Is there saturation of university graduates in the labor market?

The world is in crisis . The coronavirus came to change many of the structures that we knew, but there are some trends that were taking place before this whole situation. For example, in Magnet Xataka they ask whether an "excess of graduates " is leading to a social crisis.

Unlike what happened in past decades, today it is very common to see that the students, after they finish their school, decide to pursue a Bacherlor or an undergraduate study. If we take into account that, in many countries, especially those in Latin America, it is possible to access a free and quality university education, it is clear that there will be more and more graduates.

This is because, over the years, studying after high school is no longer a privilege for a few and is now more common than it was before. However, it is worth asking whether this democratization of studies implies a saturation of graduates. In other words, highly qualified people who generate an excessive labor supply for positions in which there is no such demand.

The possible saturation of university graduates

In our region, we see that, in the last 15 years, the number of young people going to university has doubled. The World Bank highlights that it went from 21% of the young professional population in 2000 to 43% in 2013, a trend that continues to rise. Those are excellent news to promote the democratization of studies, but it brings unexpected adverse phenomena.

One of the negative consequences of this situation is that with a greater number of professionals willing to perform a qualified task, two problems can occur: firstly, a lower salary. In other words, we are talking about positions that are no longer "difficult to fill", so (through supply and demand) if many people are able to do it, it will no longer necessarily have to be highly paid.

The second of the drawbacks is that, since there is a greater supply (due to competition among the graduates themselves) there is a tendency to be unemployed university graduates. Precisely, university professionals are having a higher unemployment rate today as the years before. There is a trend of unemployment that grew by 60% during the last 4 years, according to a report by the National Institute of Statistics.

Also read: What is the revolutionary flipped classroom?

Another possibility is that young people are employed, although doing jobs for which they were not prepared in higher education institutions. More specifically, 4 out of 10 university professionals end up underemployed. Although they have long prepared for the job, the labor market seems unable to keep up with the demand for new professionals.

A big problem is that we may be living in a paradigm shift. For example, Tim Cook, CEO of Apple , says that having a college degree "does not guarantee success as a professional." This comes hand in hand with the new profiles that companies are looking for. In some of the new positions, such as those related to technology, the title seems to be a mere accessory: what matters is the knowledge that is put into practice on a day-to-day basis.

The academic record and even the title itself does not seem important if it is not related to practical ability. Precisely, the fact of finishing university studies does not mean that a job will automatically be obtained, but, on the contrary, it is necessary to continue improving and acquiring experience to demonstrate the aptitude for a job.

Having excellent grades in university does not necessarily imply an adaptation to what the market is looking for. Although university studies continue to be relevant in training to get jobs, today it seems not the only requirement. For this reason, in 20 Minutos they indicate that specialization is important, something that can be done through a master's degree and even specific courses for an academic training.

Also read: Why is an MBA so important in Latin America?

As previous generations had a more difficult time entering a college education, new young people grew up with the idea that a degree “guaranteed” a better life. However, as it is easier to graduate, there is also greater competition to obtain a job.

In other words, the market seems to need more and more specialized workers. In other words, those who have a university degree as a base, but who are perfected through complementary studies and work experience. If society does not prepare for this paradigm shift , the trend will likely remain the same: people who trained for years, but are unemployed or in under-skilled jobs.