Why You Should Join the #MillionStudentMarch: Career Choices
On November 12th, the Million Student March will be held on campuses across the nation. There are already 29 marches scheduled, with many more to come! To find your local event and sign-up, visit studentmarch.org.
We have three demands:
- Tuition-Free Public College
- Cancellation of All Student Debt
- A $15 Minimum Wage for All Campus Workers
Angry Millennials fully endorses these demands and each week, we will cover one major reason why every young person across the country should be in the streets on November 12th. This week, we focus on how student debt effects our career choices and ability to start a business.
As we mentioned a few weeks ago, while the cost of education continues to increase, over half of all recent graduates are underemployed in jobs which don’t require a bachelor’s degree. The below chart, from Pew Research, breaks this down even further.
Not only are many of us overqualified for our current position, but over the past twenty years, even the nature of the underemployment has deteriorated. In 1990, 50% of those underemployed were still working “good non-college jobs”, defined as average salaries over $45,000 per year. In 2012, under 40% are working these jobs, and the percentage of those working low-wage jobs has also increased.
This deterioration of the job market for graduates in many fields is causing students to choose lucrative career paths with a primary goal of earning more money, rather than positively changing the world or studying their passion. A 2011 study by Jesse Rothstein and Cecilia Elena Rouse, suggests that having student debt reduces the likelihood that graduates will choose a low-paying, public-interest job.
According to a recent survey conducted by American Student Assistance (ASA), more than one-third of respondents had their career choices impacted by their student debt:
Even worse, 52% of respondents feel that paying their student debt is negatively effecting their ability to further their career:
Another 2008 study contains statistics which corroborate these findings:
- 47% of recent grads say their career pursuits are influenced by loan payments.
- 40% of recent grads took a job that provided higher pay, but less satisfaction, in order to pay off their loans.
- Half of today’s college students say they are willing to sacrifice career satisfaction for a bigger paycheck.
- One-third of today’s college students say that student loans will influence their career choice
Historically, education is known as the “great equalizer”, as students who don’t have money for college can take out loans to attend schools which will increase their marketability in the job market and expand their career options. In an ironic twist of fate, these students are actually left with fewer options for post-graduate employment, as they frequently lack the flexibility necessary for unpaid internships or low-wage entry level work in their field of choice. It’s hard to really weigh your options when Sallie Mae or Great Lakes calls six months after graduation.
Starting a business has long been considered a sign of success in our American capitalist system, as successful start-ups can spark innovation and reap huge economic benefits for the entrepreneur, their employees, and the economy as a whole. As you can imagine, the massive student debt burdens, stagnant wages, and lack of job market opportunities which have contributed to many of the issues that we have covered recently, also hampers entrepreneurial activity among recent graduates.
Check out these graphs from a recent study about how student debt can hinder entrepreneurship:
These two graphs mirror each other almost exactly. Mean startup activity has fallen almost every year since 1992, as the median student loan amount has increased. The only period where startup activity increased was from 1998 to 2001, which is also when the median loan amount temporarily leveled off. Not only does this study find that increasing student debt decreases entrepreneurship, but also that the more student debt an individual has, the less profitable their firm will be.
Another study conducted by researchers from Penn State University and the Federal Reserve Bank of Philadelphia, also found a negative correlation between the increase in student loan burden and the formation of small businesses, which are most dependent on the personal debt of the entrepreneur. Between 2000 and 2010, one standard deviation increase in student debt reduced small business activity by an average of 14%, which can have a significant effect on our economy, not the mention the future of our generation. The New York Times cites these studies while reaching a similar conclusion:
“Given the importance of an entrepreneur’s personal debt capacity in financing a start-up business, student loan debt, which cannot be discharged via bankruptcy, can have lasting effects later in life and may impact the ability of future small-business owners to raise capital.”
The ASA survey we cited earlier found that almost half of all respondents indicated that student debt has a considerable impact on their ability to start a small business:
Starting a business is usually considered a high-risk activity, and despite the possible rewards, recent graduates are much less likely to take these risks as student loans balances increase. Thus, while many people likely attended college to gain the skills and connections to start a business in their desired field, by the time they graduate, they realize that it would be very hard to raise capital when they already start out with thousands of dollars in debt.
Our education system is broken, and we are paying higher tuition each year for an education which is increasingly not helping us in the job market. However, we can’t give up. Students across the country must fight for a $15/hour minimum wage to rise the income of all workers. We must eliminate the tuition of public universities to provide an opportunity for all members of our society to obtain a higher education regardless of income. Finally, we must abolish student debt, because a large percentage of our generation has been robbed of our economic futures.
This isn’t impossible. We start on November 12th at the Million Student March. Sign up and find your local event at StudentMarch.org.
We are more than our degrees and job titles. We are not a loan. The time has come for us to stand up and fight back!