Degree or No Degree, Not All Workers Benefit from Resilient Labor Market

Despite signs of softening, today’s jobs report shows that the labor market remains resilient. The Department of Labor reported a better than expected 275,000 new non-farm jobs, while revising January’s gain down to 229,000 from 353,000 and revising December’s gain down to 290,000 from 333,000. Wages rose just 0.1% for the month and are up 4.3% from a year ago. The unemployment rate rose from 3.7% to 3.9%.

At the same time, working Americans continue to feel insecure about the economy and are hesitant to leave their current jobs for new opportunities. Many employers now believe they are back in the driver’s seat and able to eliminate the higher salaries, flexible work arrangements, and other benefits that were necessary to attract and retain talent just last year.

When it comes to the labor market, numbers often don’t tell the full story. We have to be careful to draw conclusive takeaways from the Jobs Report, particularly when you consider the sizeable revisions to previous reports.

While there are pockets of strength and reasons for optimism, we are also seeing trends that are cause for concern. Here are three developments that caught my attention.

College grads are underemployed.

More and more college-educated workers are stuck in jobs that don’t require a degree. Four in 10 recent college graduates are “underemployed” or working in a role that doesn’t use their credentials or education, according to research by the Burning Glass Institute and the Strada Education Foundation.?

Often, when college graduates take non-degree jobs, moving up to a role that utilizes their education proves challenging. This can have a long-term impact on their earning potential. Those in their 20s with a bachelor’s degree typically earn 90% more than people with only a high school diploma, but underemployed college degree holders bring in just 25% more.

To add insult to injury, many underemployed degree holders are paying a significant portion of their income toward repaying loans on the degree that they were assured would land them a well-paying job in their respective field.

There’s no question that we must continue to make college education more accessible; it still is the best pathway to prosperity. But we must also ensure that college graduates can pursue the careers they invested in. As Burning Glass Institute President Matt Sigelman told The Wall Street Journal , “It’s not that a degree isn’t worth it. It’s worth it to too few people.”

Degree requirements are difficult to drop.

While many college graduates are facing underemployment challenges, efforts to provide greater access to work for those without 4-year degrees have stalled.

There has been a lot of talk about skills-based hiring and a shift toward eliminating college degree requirements for some white-collar jobs, but all the discussion hasn’t translated seamlessly into a shift in hiring practices – at least not yet.

Fewer than one in 700 workers were hired in 2023 due to the lifting of a degree requirement, according to analysis from Harvard Business School and the Burning Glass Institute . In fact, 45% of large U.S. employers declared they were doing away with degree requirements for some jobs, but never changed their hiring practices.??

We can do better! Lack of a 4-year degree shouldn’t keep an otherwise qualified candidate from finding meaningful, life-enriching work. At Kelly, our Equity@Work initiative is designed to break down barriers that keep people from accessing jobs, including unnecessary degree requirements. We found these efforts have broad public support. Eight in 10 Americans say that companies should do more to remove barriers that keep people from being hired or promoted, according to Kelly’s research.

Teachers are desperately needed.

All 50 states reported teacher shortages for the 2022–2023 school year, according to the U.S. Department of Education. The most significant shortages are occurring in special education, science, and math.

The reasons for the shortage are well documented: low teacher pay, inadequate resources, increasing challenges in the classroom, safety concerns, and the stress of teaching during the pandemic. Just 18% of Americans would encourage a young person to become a K-12 teacher, according to the 2022 University of Chicago NORC Spotlight on Education survey .

Although there’s been a slight uptick in American’s pursuing teaching careers in the past few years, it’s no surprise that the number of college students going into teaching has fallen by one third over the last decade, and the proportion of college graduates going into the profession is at a 50-year low.?

As a result, substitute teacher staffing services provided by Kelly Education and others have become a critical part of the U.S. education system. We are proud to be the nation’s largest provider of education talent and we are honored to play a pivotal role in helping more than 10,000 education partners fill their classrooms every day.?

These trending stories show that—despite a robust outlook overall—we face challenges that particularly impact young workers today and those who will enter the labor market in the future. We must make it a priority to adequately staff schools and ensure that high school and college graduates have access to the best jobs.