) have made some reforms, but more must be done to maximize these federal dollars and ensure those who enter our higher education institutions exit with employable credentials,” she said at the hearing.
Increased federal aid, Fornash continued, would lower the costs of higher education, allowing more individuals to graduate with employable skills.
Like Fornash, President Obama has focused on making college more affordable. His administration recently raised the maximum Pell Grant award to $5,635 for the 2013-14 school year — a $905 increase since 2008. The Obama Administration also increased the number of Pell Grant recipients by 50 percent since 2008.
However, Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities, testified at the hearing that, "Especially at times like the present, it would be a mistake to think that higher educational attainment alone would help ameliorate the economic squeeze so many families face. The supply of labor, even of so-called “skilled” labor, is not what’s holding back job growth right now. Inadequate labor demand — not enough jobs to meet the supply of workers — has been by far the more pressing factor in recent years."
Bernstein continued, "Even wages of workers with a bachelor's degree have been losing ground in real terms, and just over the recession, but over the prior expansion as well."
Other economists have expressed a similar position to Bernstein’s. Recently the Center of College Affordability and Accessibility (CCAP) attributed the low rate of unemployment to a mismatch in supply and demand.
Many recent graduates are applying for positions they are overqualified for as a result of colleges producing more graduates than the amount of available jobs, economics professor and director of CCAP Richard Vedder told Campus Progress.
“It takes 16 years of school to get jobs that people formerly got with 12 or 14 years. That’s why we are seeing so many recent grads starting in jobs as janitors, taxi-drivers and bartenders,” Vedder said.
Although both a jobs deficit and a higher-education funding deficit have impacted economic growth, the national agenda continues to be centered on college accessibility in order to transition graduates into profitable workers.
"Clearly we have work to do here," Rep. John Kline (R-Minn.) said, concluding the hearing.
Cherise Lesesne is a reporter for Campus Progress.
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