In recognition of 2013 graduates, this week’s blog looks at the job market confronting this new cohort of young people receiving their diplomas.
The Class of 2013: Young graduates still face dim job prospects. The current crop of graduates has played by society’s rules. They have worked hard to attain that degree, but they find fewer opportunities to secure good jobs at good wages. Something seems to have changed profoundly. One major cause is the Great Recession of 2008 and its aftermath—a weak labor market that still has not recovered. Young graduates are disproportionately affected by a weak labor market. However, this time around, the causes may be a little more complicated, which are explained in some of the articles that follow this one: click here to read.
Young, gifted, and slack. “The skills gap must be bridged if the world is to avoid dire consequences,” argues Dominic Barton, managing director of McKinsey & Company, a global consulting firm. Put simply, “too many young people lack employable skills in a world that has too few skilled workers.” Supply and demand are mismatched. “40% of employers struggle to fill entry level jobs because the candidates have inadequate skills… 45% of young people say their current job is not related to their studies.” What accounts for the supply/demand imbalance? The survey identifies a powerful disconnect between perceptions of employers and educational institutions. “70% of employers blamed inadequate training for the shortfall in skilled workers, yet 70% of education providers believe they suitably prepare graduates for the job market.” Click here to read (registration may be required).
Race Against the Machine. This cohort of graduates is entering a world of rapid innovation yielding enormous benefits to society. At the same time, however, this innovation creates an element of instability in labor markets. Many companies are beginning to discover ways to exploit technology “ in ways that often lead to displacement of existing workers…what hasn’t happened swiftly enough, unfortunately, is the creation of new businesses, at a pace fast enough to employ the people displaced by new technology.” Lifelong learning will be a key to future success. Click here to read.
How did the world’s rich get that way? Never underestimate the importance of family and connections in life success and getting a job. Wealth and income of children are strongly correlated to the relative wealth and income of their parents. “One reason for this tight relationship is that parents who were educated are far more likely to educate their own kids.” Half of all jobs in the U.S. are found through family, friends, or acquaintances. The proportion rises to 70 percent among the top 1 percent in income distribution. “The choices people make are certainly important when it comes to how successful they are, compared to their school friends or colleagues. But luck—not hard work—is overwhelmingly why the rich are rich while the poor are poor.” Click here to read.
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Disclosure – The articles mentioned in This Week with J. Mark Nickell & Co. are for information and educational purposes only. They represent a sample of the numerous articles that the firm reads each week to stay current on financial and economic topics. The articles are linked to websites separate from the J. Mark Nickell & Co. website. The opinions expressed in these articles are the opinions of the author and not J. Mark Nickell & Co. This is not an offer to buy or sell any security. J. Mark Nickell & Co. is under no obligation to update any of the information in these articles. We cannot attest to the accuracy of the data in the articles.
