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That Post-College Bartender Job Could Stunt Your Career for a Decade

Graduating during a recession has long-term effects on workers' wages

Seniors in college have been told they're entering the best job market in a decade. But these educated workers may have more to worry about than they thought, a new report suggests.

An analysis of College Board and government data published Wednesday by the Economic Policy Institute finds the Class of 2015 will likely see lower wages than cohorts who graduated into better job markets for as long as 15 years. Other research has found that a rising number of recent graduates take low-skill and service jobs that don't make use of their degrees. Since 2000, the share of recent college graduates taking such low-wage jobs as bartending, cashier work, and food service has steadily increased. Last year, 46 percent of young college graduates worked jobs that didn't require a bachelor's degree, up from 38 percent in 2007, according to the Federal Reserve Bank of New York. As the Atlantic's Derek Thompson recently wrote, "the era of the overeducated barista is here to stay." 

Those choices put them at a lower rung of the career ladder at a critical moment in their careers, said the EPI's Elise Gould, Alyssa Davis, and Will Kimball in the report. While young workers will likely move up the company hierarchy or move to more lucrative careers over time, erasing that initial wage disparity could take well more than a decade, they say.

"Young workers who have the bad luck to enter the labor market during a downturn not only have worse outcomes in the short run than if they had entered in a healthy labor market; these negative effects can last a very long time," said Gould, Davis, and Kimball. "Research shows that entering the labor market in a severe downturn can lead to reduced earnings, greater earnings instability, and more spells of unemployment over the ensuing 10 to 15 years."

The institute also pointed to a rise in what it calls "idling," or the share of young college graduates who are neither employed nor enrolled in school. Last year, 10.5 percent of recent college graduates were idled. While that's a slight decrease from the peak of the recession, when 11.9 percent were categorized as being in limbo, it's still historically high—and "represents an enormous loss of opportunities for this cohort, as the loss of work experience or further education will have a lasting negative impact on their lifetime earnings," the economists said.

While the Class of 2015 is entering a better job market than the previous six classes of college graduates, they're still worse off than most classes since the early 1990s. The new report predicts it may take another generation for them to catch up to their predecessors.  

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