Post-college Underemployment; Perspective on the Past and Future

Q4 | December 2018

stack of old newspapers, pile of old newspapers

Topic: Pearls of Wisdom

Devin Crago CFA

December 17, 2018

Image used with permission: iStock/hanohiki


Print & Share

Print

Post-college Underemployment; Perspective on the Past and Future

Q4 | December 2018

Reading is one of the principal occupations in our profession. As we digest a wide range of material, interesting ideas and surprising facts – some serious and some light-hearted – rise to the surface. We attempt to share a few of those with you in each of our issues of Nexus Notes.

Post-college underemployment

The facts are stark: 43% of U.S. college grads are “underemployed”, meaning that their job doesn’t require a college degree. Think of the unfortunate holder of a bachelor’s degree who winds up working at Starbucks for their first job. This can be hugely disappointing for those who put in the hard work to attain a degree, only to find that the time, toil and expense required go unrewarded in the job market. In financial terms, this matters because the average starting salary for a job that requires a degree is $46,000 versus only $36,000 earned by those in the underemployed category. To avoid disappointment, college applicants may want to avoid majors in Homeland Security and Law Enforcement, which had a 65% probability of underemployment. Conversely, and perhaps not surprisingly, Engineering majors fared best, with only a 29% chance of winding up underemployed. (Burning Glass Technologies, “Choosing the Right Major with the Underemployment Risk Indicator”, October 26, 2018)

Perspective on the past and future

You’ve often heard us discuss the importance of behavioral biases in determining investor success or failure. One common pitfall, known as the “recency bias”, is the tendency to recall and emphasize events that happened in the recent past over older information. This error is compounded when investors wrongly forecast that the future will closely resemble the recent past. In our reading, we came across an eloquent and insightful summary of the pitfalls of interpreting the past and predicting the future: “In reality, the future and the past are false constructs. The future is little more than our faulty guesses about one outcome out of many possibilities; the past is an error-riddled set of recollections, filled with selective retention and ego-driven biases.” (Bloomberg, “The Next Financial Crisis Is Staring Us In The Face”, October 8, 2018)

More Like This...

See another CRM2 blog post that may be of interest to you.

CRM2: The Nexus Approach to our CRM2 Reports

Topic:
CRM2
Excerpt:
With changing securities regulations coming into effect, investment firms are now required to provide individual investors with specific additional in

More Like This...

See another Foundations & Endowments blog post that may be of interest to you.

Increasing the Charitable Disbursement Quota – Well Meaning, but Wrong

Topic:
Foundations & Endowments
Excerpt:
Most Canadians have probably been focused on the recent Federal election. So, it wouldn’t be surprising if some missed an important consultation that

More Like This...

See another Human Interest blog post that may be of interest to you.

COVID: An Uneven – and Unequal – Recovery

Topic:
Human Interest
Excerpt:
Canadians have had enough of the lockdown. Here we are 18 months after you first heard of the then mysterious Wuhan flu. Today, but for any curve ball

More Like This...

See another Inside Nexus blog post that may be of interest to you.

The Nexus IT Crowd

Topic:
Inside Nexus
Excerpt:
We are happy to announce Ian Ligertwood as the newest member of our team. As Vice President, Operations & Technology, Ian will be responsible for

More Like This...

See another Investments blog post that may be of interest to you.

The Future of Money: a Digital Currency Primer

Topic:
Investments
Excerpt:
As a bottom-up investment management firm, we spend a lot of time looking at specific companies. But keeping an eye on evolving industry trends can be

More Like This...

See another Pearls of Wisdom blog post that may be of interest to you.

“Work, Work, Work, Work, Work, Work”

Topic:
Pearls of Wisdom
Excerpt:
This has been a busy year. I’ve had lots happening on the home front (a wedding!) and lots going on at the office (too long to list!) Managing work

More Like This...

See another Tax Planning blog post that may be of interest to you.

The Great Transition – A Tax Efficient Withdrawal Strategy

Topic:
Tax Planning
Excerpt:
The change from “saver” to “spender” is what I call the great retirement transition. Figuring out how to draw on your retirement savings to meet your

More Like This...

See another Wealth Planning blog post that may be of interest to you.

Living to 100… Is 100 the New 80?

Topic:
Wealth Planning
Excerpt:
It’s a common saying that there are two certainties in life, death and taxes. While we have a pretty good idea when we get taxed, which feels like all

On a Side Note…

See another CRM2 Nexus Notes Quarterly article that may be of interest to you.

No posts found.

On a Side Note…

See another Foundations & Endowments Nexus Notes Quarterly article that may be of interest to you.

No posts found.

On a Side Note…

See another Human Interest Nexus Notes Quarterly article that may be of interest to you.

COVID: An Uneven – and Unequal – Recovery

Topic:
Human Interest
Excerpt:
Canadians have had enough of the lockdown. Here we are 18 months after you first heard of the then mysterious Wuhan flu. Today, but for any curve ball

On a Side Note…

See another Inside Nexus Nexus Notes Quarterly article that may be of interest to you.

The Nexus IT Crowd

Topic:
Inside Nexus
Excerpt:
We are happy to announce Ian Ligertwood as the newest member of our team. As Vice President, Operations & Technology, Ian will be responsible for

On a Side Note…

See another Investments Nexus Notes Quarterly article that may be of interest to you.

The Future of Money: a Digital Currency Primer

Topic:
Investments
Excerpt:
As a bottom-up investment management firm, we spend a lot of time looking at specific companies. But keeping an eye on evolving industry trends can be

On a Side Note…

See another Pearls of Wisdom Nexus Notes Quarterly article that may be of interest to you.

A Table for None, Please; Working From Home on the Rise

Topic:
Pearls of Wisdom
Excerpt:
Reading is one of the principal occupations in our profession. As we digest a wide range of material, interesting ideas and surprising facts – some

On a Side Note…

See another Tax Planning Nexus Notes Quarterly article that may be of interest to you.

The Great Transition – A Tax Efficient Withdrawal Strategy

Topic:
Tax Planning
Excerpt:
The change from “saver” to “spender” is what I call the great retirement transition. Figuring out how to draw on your retirement savings to meet your

On a Side Note…

See another Wealth Planning Nexus Notes Quarterly article that may be of interest to you.

Living to 100… Is 100 the New 80?

Topic:
Wealth Planning
Excerpt:
It’s a common saying that there are two certainties in life, death and taxes. While we have a pretty good idea when we get taxed, which feels like all