Most US graduates who start their first job underemployed can't find college-level jobs 10 years later: report

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Most US graduates who start their first job underemployed can't find college-level jobs 10 years later: report
A female office worker at her job.Thomas Barwick/Getty Images
  • US graduates who start their careers underemployed usually stay that way for years, per a new report.
  • About 73% of graduates who don't find college-level jobs in their first working year stay underemployed 10 years later.
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Your first job after college is crucial to the next 10 years of your career and salary, according to a new joint report by two research firms.

Bachelor's degree holders in the US who finish their first working year while underemployed — in a job that doesn't require their full skills, education, or availability — usually end up staying underemployed. This is according to a report published on Thursday by the Strada Education Foundation and employment data research firm Burning Glass Institute.

Around 73% of those who don't get college-level jobs in their first year after graduation end up stuck in underemployment 10 years later, the report said.

Meanwhile, 79% of those who clinch a college-level job in their first year of work continue to stay underemployed by the 10-year mark, it added.

"The first job in graduation is critical," the researchers wrote. "Graduates who start out in a college-level job rarely slide into underemployment."

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Those who find college-level jobs upon graduation and stay at that level for five years have an 86% chance of not falling into underemployment 10 years later, the report added.

Graduates who start their careers underemployed are about 3.5 times as likely to be underemployed a decade later, the researchers said.

Their findings were derived from a dataset of 60 million people's careers in the US, including those of 10.8 million people holding at least a bachelor's degree.

To reach their conclusions on recent graduates, researchers examined the careers of people who were employed in 2022 and graduated between 2012 and 2021.

Most American graduates start their careers underemployed

For every 100 graduates in the US, 52 are underemployed in their first year of work, the report said.

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For every 100 graduates in the US that have worked 10 years, the number of underemployed barely falls to 45, it added.

And underemployment carries heavy financial consequences, the researchers warned.

Graduates who work in college-level jobs typically earn 88% more than a high-school diploma holder, while graduates who work in jobs that don't require a degree only earn 25% more, it said.

That means graduates with college-level jobs earn 50% more than their underemployed counterparts, per the report.

The median annual salary for recent graduates with college-level jobs is $60,000, while those who are underemployed earn a median annual salary of $40,000, the researchers said.

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About 88% of underemployed graduates work in high school-level jobs — or occupations that are listed as requiring only a high school education or not requiring any education — after five years of finishing college, the report said.

Millions of these graduates are clerks, retail sales staff, sales representatives, and secretaries, while others work in food and beverage services and construction, it added.

How to avoid underemployment at your first job

The researchers attributed the risk of underemployment to a variety of factors, including gender, race, what type of institution you graduated from, and where you live.

But the most significant difference-maker is getting an internship before graduating, which can lower the risk of underemployment by nearly 49%, they said.

"Our analysis suggests that completing even a single internship during college substantially enhances a graduate's access to college-level jobs, reducing their likelihood of underemployment," the researchers said.

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Their report, titled "Talent Disrupted," builds on a similar 2018 analysis from the two firms titled "Permanent Detour," the researchers said.

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